NY trading started with an optimistic tone out of the gates but retreated back to a flattish session as the close approached. US equities rose a modest 0.2% on the day after being up as much as 1.2% early on. The strong showing in the NY morning was on the back of better than expected economic data.   The Case-Shiller home price index came in better than expected and showed home prices in the US fell -15.4% from last year after being down -17.0% the prior month. The blockbuster was consumer confidence, however, and it improved to 54.1 in August after a 47.4 print previously. The euphoria would not last though as the US budget

forecast came out later in the day and projected a record $9 trillion hole over the next 10 years. Risk promptly came off the boil. EUR/USD followed the goings on in stocks closely. The pair ratcheted up to a 1.4361 high before collapsing towards the 1.4290 area ahead of the close. It looks like we will need to see a clean break below 1.4250 to see the downside persist here, however. Cable was also decimated from a 1.6444 high to the 1.6340/50 zone. We are following the hourly descending wedge in GBP/USD with 1.6320 the immediate break point. Last week's lows by 1.6375 lurk if through there. Oil came off hard as a test of the $75/bbl level failed miserably. Black gold closed just above the $71 level when the dust settled. This saw USD/CAD catch a major bid and recover towards the 1.0870 highs after lurking near the 1.0720 area early on. The highlight in Asia now is the Japanese trade data. Look for potential for some JPY weakness should the numbers come in on the light side. A worsening trade picture in the region could reignite talk of currency intervention. Upcoming Economic Data Releases (Asia Session) prior expected 8/25 23:50 GMT JN Merchnds Trade Balance Total JUL ¥508.0B ¥385.0B 8/25 23:50 GMT JN Merchnds Trade Exports YoY JUL -35.7 -38.4 8/25 23:50 GMT JN Merchnds Trade Imports YoY JUL -41.9 -42.5 8/25 23:50 GMT JN Corp Service Price (YoY) JUL -3.20% -3.40% 8/26 0:30 GMT AU Construction Work Done 2Q - - -3.00% 8/26 1:00 GMT AU DEWR Skilled Vacancies MoM AUG -1.70% - - 8/26 5:00 GMT JN Small Business Confidence AUG 41.1 - -