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Corrective Cycle


Trend Signals Still Point North


BLOCK, Red Pack

FOREX: Consolidation the theme with JPY higher, AUD, NZD pulling back
-The European session followed Asia in being relatively sanguine. Consolidation
has been top of mind with NZD and AUD lower after a strong three days, but JPY's
touched the strongest levels of the week on heavy Japanese supply in USD/JPY
after US equities slid yesterday. The pair briefly fell below Y106. 
-Implied vols are pretty mixed, but are rising for USDJPY, moving in tandem with
1m risk reversals which are down for the second consecutive day. 1 week implied
vols understandably higher across the board as they roll over to include next
week's FOMC decision. As a result, EURUSD 1w vols have risen from around 6% to
almost 7.5%.
-SEK is the best performer in European FX as the February unemployment rate fell
well below expectations, prompting markets to trim their bets of
easier-for-longer Riksbank policy.
-Focus turns to US weekly jobless numbers at 1230GMT and a speech from ECB's
Lautenschlaegar in Florence at 1545GMT. 
MNI London Bureau | +44 203-865-3809 |
MNI London Bureau | +44 203-865-3809 |