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ECB to discuss collateral rules - AUD had a...>

FOREX
FOREX: ECB to discuss collateral rules
- AUD had a lively Asia-Pac session, jerking higher on no news to hit $0.6351,
with a short squeeze amid thin markets the suspect. AUD still holds much of
these gains at the NY crossover, dragging the NZD with it.
- Havens are on the backfoot after a strong Monday/Tuesday, leading the
greenback to fall against most others in G10. The USD index is pulling away from
yesterday's three week high, with a modest recovery in European equities also
helping. Elsewhere, the single currency trades weaker, with widening peripheral
EZ spreads adding weight to the EUR. Bumper debt sales in both Italy and Spain
this week have prompted their bonds to underperform vs. Germany.
- The ECB are due to be holding a conference call today to discuss debt
collateral rules. Expectations are rising that the ECB could loosen these
restrictions ahead of reviews on Italian sovereign ratings this week from S&P.
An adjustment from the ECB would allow the central bank to continue accepting
lower-rated and junk bonds as collateral.
- Canadian inflation data is the sole tier 1 release today.

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