Trade The News | Sep 25, 2012 07:22AM ET
Economic Data
Asian equity markets opened slightly weaker, taking cue from US indices, before paring their losses later in the day. Geopolitical tensions pertaining to disputed Senkaku islands is still weighing on sentiment, as Taiwan entered the fray with nearly 50 fishing vessels entering disputed waters only to be hosed by the Japan Coast Guard. Regional leaders will attempt to rebuild diplomatic relations as govt officials from Japan and China are set to meet later today to discuss the dispute, while PM Noda travels to New York for a summit at the UN and is also expected to address border tensions.
Currency markets saw some brief USD weakness, with EUR/USD retracing the post-IFO decline above $1.2950 and AUD/USD rising above 25pips from the lows to $1.0440. The analyst community is increasingly skeptical of greenback weakness persisting however, particularly focusing on the overvalued AUD and expectations of renewed easing by the RBA at its upcoming meetings. USD/JPY continued to pare post BOJ-gains, extending decline below the ¥78 handle.
Fixed Income/Commodities
(AU) Reserve Bank of Australia semi-annual Financial Stability Review: Australia's banks able cope with any shocks from abroad; cautioned them against taking inappropriate risks in order to achieve unrealistic profit goals; Warned that the Europe's debt crisis remained a threat to the stability of the global financial system.
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