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Risk returned to markets overnight with......>

DOLLAR: Risk returned to markets overnight with moderate gains for NOK, AUD &
CAD at the European crossover. Despite the PBoC setting the mid-rate for USDCNY
above 7 for the first time in 10 years, this was actually lower than
expectations of 7.02 and was seen to underpin risk. USDCNY dipped nearly 4 big
figures to Cny7.0633 on react, while Asian equites remained in the green.
- The DXY holds toward the base of its 97.51-62 range. Key support remains at
97.39/33 from the 61.8% retracement of the Jun-Aug rise & 100-dma.
- Gold remains choppy, holding above the key $1500 level at typing. Yesterday's
multi-year high provides the next area of resistance at $1510.46, ahead of the
December 2011 lows at $1522.8.
- WTI & Brent are $1.50 off yesterday's respective lows, but still remain
- UST yields staged a recovery with the 10y extending to 1.7481%, before fading.
- Jobless Claims & Wholesale Inventories the main data release today. The level
of initial jobless claims is expected to hold steady at 215,000 in the August 3
week after an 8,000 gain in the previous week.

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