Consolidation the theme with JPY higher,......>

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.