Risk is brisk as China and Basel III sooth nerves

Strong Chinese data over the weekend and an agreement on Basel III capital requirements have been greeted warmly by the markets, overwhelming the news late Friday that Hypo Real Estate would need billions more in state loan guarantees from Germany.

What didn’t happen over the weekend is almost as interesting as whet did. China did not raise deposit rates despite rumors late last week that strong data would be the catalyst for such a hike. As well, Japan did not intervene ahead of the leadership vote tomorrow by the DPJ. Both those uncertainties will remain in the market in the days ahead.

Commodity plays are strongly supported this morning as AUD/USD consolidates gains around 0.9325 while USD/CAD holds below 1.0300.

Central bank offers above 1.2820 are rumored in EUR/USD.