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FX Briefing Highlights Equity markets hope for additional support from the Fed "Hard" US economic indicators show little recession risk In Japan resistance is growing against the strength of the yen Ruling party DPJ to elect new Japanese prime minister EUR-USD: Risk on or off? Recession fears and the debt crisis are continuing to dominate market action. The mood alternates between flashes of optimism on equity markets and panic attacks as last seen on Thursday afternoon. On bond markets, the picture is mixed: whereas spreads for Italian and Spanish government bonds have stabilised thanks to the ECB's purchases, yield spreads between Greek government bonds and comparable German Bunds have hit new record highs. Given the dispute about collateralisation of loans from the ...

The Weekly Bottom Line HIGHLIGHTS OF THE WEEK United States * The debate around currency valuations has heated up recently, especially since the Bank of Japan announced in mid-September it would intervene in the foreign exchange market to fend-off the yen from an ongoing appreciation vis-à-vis the U.S. dollar. * This week the U.S. House of Representatives passed a bill that would facilitate trade sanctions on China for its alleged currency manipulation. * Beyond the political motivation, from an economic standpoint it is very difficult to assess the relative valuation of a currency, and therefore any policy actions designed to correct mispricing are bound to generate distortions with higher economic costs than the benefits they pursue. Canada * In Canada, recent ...