- Sterling was again the best performing currency during the Asian session after reports that the Kraft/Cadbury deal was nearing completion
- PBOC to keep monetary policy loose but is shifting focus to longer term tenors to fight inflation and excessive lending practices
- Japan Airlines set to file for bankruptcy
- Regional bourses lose 0.5% on JAL news
- UK CPI, ZEW data due for release in early European trade, BoC later
- Gold rises $4 to $1137.50
Another fairly insipid trading session was enlivened again by the resurgent GBP, suddenly every trader’s favourite. Reports of an agreed sale by Cadbury’s to Kraft was the instigator today. Cable ran from 1.6350 to 1.6410 on the news and has managed to stay above 1.6400 since. EUR/GBP fell heavily as stops below .8780 were triggered. There is talk of good sized bids in the cross around .8720. Ranges: cable 1.6330/1.6421; EUR/GBP .8764/.8810.
USD/JPY has traded heavily for the entire session. The main reason here has been talk of heavy stops below 90.30 but the market has lacked the momentum to trigger them in Asia. Range: 90.39/78
The EUR/USD market had anticipated stops above 1.4410 but it found good sized offers instead. Further offers are seen towards 1.4420 with stops tight above this level. Range: 1.4382/1.4413.
The AUD had moved almost 1 cent higher overnight and momentum was lacking today for any extra moves. The strong commodity story continues to underpin. Range: .9230/81.
Markets: Nikkei -0.5%, HK -0.3%. Gold +$4 at $1137.5, oil +0.5% at $78.40/bbl.
