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JPY the overall winner as risk recovery in....>

FOREX
FOREX: JPY the overall winner as risk recovery in equities fails to filter
through to currency markets.
-JPY and USD the main winners this morning as markets underwent a recovery in
equity risk appetite (S&P +1.75%, Eurostoxx +0.8%). Volatility measures have
subsided slightly, with spot markets finally seemingly to react to the gyrations
in equities and bonds earlier in the week.
-AUD and NZD are the laggards today, with AUD/USD now just circa 70 pips from
turning flat on the year after a >4% rally.
-EUR/USD and GBP/USD sold off alongside the European equity open and have not
recovered since, despite newswires widely reporting the agreement between
Merkel's conservatives and the SPD in a new coalition deal.
-USD/JPY briefly took out Y109 on the way lower to touch Y108.92, but the
dip-buying saw the rate recover back above the handle ahead of the NY crossover.
-Data is thin on the ground today ahead of key risk events tomorrow, primarily
the BoE's super Thursday. As such, today's session will likely be defined by
position-squaring and further contemplation of the equity market rout on Monday.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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