The new week in Asia started with an interesting series of events that pushed the dollar and yen higher in moves that were reminiscent of Friday. USD/JPY began the day at highs of 89.65 and began to slide as Asian stocks collapsed out of the gate, following the lead of Wall Street on Friday. As the Yen gained strength across the board with Japanese exporters repatriating funds for the fiscal year end, the new government in Japan upheld its mantra that they would not stop the rise in Yen unless the move was ''abnormal''. The cycle had begun, with the higher Yen pushing stocks lower and in turn pulling risk lower with it. With the Japanese Nikkei down almost 2.5%, the moves were quite dramatic.

USD/JPY eventually dropped to lows near 88.25, a little more than a big figure away from lows set in the Yen in February. The pair eventually crawled out of the hole and back near the 89.50 levels as cooler heads prevailed. The yen crosses as could be expected were decimated as well, with the GBP/JPY once again leading the charge lower. The pair came close to a 350 pip drop after falling off of its early 143.14 perch. After the quick spell sub-140.00, the GBP/JPY pair was able to get back to 141.50 levels by days culmination. EUR/JPY fell short of a 200 pip cave in as it hit 129.80 levels, but as well was able to bounce back to 130.50 levels.

With the above wheels in motion, risk was clobbered, EUR/USD dumped 150 or so pips from 1.4720 to 1.4565 levels, and GBP/USD was lighter by 200 pips as it touched bottom at the 1.5770 area. The AUD/USD wasn't banged up as bad as it dropped from near 0.8680 to 0.8580 levels. NZD/USD joined in the action and dropped a big figure as well. If this is any indication of the action we may have in store for the rest of the week, prepare for a wild ride.

Upcoming Economic Data Releases (London Session)                 prior      expected

9/28/2009

1230

US

Chicago Fed Nat Activity Index

AUG

-0.74

- -

9/28/2009

tba

GE

Consumer Price Index (MoM)

SEP P

0.20%

-0.20%

9/28/2009

tba

GE

Consumer Price Index (YoY)

SEP P

0.00%

-0.10%

9/28/2009

tba

GE

CPI - EU Harmonised (MoM)

SEP P

0.30%

-0.20%

9/28/2009

tba

GE

CPI - EU Harmonised (YoY)

SEP P

-0.10%

-0.20%