European Open: stabilization continues

Markets continue to stabilize ahead of the FOMC and the BoJ this week, in a quiet Asian session.

No decisive action from Nikkei, few flows on the Euro and the Jpys but nothing decisive. 

Mixed data from China yesterday, although the more influential Industrial Production came out worse than expected. But not enough to spark a risk-off theme.Volatility is dropping slightly actually, which may support risk-on this week. 

BoJ comes into focus tonight. The central bank is broadly expected to leave its policy unchanged & Governor Kuroda is expected to maintain his optimism. However, recent jawboning & data support a more dovish view of conditions in Japan, which could help to fuel expectations for additional easing. I expect this to be positive for Jpy pairs and for risk-appetite.

However for today in particular, with no market movers on tap, and dull action into the EU session, it looks best to sit this one out. Refer to the Game Plan for the pairs on my watchlist.