It has been a very quiet trading session in Asia with conflicting forces at work. Higher stockmarkets would normally encourage some risk-on trading but this has been offset by the Goldman Sachs news and nervousness about some imminent reval moves by China. There was no new Toshin demand and the Tokyo market was very quiet as they are in the middle of holiday mode.

EUR/USD moved higher in early trade on the back of the Greek acceptance of their austerity plan. Dealers eyed stops above 1.3280 but the announcement of the criminal investigation into Goldman Sachs took the wind out of the bull’s sails and some risk aversion returned. All up a very quiet session with EUR/USD trading in a 1.3226/65 range after closing in NY at 1.3240.

Economic data shows the Japanese economy still struggling to get out of it’s deflationary state and despite slightly higher unemployment, the manufacturing sector is recovering well on the back of solid export performance. USD/JPY has moved around according to the sentiment and flows of the crosses. Exporters are seen above 94.50 but there are also stops at the same level and large stops above 94.85. Ranges: USD/JPY 93.90/94.18; EUR/JPY 124.39/73.

The pound also experienced conflicting forces. The good performance by the Tories in the last election debate is seen to be increasing their chances of an outright win. The slightly disappointing consumer confidence data weighed slightly. EUR/GBP is now the pair to watch with big stops building below the .8590/.8600 level where the heavy buyers were previously situated.

The AUD/USD again opened close to its standard .9260 level but jumped up on the Greek austerity agreement. The only reason that the RBA might decide not to hike would be if the international situation were overly volatile so any progress in Greece is seen as increasing the liklihood of a 25bps rise. Range: .9271/.9314.

Markets: Nikkei +1.4%, HK +1.3%, Kospi +0.9%. Gold $1174/oz.