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AUD odabook I see decent weakness now 9360-9310 by specs and real money, with more significant demand now 9250-9280 as Corp Int rests there, topside supply 9410-50 mix of Corp and spec with short term weakness just sitting above and then better selling all the way up to 9650 as has been our book make up over the last few months, for choice today look for 9360-9420 to cap with slight improvement in USDs matched by better sentiment, so look to fade moves towards those extremes with a risk that weakness under 9350 might trigger first
Topside jap says they have stops 99.20-35..then offers 99.40-50….
but at this rate most of this is moot given we stuck in 55-75
The softness in risky assets has been partly attributed to the risk of a government shutdown in the US (our economists have upped the probability from 15% to 30%). The first hurdle is the Continuing Resolution bill that needs to be approved before 1 Oct. By attaching the defunding of Obamacare (a popular demand) to the CR bill, the Republicans hope are hoping to make the threat of a government shutdown less politically dangerous and therefore more credible. There are two ways a government shutdown can happen next week: 1) the ongoing Senate filibuster by Ted Cruz delays the CR – but this is unlikely as many Republicans are against Cruz’s approach, 2) the bill sent back to the House (sans Obamacare defunding) is not approved before the Oct 1 deadline – possible but will still be politically costly and a bargain remains likely. However, the current CR bill will be far from the end of the story – particularly since a shortened version of the bill (till Nov 15) is being proposed – and the debt ceiling debate is even closer (mid-Oct). This fight will continue even if the CR bill is passed before Oct 1.