Syria Hysteria, Chinese Industry Up Next

It's growing more difficult for the US to strike Syria as the public sours and Russia steps up diplomatic efforts. The Swiss franc was the top performer Monday while the yen lagged in an odd day of trading. In the upcoming session, China releases industrial production data.

Polls of Americans and Congressmen show minimal support for airstrikes on Syria with the first votes set for Wednesday. In the hours ahead Obama will attempt to rally support but whip counts show he's unlikely to find support in the House.

Russia opened a diplomatic window to end the international impasse as it proposed putting Syrian weapons under international control and Syria warmed to the idea. The response from the US State Dept was initially cold but could be a way for Obama to save face and de-escalate the situation.

In any case, fears of a regional spillover are diminishing and Sec of State Kerry said any attack would be 'unbelievably small'. Oil prices faded throughout the day and the US dollar was under pressure.

The pound found the strongest bid as it challenged the 6-month high and the 200-week moving average before backing off. That area will be key in the days ahead.

The Chinese stock market posted its strongest day in weeks on Monday, gaining 3.4% despite mixed trade data. The driver today will be industrial production data at 0530 GMT which is expected up 9.9% y/y after a 9.7% rise in July. Retail sales data are also due but the focus for AUD and risk trades will be on industrial production.