Key
Items: GB- Trade US (+CA)- Trade. 3yr Auction (US).
The
first major political events this week are due on Wednesday, as the German Constitutional Court will rule on whether its Constitution would have to be be changed to allow Germany to participate in a European fiscal union.
A slew of other meetings are expected as well.
National elections are also slated for Wednesday in Holland. A Socialist pro-bailout government is expected to win that election and provide additional political support for EZ bail-outs.
The Swiss National Bank quarterly meeting
is set for Thursday. No rate changes are anticipated, but something could be heard on whether the SNB plans to raise the peg on the EURCHF cross to
1.2200.
Thursday also sees a
key Fed meeting. No rate changes are expected. This meeting will see the release of the latest Fed economic forecasts and
a Bernanke press conference. Following the weaker than expected August U.S. employment report,
support for QE3 is priced in.
The key EURUSD 20-day average
is 1.2501. The 10-yr bund is 1.55%, +3bp Key European bourses are down. The
U.S.10-yr is 1.68%, +2 bp. U.S. shares are down.
Key Asian bourses
ended mostly up. The 10-yr JGB was 0.80%, -2 bp. The key
USDJPY 20-day average is 78.67. EURJPY 20-day average is 98.34. Japan should will see a leadership change soon.
The BOJ continues to warn about JPY intervention.
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