FX a relative dearth of price action..........>

FOREX: FX a relative dearth of price action compared to bond and equity markets

-Spot markets remain pretty quiet compared to their equivalents in fixed income

and equities, as German 10y yields dropped to one week lows and European stock

markets followed the global rout (DAX -2% at the time of writing).

-USD trades relatively mixed with NZD the outperformer after AUD/NZD dropped to

six-month lows on the somewhat dovish unchanged rate decision from the RBA.

-There have been no outsized moves in the JPY or CHF that you'd normally

associate with a downtick in equities and an uptick in bond prices. That may not

remain the case for long: implied volatility in EUR/USD, GBP/USD, USD/JPY, among

others is rising rapidly. 3m implied volatility in USD/JPY is reaching levels

not seen since September last year - and that pattern's repeated across a number

of currencies.

-EUR/USD 1m risk reversals continue to drop and have touched the lowest level

since late May. Yesterday's fall was the biggest one-day decline since April and

the same pattern is seen in GBP/USD.

-Data calendar is light today, focus turns to US trade balance and 3yr auction.