Tuesday 8th April 2008

FX markets having a steady start to the week with the Euro/Usd once again reversing away from its T/R early yesterday and also rising to a 3 month high against the Yen overnight as Japanese investors buy higher yielding foreign assets at the start of the new financial year. The B of J starts a 2 day policy meeting today with the majority of the market expecting it to keep interest rates at the current 0.5 per cent this year.

The Aussie dollar has moved well for us over the last 24 hours but we are wary of a report out of Sydney last night which shows March business conditions slumping to their worst level in 5 years.

Focus this week will be on Thursday's ECB and B of E meets with the former expected to hold rates whilst the B of E will cut rates by 25bp. Later today the Fed's 18th March minutes will give us an idea on how far policy makers are prepared to cut interest rates in the future.