• The head of the IMF Dominique Strauss-Kahn was arrested in NY and charged with sexual assault
  • This may interfere with EU-IMF meetings regarding bail-out funding for Greece and Portugal
  • Japan’s machinery orders +2.9% MoM, much better than the expected -9%
  • Japan’s CGPI +2.5% YoY, up from 2.1% last time
  • Moody’s: Asia-Pacific stable corporate ratings to continue, with exception of Japan
  • Obama and Geithner push hard for budget agreement
  • Australian owner-occupied housing finance -1.5% MoM, +2.4% expected
  • UK house asking prices rise to 3-year high: Rightmove
  • Regional stocks fall, led by HK and Sydney both down 1.3%
  • Gold steady at $1492/oz, oil -1% at $98.65/bbl

Overall it has again been a quiet session in Asia. There have been a few attempts to drive the EUR lower after the arrest of Strauss-Kahn brought IMF talks with the EU into question. EUR/USD closed in NY at 1.4105 and has spent almost the entire session below 1.4100. We fell as low as 1.4046 when EUR/JPY selling ramped up on the Tokyo open but talk of large bids just below that level dissuaded the bears. Ranges: EUR/USD 1.4046/1.4106, EUR/JPY 113.41/114.18

USD/JPY closed in NY at 80.85, fell initially as risk aversion encouraged selling in the JPY crosses but then rebounded as hedge funds sold Yen on the Moody’s comment. Ranges: USD/JPY 80.62/81.05,

AUD/USD fell on some at times heavy AUD/JPY selling but has again failed to break below technical support near 1.0520. There was some more disappointing finance figures from the housing industry but overall it’s been a relatively quiet day for the AUD. Ranges: 1.0520/71

Cable 1.6164/90, EUR/GBP .8686/.8714, USD/CF .8920/38, EUR/CHF 1.2553/83