Risk aversion faded to a degree, as US Tsy....>

FOREX: Risk aversion faded to a degree, as US Tsy yields ticked higher, although

they still remain well shy of Friday's closing levels. USD trades mixed against

the majors, while JPY has unwound the bulk of its early gains. Worries over

Italy continue to circle, with little in the way of fresh fundamental catalysts

apparent in the Asia-Pacific session. USDJPY printed a low of 108.35, failing to

threaten Tuesday's low, with the cross last dealing at 108.70, virtually

unchanged on the day, while EURJPY bottomed at 125.00, once again well above

Tuesday's low, last 125.30.

- EURUSD has stuck to a tight range, capped by 1.1550, dealing at 1.1535 last.

GBPUSD has operated in a narrow window, last 1.3250. The Antipodeans have shaken

off most of their early weakness, aided by the uptick in US Tsy yields. AUDUSD

last at 0.7495, NZDUSD last ~0.6910. This comes after the RBNZ noted that MonPol

is not expected to tighten for some time & that further LVR easing is unlikely

until next FSR at the earliest. German state & national CPI, US GDP 2nd

estimate, ADP employment data & BoC MonPol decision provide the main highlights

today, with eyes still focused on Italy.