This is a review of the elements likely to affect foreign exchange (forex) trading in the European session:

Main headlines

IMF Sees European Banks Facing $4.5 Trillion Sell-Off - Bloomberg

Yellen Says If Fed QE Boosts US Growth Then World Will Benefit - Bloomberg

China Money Rate Drops as Central Bank Adds Funds - Bloomberg

Middle East Could Steal Focus From Growth Concerns - CNBC

NATO plans to back Turkey over Syria spillover - Reuters

Americas wrap-up

S&P sees lower 2013 growth for US state and local governments - Reuters

Dollar to Gain on Stronger US Growth, FX Concepts' Taylor Says - Bloomberg

Wall Street Pay Remains High Even as Jobs Shrink - CNBC

Facebook Fought SEC to Keep Mobile Risks Hidden Before IPO - Bloomberg

Alcoa Kicks Off Earnings Season With a Beat - CNBC

Alcoa Cuts Global Aluminium Forecast on China Slowdown - Bloomberg

Asia-Pacific summary

Asian Stocks Drop as China Slowdown Weighs on Earnings - Bloomberg

China injects Rmb265bn into money markets - FT

Top China delegate pulls out of IMF meet amid islands row - Reuters

Japan and South Korea cut currency swap - FT

Leaving the Chaebol - WSJ

Singapore May Ease Currency Gain as Growth Slows - Bloomberg

Australia Sells $3.3 Billion of Longest Debt in 3 Decades - Bloomberg

'Titanic' Defaults Loom on Restructured India Bank Debt - Bloomberg

Indonesian Anti-Graft Agency to Investigate Police - WSJ

Lenovo Bets Convertible Tablet Can Win Share From Apple - Bloomberg

European news

IMF warns eurozone on capital flight - FT

Financial transaction tax gains approval - FT

Euro slips near 200-day average as risk sentiment hurt - Reuters

EU treaty sails through French parliament - FT

Angry Greeks protest Merkel visit - Reuters

Samaras Bolstered as Greece Aims to Wrap Up Troika Talks - Bloomberg

SNB's Jordan: Euro/franc floor at 1.20 is right policy for now - Reuters

King signals inflation not primary focus - FT

FSA eases bank rules to boost lending - FT

EADS, BAE fight odds to save merger - Reuters

European Forex preview

FOREX action

EUR: The euro cross-rates continue to consolidate after the gloomy figures from the latest IMF's World Economic Outlook. The Eurozone continues to be the main threat to financial stability according to IMF economists. EUR-USD has broken the 1.2900 support zone and is heading towards 1.2850. EUR-JPY holds above 100 close to 100.60.

GBP: The sterling crosses are still in book squaring mood. Cable trades a tad below 1.6000 while GBP-JPY is close to 125.00. EUR-GBP is under 0.8050. Weak industrial production numbers released yesterday in the UK had a negative impact on the sterling. BOE governor King has signalled that inflation is not their primary focus.

CHF: The Swiss franc shows signs of weakness against the US dollar. USD-CHF has breached the 0.9400 resistance zone. Meanwhile EUR-CHF trades close to 1.2100 after SNB president remarks. Thomas Jordan has said that the euro/franc floor at 1.20 is the right policy for now.

Nordics: The Swedish krona and the Norwegian kroner shrug-off recent losses. Renewed risk-aversion related to European debt problems help to abate growing signs of some sort of contagion effect from South to Northern Europe. EUR-SEK moves well above 8.60 and EUR-NOK is still below 7.40.

USD & JPY: The US dollar and the Japanese yen are well bid under a new volatility spike. Under a data-shy calendar in the US all the attention will be focused on the Fed's Beige Book. USD-JPY trades sideways pivoting in the 78.30 area.

CAD, AUD & NZD: The three dollars show today diverse trading patterns. Yesterday they all rallied in synch after a new record liquidity providing injection by the People's Bank of China. AUD-USD is still trading close to the 1.02 support zone.

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