Australia: Last week was massive in the FX markets. The G7 nations commenced the largest intervention in foreign exchange markets since 2000 to weaken the JPY after its strong rise in the aftermath of the Japanese earthquake, tsunami and nuclear reactor meltdown. The intervention has seen global equity markets steady, and to continue to recover some of the lost ground from last week.

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All European and US markets were higher on Friday, as the headlines out of Japan have been overshadowed by continued tensions in the Middle East. The UN Security Council has adopted a no fly zone in Libya and conducted more than 100 missions on the weekend against Gaddafi's forces.

Also on Friday, US equity markets reacted positively to the announcement of dividend increases and share placements/buybacks by a number of major US banks. Gold was slightly higher at US$1418 an ounce and WTI oil slid a touch to US$113 a barrel. China continued on its tightening of lending standards by increasing bank reserve requirements by another 50 bps to 20% which takes effect on March 25. We expect a much quieter week with Japan closed today for Vernal Equinox Day and virtually no significant data scheduled for release.

Majors: The coordinated intervention by the G7 pushed the USDJPY down to 82 at one point and is starting the week in the mid 80's. The EURUSD hit its highest point in 2011 at 1.4200 and opens up trade just below that level this morning. The GBPUSD moved a touch lower after a record low UK consumer confidence report. On balance, AUD cross rates are similar to those levels of last week but well off their highs of a month ago.

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