G10 FX somewhat directionless, but USD........>

FOREX: G10 FX somewhat directionless, but USD selling remains the theme

-The USD trades either lower or flat against all other G10 FX, with the NZD and

JPY outperforming. Friday`s equity sell-off (DJIA -2.5%) bled through to Asia

(NKY -2.5%) and, in turn, Europe (SX5E -0.5%). Early Asia saw the USD hold

ground, particularly against the EUR and GBP, but much of this was erased ahead

of the EUREX open, which saw EUR/USD touch $1.2475 (helped by strong PMIs from

Italy and Germany) before moving back to flat ahead of NY.

-GBP/USD gained in sympathy before shedding 30 pips on a disappointing Services

PMI release. Markit now see the UK suffering a sharp slowdown in economic growth

at the beginning of the year. EUR/GBP printed up at Gbp0.8837 briefly before

fading.

-The bulk of the day`s risk events have now passed, with ISM non-manufacturing

at 1500GMT the sole interesting figure on the docket and markets will likely

take the opportunity to consolidate ahead of the major releases of the week from

the BoE, Canadian jobs data and speeches from ECB`s Draghi, Weidmann, Praet,

among others.