London, May 16 (BridgeNews) - The following is a summary of overnight moves since Europe's close, plus possible leaders for the session ahead:

KEY HEADLINES:

* Markets shift to expect more Fed cuts despite 50 bp move
* USD expected to do well as Fed lifts growth prospects further
* Euro zone CPI, French IP data the focus in Europe

USD remains firm after Fed cut

The USD is trading higher following the Fed's 50 bps rate cut of Tuesday, which took the Fed funds target to 4.0%. But most of the gains came in early Asian trading, the decision itself prompting only a muted reaction.
--The USD was very much focused on equity markets and, as these showed little reaction to the cut, EUR/USD ended the US session around 0.8780, unchanged from before the decision. The pair pushed to a 3-day high of 0.8810 in early Asian trading as stops were triggered around the 0.88 figure. However, selling from European names plus US bids in USD/JPY sent the pair smartly back to an intraday low of 0.8748. USD/CHF came off an early Asian, 6-day, low of 1.7402 to hit an intraday high of 1.7510.
In a statement following the cut, the Fed hinted strongly that further cuts may be in the offing, saying the risks are weighted toward economic weakness rather than inflation. The Fed concentrated on the business sector in the statement, highlighting the risks to capital spending of lower corporate profits.
US Treasury Secretary O'Neill said the Fed's rate cuts have created the prospect for a rebound of the US economy.
Wednesday sees the release of French trade and industrial production data for March at 0645 GMT and 0650 GMT respectively, plus Italian CPI for April at 0700 GMT. US CPI data for April is released at 1230 GMT. UK Average earnings data for March are released at 0830 GMT.
--USD/JPY pushed to a near 3-week high of 124.05 in mainly options related trade which soaked up offers from Japanese exporters. EUR/JPY was caught in the middle of EUR/USD's losses and USD/JPY's gains, and edged to a 6-day high of 108.68. Japanese Finance Minister Shiokawa said current JPY levels are appropriate and that he is not considering intervention "at this time."
--USD/CAD fell steadily in US trading to a 3-day low around 1.5450. Canadian Prime Minister Chretien appeared to let slip a key piece of Finance Minister Martin's economic update due on Thursday, telling the House of Commons that the surplus in the 2000-01 fiscal year will be 15 bln CAD.
--The AUD tracked the EUR move for move, AUD/USD dropping from an early Asian, 3-day, high around 0.5235 to an intraday low around 0.5185. A US investment bank was prominent among the sellers.