Risk in retreat as market mulls the Fed -.....>

FOREX: Risk in retreat as market mulls the Fed

- Markets have put up a bit of a roadblock to the steady progress toward record

levels in global equities early Tuesday, with risk in reverse as traders ponder

these elevated prices in absence of macro cues or developments.

- The weeks-long impulsive rally in stocks resulted in the S&P 500 hitting a new

recovery high yesterday, bringing US markets within striking distance of the

all-time high printed earlier this year. The moves come just a day ahead of the

next FOMC rate decision, at which markets will be watching for any mention of

yield curve control and QE guidelines.

- This risk-off sentiment is well reflected in currencies also, which has

extended the JPY rally from Monday and helped prop up the greenback in recent

trade. The moves have been at the detriment of commodity-tied and growth-proxy

FX, pressuring NOK, AUD and NZD to the bottom of the pile ahead of the NY

crossover.

- US JOLTs job openings data and wholesale inventories/trade sales are the

calendar highlights Tuesday.