Good morning,

Equity markets were generally on the bid yesterday on back of somewhat positive news from peripheral Europe as well as market players entering additional longs on back of the lower rates in the Euro zone. Portugal was taken off Negative Outlook, Ireland has had the twelfth and final review of the economic adjustment programme completed and the recovery in Italy is picking up slowly. DAX and FTSE took home 0.3% while the CAC40 staged a 0.7% increase. Italy's FTSE MIB took home 0.8%. In currency markets, despite the good news in Europe, it was the US Dollar, which were the leading currency in yesterday's trading session, taking home gains more or less across the board. EUR/USD came back above the 100-day SMA, but momentum has faded overnight.

In the US and also overnight in Asia, the positive mood continued with stocks well bid, which has supported a lower JPY. USD/JPY is enroute for a re-test of the 100-level and has broken well free of the Ichimoku Cloud, with all indicators signaling further upside.

This morning, we saw German October inflation data coming out a tad lower than expected, which justifies the cut in interest rates from the ECB. Later today, Italian and Portuguese October inflation data will also be released.

From the UK, inflation data will also be the key event in the CPI and RPI data, released at 09:30GMT.  Also the DCLG House prices should be noted. From the US, we have no interesting data today. With these events, we should see some action in EUR/GBP, which was rejected last week at the 100-week SMA, currently trading around 0.8390-area with resistance at the 0.84-figure before 0.8440.

Have a nice day.