[DanRath]

BoE keeps reserve remuneration issue live; MPC less downbeat on economy

UK inflation surprises on the upside in August

French HICP inflation increased in line with our above consensus forecast in August

German ZEW expectations increases in September to the highest level since April 2006

Fed's Yellen expects a tepid recovery; concerned about the vulnerability of the economy

BoJ monetary policy meeting preview: we expect policy rates and the economic assessment to be unchanged

China: Growth recovery on track; policy to remain supportive

Swiss IP rose 2.7% q/q in Q2 09, weaker than was widely expected

Singapore: Discretionary spending improves, even as car sales weaken

AUD: Minutes confirm RBA not in a hurry; Summers comments weigh

[DanRath]

Ahead of the SNB on Thursday and with the CHF trading close to recent highs on a trade-weighted basis, it is worth noting that for investors expecting the SNB to continue to deliver on its commitment to prevent the Swiss franc from appreciation, the CHF is an attractive funding currency for risky investments. A new table shows the most attractive carry trades within EM and G10, based on vol-adjusted carry, against the three main funding currencies - USD, JPY and CHF. An interesting observation based on this chart is the CHF offers the best ex-ante Sharpe ratio against almost all the high-yielders, largely a consequence of the lower implied volatility for CHF-crosses.

[DanRath]

The AUD underpeformed other risky currencies overnight, partly related to the minutes of the RBA's September Board meeting. These were consistent with it maintaining a "wait and see" approach to policy and not being in a hurry to hike rates. "The [Board] meeting concluded that the balance was best struck by leaving the cash rate unchanged for the time being, pending further evaluation of incoming information at future meetings... ", according to the minutes. The minutes note that economic conditions continued to improve locally and globally, but that in both cases, large amounts of temporary fiscal stimulus had been introduced. The RBA's largest concern remains whether these improvements in growth can be sustained as the effects of the fiscal stimulus decline - market expects some of the post-stimulus data to weaken over the next few months, which could weigh on the AUD, at least against other commodity currencies.