Markets stabilise as focus turns to who.......>

FOREX: Markets stabilise as focus turns to who follows the Fed

- Following the Fed's shock and awe rate cut strategy, focus is now on what

central banks will follow their lead. The Bank of Canada are now seen as more

than likely to ease in some shape or form later today, but suspicions continue

to mount that the BoE and ECB could also act. Implied vols are suitably elevated

but have eased a touch off yesterday's highs as realised may be dragged off 12m

highs in coming sessions.

- JPY is just about the weakest currency in G10 so far Wednesday, with equities

bouncing slightly after the drubbing received after the Fed action. US futures

are bouncing similarly, indicating a slightly higher open on Wall Street. With

other central banks looking at sizeable cuts of as much as 50bps, this has made

yesterday's RBA 25bps trim look relatively minor and has assisted another AUD

rally. Tuesday's highs at 0.6645 remain the near-term target. 

- US ADP Employment Change and ISM non-manufacturing PMI are the data

highlights. The Bank of Canada rate decision is also on the docket, with markets

now looking pretty evenly split over whether the Bank cut by 25 or even 50bps.