USD, CHF, JPY flows: USD firm after better ADP

USD strength extending in early US trading helped by slightly higher than expected ADP employment for September. USD/JPY seeing the biggest gains, with USD/CHF following as the safe havens generally suffer even though there has been no significant equity upmove. The JPY may also be suffering from the earlier comments from Ueda and Ishiba that indicated no early tightening is likely, although this is already in the JPY curve. JPY crosses look set to break Tuesday’s highs, but we doubt there will be a lot of upside beyond there, as the risk environment remains fragile and US equity valuations are high.