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(U2) Back Above Bear Trigger

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Trend Outlook Is Bullish

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FOREX
FOREX: No let up
- While equities remain red, currency markets continue to pursue their risk-off
path, resulting in further strength for haven FX and further weakness for high
beta currencies. The was most evident, once again, in AUD, which struck new
cycle and multi-year lows. The moves in spot has kept AUD vols elevated, helping
to pressure front-end risk reversals to the lowest level since May last year.
Equity markets are failing to lend a hand, with a number of European indices
today entering correction territory (albeit briefly).
- GBP was an outlier, retreating sharply after Tuesday's outperformance as
reports dampened expectations of imminent fiscal stimulus from the government.
Instead, it's expected the new Chancellor will stagger spending plans across
three years, rather than front-loading a package this March. The week's lows
remain first support at $1.2887.
- The US data drought ends Thursday, with Q4S GDP, weekly jobless claims and
pending home sales. The speakers slate is particularly busy, with ECB's Lagarde,
Schnabel, Lane, BoE's Cunliffe and Fed's Evans and Mester among those due.
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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