It is not at all far-fetched for markets to drag down the euro and Eurozone sovereign bonds due to non-EUR specific dynamics; such as prolonged tightening from China (tomorrows retail sales, CPI & loan figures), hawkish remarks from Chairman Bernanke on Wednesday and/or disappointing US retail sales (attributed to bad weather). Markets typically exacerbate the risk framework from dynamics that are unrelated to the target market. CADJPY consolidation remains in 83.00-83.90s, providing ample room for traders to play the range. Strong CAN jobs figures may not permit excessive CAD shorts below 83.70 unless significant event-risk emerges. GBPUSD attempts regaining yesterdays failed resistance of $1.5670 but fresh shorts seen at those levels ahead of Wednesdays BoE inflation report & King testimony.
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