[Calxy]

* The RBA was the first central bank to raise rates overnight (+25 basis points to 3.25%), and many market pundits are calling for another move higher in November followed by a pause. This is not unusual for the RBA as they have done the double move in the past, but some of the commentators are suggesting they may see how the market and consumers handle this move. It is not a surprise that the RBA have raised rates, the timing however is one month earlier than market forecast.

* Risk on sentiment is definitely prevailing, EURGBP has seen some strong selling interest first up in London, but reversed and the GBP was sold following data. GBP will continue lower despite the risk on sentiment. there is a feeling that the Real Money community has been reversing their short positions from last week in riskier currencies. NZD has been thin the past few days, and given the demand for the Real Money community selling dollars, this has helped Kiwi outperform.

* Treasury auction today - chat was that with China out on holidays the auctions will be poorly supported.

* Earning season starting tomorrow. Alcoa - Market will need a reporting season that shows revenue growth? The risk will be that the earnings are below expectations and this could threaten the risk friendly sentiment.

* NZ business survey was very strong, when added to a thin market this helped Kiwi become a strong leader overnight versus the US dollar. For NZD now could see further strength as the RBA is fully priced, and the RBNZ is left with catch up to play on the yield front. They have however been at pains to suggest that they need rates lower for some time yet though.

* Fed speak - Kohn and Dudley were dovish, cancelling Warsh and lockhart last week, Overall the Fed continues the "lower for longer" mantra.

* U.S. calendar quiet Tue, includes weekly store sales and $39 bln 3-yr note auction

* Canadian calendar has Sep Ivey PMI and Aug building permits data

* USD to be replaced in oil trade; USD pared losses after Saudi denied reports

* Fed's Dudley said dovishly rates would remain low for an extended period

* Fed must implement an exit stategy according to WSJ opinion column

* JPY eased amid improved global risk appetite; USD-JPY remained heavy

* AUD surged after RBA rate hiked rates; market eyes option triggers

* U.S. 2-yr Treasury yield has advanced ahead of $39 bln auction and with stock gains

* European debt futures lower as stock markets advance, Gilts outperform on IP data

* U.K. Aug manufacturing unexpectedly slumped 1.9% m/m (median +0.5%)

* Oil prices rise for second day on weaker USD and as growth optimism returns

* Australia trade deficit -A$1,524; vehicle sales rose; Q3 NZ business confidence up

* Asian stock indexes moderately higher; Japan hampered by yen concerns