• Australian TD-MI measure of Australian inflation +2.6% YoY
  • Noted RBA watcher thinks rate hike not a certainty
  • Australian job ads -8% MoM, house price index +13.6% YoY
  • Hometrack survey of UK house prices -0.8% YoY
  • China manufacturing PMI in January down 0.8 to 55.6
  • Latest market positioning research suggests that EUR shorts at 16 month highs
  • South Korean CPI +3.1% YoY and manufacturing PMI 55
  • Regional sharemarkets down 1% on average
  • Gold and oil fall by 0.5%

Some usual Monday morning stop-loss hunts took the JPY crosses lower with EUR/JPY getting to 124.50 and AUD/JPY touching it’s 200-day MA at 79.15 but these losses were reversed once the retail market and Tokyo joined in.

EUR/USD has traded in a very quiet 1.3854/87 range although there has been a bit more volatility in the crosses with EUR/JPY trading 124.50/125.43 and EUR/GBP also finding support as the GBP falls out of favour again.

Cable has slipped lower throughout the session with many technical traders noting a bearish weekly close and instigating fresh shorts. Range: 1.5938/75.

AUD/USD slipped early on the AUD/JPY selling but recovered just as quickly once the big technical support in the cross held. Most traders are now waiting for the rate decisin tomorrow with 70% of the market expecting a 25 bps rate rise. Range: .8800/72.

USD/JPY has moved around in line with movement in the crosses. Range: 89.81/90.40.

Markets: Nikkei -0.4%, Kospi -0.4%, All Ords -0.8%, HK -1.3%, China -1.9%. Gold -0.5% to$1078/oz, Oil -0.5% to 72.50/bbl.