Risk appetite takes a knock as Italian........>

FOREX: Risk appetite takes a knock as Italian bonds dislike Senate appointment

-After a somewhat quieter Asia session and European morning, risk appetite took

a turn for the worse on the appointment of Euroskeptic League party members

Bagnai as the head of the Senate's finance committee. This prompted Italy's 10yr

yields to rise close to 15bps and drag the EUR within touching distance of the

YTD low of $1.1510. This triggered a wider bout of risk negative price action,

favouring the JPY and USD, which pushed GBP/USD back toward the $1.31

psychological support.

-While the SNB decision was a non-event, the Norges Bank made a firmer

commitment on a September rate hike (which, ironically, pushed their Q3 rate

forecast lower as July and August hike probabilities plummeted). As a result,

the NOK ranks alongside the USD as the strongest currency of the day so far.

-NZD is the poorest performer as household consumption numbers sent the currency

within range of the multi-year $0.6781 low. 

-Near-term attention turns to the Bank of England rate decision which, again, is

expected to deliver no policy change.