[Dan]

1) Fujii comments that recent currency moves reflect “the weakening of the dollar rather than strengthening of the yen or euro,” followed by price action on USD/JPY that suggests some market concern that the MoF threshold for JPY gain may be limited

2) Downbeat WSJ article on commercial real estate pointing to limited loss reserves and a Fed comment that "Banks will be slow to recognize the severity of the loss – just as they were in residential."

3) Mixed views on whether the MPC will announce tomorrow some further QE measures.

4) Mixed to generally upward moves on credit spreads, suggesting that risk buying is pausing.

5) Mounting concern on Latvia: it is still too earlier to expect a shift in the FX regime or, for that matter, a more radical set of economic policies. However, the Latvian government is testing the limits of what it can do. Analysts remain cautious for contagion risks from Latvia, but this is not yet in a situation of high alert.

To this there would be added risk that ECB President Trichet tomorrow extends the recent frontiers of what has been said on the EUR. They are looking squarely at EM central banks as partially responsible for EUR strength, but there is also a limit to the action they might take. However, investors may approach the meeting with a degree of caution. The fact that recent ECB speakers have downplayed the importance of EUR gains does not mean that there is no concern. However, if all that emerges is an appeal to the US desire for a strong USD and a reference to the G20 statement, EUR buying would likely resume.

All of this appears pretty low grade, and we would characterise the market as still searching for today's theme, rather than commited to either risk buying or risk selling.