ECB's Stark said last week's rate cuts will help to "stabilize" the situation "in the medium term". He added, however, that central banks must be "cautious" as they have only one instrument they can use and stressed that price stability is the "preconditions" for economic growth and the creation of jobs". Stark also said though, that inflation risks have diminished amid slowing growth and declining oil prices. The comments would support our view that the ECB is likely to keep rates steady in November, but also indicate that they are likely to come down further as inflation continues to slow. French September consumer prices declined 0.1% m/m, bringing the annual rate down to 3.0% y/y from 3.2% y/y in the previous month. The EU harmonized HICP was unchanged over the month, with the annual rate decelerating to 3.3% y/y from 3.5% y/y in August. Lower oil prices helped to bring inflation down, with energy prices down 0.4% m/m and prices for oil products declining 1.3% m/m, after already dropping 5.7% m/m in August. The breakdown also showed price declines for services, especially health and transport services. Food and tobacco rose slightly over the month. All in all a similar picture as elsewhere, with lower oil prices helping to bring down the overall rate. With September CPI already released and in the light of last week's rate cut data do little to change the growth and inflation outlook. Meanwhile, EUR-USD's upside was capped after the 1.3700 level remained intacted in to the European session. Good demand for the euro crosses aided the rally in the dollar pairing, with EUR-JPY pushing through the 140.00 handle in early trade before turning back in to the 139.00 area, while EUR-CHF briefly reclaimed 1.5500. Buyers of EUR-USD have included momentum accounts and proprietary names, while an Eastern European name was a very heavy buyer. There are a number of short term forecasts for a potential EUR-USD move on 1.4000 as the market unwinds some of its safe haven bid in to the dollar. The EU's broad policy measures should underpin as least temporarily as the lack of previous coordinated policy weighed. However, eurozone recession fears and expectations of easier monetary policy is expected to fuel real money euro selling, along with interest from macro accounts. Meanwhile, also of note today are large size 1.3600 option expiries and there are smaller strikes noted at 1.3700.