CURRENCY: The weekend risk could see markets opening either way on Monday and probably range trading until then. The risk is we see a central bank liquidity announcement tonight which would be positive NZD.

RATES: Local rates will open fairly steady after muted moves overnight, but the bias is likely to be to the downside given talk of more Fed easing.

REVIEW

CURRENCY: Increased chatter of FOMC action next week and possible central bank "bazookas" sees risk firm inside existing ranges.

GLOBAL MARKETS: Northern hemisphere markets were treading water today. Range trading was once again the name of the day as we sit waiting for the second Greek elections to pass. Equities were mixed across Europe, but the Dow was up 140 points at the time of writing. Broadly speaking, the USD has succumbed to mild selling, not helped by weaker CPI and initial claims data. As a result, the NZD is as strong as it has been in a month, breaking above 0.7800 again last night. European bond markets are still behaving in a slightly strange manner. Although German bunds held steady and Spanish 10yr yields were up 16bps to a euro era record, Italian, Greek and Portuguese yields fell. Newswires report that the Italian bond auction went well, with bid cover close to 1.6, but yields were way up on the last auction.

KEY THEMES AND VIEWS

THAT OLD CHESTNUT: Well, perhaps there are two old chestnuts to think about this weekend - the first being the Greek election, into which we are pretty much flying blind given the 2 week blackout on polling, and the last reading which had the pro and anti austerity camps neck and neck; the second is QE3 in the US. With regard to the former, what's needed in Europe are a fiscal compact, a substantially larger ESM, ECB rate cuts, and a proper ring fencing of the periphery. There had been talk in recent days of a massively expanded fighting fund, and given the joint liability assumption, this could be why bunds have been hammered. But why would Germany agree to that without centralised fiscal oversight (which has also been talked about more recently). All of this could come, but it's probably a stretch to suggest a complete solution will dovetail perfectly into the Greek election. That said, there have been rumours that the main central banks are preparing for coordinated action to provide liquidity after the Greek election, which has seen risk appetite improve. Such an announcement would certainly be welcome, and we need to be alert for headlines of the positive variety given the bearish mood "out there". With regard to QE in the US, the question now is, does last night's lower CPI data (and jump in jobless claims) justify the need for the Fed to "do" QE3? It might, particularly after Yellen and Lockhart's comments last week.

OTHER EVENTS AND QUOTES

� OPEC left its oil production target unchanged following a meeting in Vienna. The production ceiling will be held at 30 million barrels per day. Crude prices rose slightly, arresting (for now) a rapid decline.

� The Swiss National Bank has confirmed that it "stands ready to take further measures at any time" to prevent CHF appreciating further, and will defend EUR/CHF 1.20 with the "utmost determination".

� Rating Agency Egan Jones cut France's credit rating from A- to BBB+.

NZD/USD: Stable?

The RBNZ kept a steady ship, likely overall to increase the allure of the NZD. Global events still keep a lid on NZD although the effect on the NZD is diminishing as price action still tells us of demand for NZD but fear rules.

Expected range: 0.7680 - 0.7850

NZD/AUD: NZD has an edge ?

The NZD bill track points to an implicit tightening bias for the RBNZ and thoughts are it is enough to refocus people on the rates differential story, a story that points higher for this cross.

Expected range: 0.7785 - 0.7845

NZD/EUR: Glad we are not European?

Further topside moves are more likely on this cross all things being equal, but big moves either way are possible given the weekend election risk. Expecting volatility and anything else would be guessing.

Expected range: 0.6100 - 0.6300

NZD/JPY: Safe haven vs risk?

Big moves lower are possible, safe havens could be in demand over the next few days with JPY considered to be the "safest". Don't forget the BOJ though, as they have a mandate to suppress excessive moves.

Expected range: 61.20 - 62.10

NZD/GBP: Is GBP the new Europe safe haven?

This cross is expected to drift higher. Data from the UK has been weak and the BOE is likely to consider further asset purchases, however GBP/USD has been strong despite this on a dubious European safe haven rational.

Expected range: 0.50 - 0.5075