Awaiting Bundestag, EU Summit, US Home Sales

Eurozone summit begins at 1:15 pm ET, USDJPY at new lows; Japan ready to buy EFSF bonds; UK CBI orders dropped. Market turns to durable goods orders, new home sales and Canadian monetary policy report. See our latest Premium trades below.

EURUSD continues to trade in the recent 3950-3880 range ahead of the EU economic summit. The extent of private sector involvement and leveraging the EFSF are two key areas that will impact the market sentiment the most.

German parliament votes today on leveraging the EFSF. While passing is widely expected, if it is rejected/decision delayed, it could send the common currency lower as the EU summit would not be able to conclude this important issue. The Eurozone summit begins at 1:15 pm ET. Given the complexity of the issues, the press conference can be expected to take place late NY afternoon.

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USDJPY reached a new historical low today at 75.70. Japanese finance minister Jun Azumi said that he "will not rule out any steps on fx" and stated that it would be difficult to apply measures similar to those used by the SNB. This is the first time that he confirmed that such measures are even under a consideration. As jawboning has proved to be ineffective in tempering the JPY rise, an actual intervention or other unconventional steps might be considered. Minister Azumi also said that Japan is ready to buy EFSF bonds if the Eurozone presents a credible plan to solve the debt crisis.

UK CBI industrial orders dropped to -18 in October from previous -9 which is the largest drop since October 2010 and below expectations of -7. Deteriorating conditions and ongoing financial crisis in Europe is blamed. GBPUSD pulled back to 1.5976 after reaching 1.6040 earlier during the session.

The NY session kicks off at 8:30 am ET with September durable goods orders that are seen lower at -0.7% from previous -0.1%. However, core orders are expected higher at 0.5% from -0.1% in August.

US New home sales are due at 10:00 am and are anticipated higher in September at 302K from 295K.

CAD traders should watch for BOC Monetary policy report due at 10:30 am and BOC press conference that starts at 11:15 am.

At 16:00 the RBNZ will announce their rate decision. Rates are widely seen unchanged at 2.5%.

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