Video: EURUSD Uneasy Over Stimulus Ruling, Pound Mixed Response to CPI

Talking Points:

• Top event risk this past session in UK CPI wouldn't see a clear bullish or bearish outcome for GBP

• A top EU Court ruling on the ECB's OMT program could trouble QE waters and send the Euro reeling

• Risk trends suffered another wave of nausea but once again are short of the critical breaks

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Both risk-based volatility and monetary policy-derived trend development stirred the markets this past session. The S&P 500 suffered an aggressive intraday reversal Tuesday that drug Yen crosses and other speculative-leaning assets with it. Yet, as turbulent as the markets were; the unspoken 'lines in the sand' were not crossed. The most prominent hold-out to speculative rebalancing, the S&P 500, has inched closer to a 24-month bullish channel floor with a sense of ill intention. Risk weighs heavy on traders' minds, but monetary policy is more productive - and it may actually prove the ultimate flip on sentiment itself. This past session a near 15-year low in UK inflation has reinforced a downgraded BoE rate forecast, but core figures complicated the picture enough to prevent a clear bullish or bearish response from the Pound. Yet, between rate downgrade and risk aversion, I have stepped into GBPJPY. Ahead, risk and rate watchers will be watching an important EU court advisement on the ECB's OMT program a week before the official rate decision. We discuss what is moving the markets in today's Trading Video.

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