A more downbeat session last night, on lingering caution. There was no specific event to ascribe the mood to, rather continued concerns around possible tightening by China, as well as the possible regulatory tightening of US bank trading activity. The Senate Banking Committee is about to introduce a financial regulation bill for debate. The S&P500 is currently down 0.5% after falling 0.7% at the open, and financials are 1.3% lower. Earlier, the Shanghai Composite fell 1.2%. Commodities remained in a six-day slump, oil losing 2.1% to $79.50 and copper 2.0%. Gold held steady at +0.4%. US treasuries across the curve were little changed ahead of tomoprrow's FOMC, initially bid before the US data (IP and the NY Fed factory survey just beat expectations, although the survey detail was strong) took it higher in yield. Foreign buying of US securities in January fell due to record selling of corporate debt, but treasuries remained in demand.

The US dollar bounced 0.7% after the Sydney close to 80.40, risk aversion the driver. EUR slid from 1.3760 to 1.3640. A range of comments from various Eurozone officials left the market not much clearer on the extent of any bailout for Greece. GBP underperformed from 1.5200 to 1.5040. The yen was slightly stronger at 90.40. AUD fell from 0.9160 (reached just after the domestic close) to 0.9096, partly recovering to 0.9125, a bearish key reversal in formation. NZD initially spiked to 0.7055, then fell to 0.6990, and currently sits at 0.7000. AUD/NZD fell to 1.2980, but recovered to 1.3040.

AUD/USD and NZD/USD outlook next 24 hours: AUD's bearish technical signal, as well as our own models' pointers, suggest it should trade heavily today with minor resistance at 0.9160 and support at 0.9100 more likely to be tested. It's hard to see NZD above 0.7050 today, more likely a move towards 0.6960.