Month-end mayhem continued to dominate the NY trading price action in a session where inter-market correlations broke down. US equities dropped nearly -1% on the heels of the slip in global stock marts. Not even better than expected Chicago PMI data could bolster the market today. The report printed an above consensus 50 read for August, putting it right on the midpoint between growth and contraction. The details suggest the results were largely influenced by the government's ''Cash for Clunkers'' bailout and we would take the improvement with a grain of salt as it could prove short-lived. The employment component improved but is still a dismal 38. In an environment where jobs hold the key to recovery, this continues to be an ominous indicator.

EUR/USD managed to squeeze higher despite the selloff in risk. Talk was that month-end fixing was still in play and ostensibly portfolio managers needed to buy a decent amount of EUR to hedge their portfolios for the new month ahead. The pair rocketed to a session high (and double top) by 1.4365/70 before coming off 30 pips or so ahead of the close. Cable rode on the EUR coattails and screamed to a 1.6330 high before settling near the 1.6300 area.

The commodity complex was in meltdown mode with oil settling below the $70 mark for the first time in two weeks. This was not enough to see USD/CAD hold on to early gains, however, as US dollar selling dominated. What has been a -92% correlation between USD/CAD and oil broke down today and the pair fell hard from a 1.1092 session high to settle by 1.0940/50. Speaking of commodity currencies, the RBA rate decision coming up overnight should elicit some good price action in AUD/USD. Watch the hourly trendline by 0.8470 for a potential trigger higher here.

Upcoming Economic Data Releases (Asia Session) prior expected

8/31 23:30 GMT AU  AiG Performance of Mfg Index  AUG  44.5  - - 

9/1   21:30 GMT AU  Current Account Balance  2Q  -4614M  -10700M 

9/1     1:30 GMT AU  Building Approvals (MoM)  JUL  9.30%  3.30% 

9/1     4:30 GMT AU  RBA CASH TARGET  1-Sep  3.00%  3.00% 

9/1     5:30 GMT AU  RBA Commodity Index SDR YoY%  AUG  -31.80%  - - 

9/1     5:45 GMT SZ  GDP (QoQ)  2Q  -0.80%  -1.00% 

9/1     5:45 GMT SZ  GDP (YoY)  2Q  -2.40%  -3.00%