20130910

Good morning,

Yesterday, despite the lack of news to the market, there was a decent follow-through in FX markets from the US August Job Report and the NFP, which took the US Dollar lower more or less across the board. The soft report has led markets to be more in doubt on the effect of the tapering, which is expected to be announced on the September 18th meeting. EUR/USD enjoyed it's second positive day and Cable flirting with June highs and key 50% Fibo retracement level in the 2013 wave at 1.5750-area. Syria was also given some of the blame to the lower US Dollar, but that should in our opinion also have had a negative on US equities from a risk aversion perspective, which closed up around 1% on average.   European equities corrected a tad, ending in small minuses, despite the September Sentix Investor Confidence coming out at 6.5 vs. -3.5 expected.

From Canada, the Building Permits rose to a record in July, which sent the CAD on the bid. USD/CAD is flirting with the 50-week SMA, where a close below will open up for a test of 1.0310.

Overnight, the risk taking in Asia was well supported as the Chinese Industrial Production came out higher than expected at 10.4% vs. 9.9% expected, showing that Asia's biggest economy still is performing well. This triggered positive mood in the rest of the region, which led to an increase of the AUD and weakening of the JPY.

On back of the positive mood in Asia, we expected Europe to kick off quite well. It will be another day with little news on the macro front. Italian GDP (at 8:00GMT)  for Q2 should attract some attention as well as Housing Starts from Canada (12:15GMT). In addition, Scandinavian data in the morning will be interesting for market players with positions in NOK or SEK.

Have a nice day.