Markets largely tread water after Friday......>

FOREX: Markets largely tread water after Friday tumult

-After a particularly volatile Friday trading session, currency markets trade

well within recent ranges Monday, with most pairs looking to pull back some of

the risk aversion-inspired moves. EUR/USD edged higher throughout the European

morning, with USD/JPY following suit, but the Friday highs in both pairs remain

well out of reach for now. EUR shrugged off an MNI interview with ECB's Hansson,

who stated that QE could return and the recent economic slowdown could persist.

-The JPY is the weakest in G10 although is receiving little support from equity

markets which fell sharply across Asia: the Nikkei 225 closed lower by over 3%,

with Chinese markets down by a similar margin. US equity futures also indicate a

lower open on Wall Street Monday.

-Emerging markets are faring slightly more favourably, with TRY and ZAR both

firmly in the green and staging a minor recovery from Friday's lows.

-Focus turns to Chicago Fed national activity index and a speech from Fed's

Harker due at 1000GMT.