Updated May 23, 2013 11:00:00 AM
Written by Eric Viloria, CMT
The Japanese yen is the big mover today in the G10 space after reports showing that Japanese investors returned to being net sellers of foreign bonds after 3 weeks as net buyers of overseas debt. Ministry of Finance flow data showed that Japanese investors sold a net ¥804.4B in the week ended May 17 To add to that, the private sector reading of May manufacturing PMI in China surprisingly fell below the 50 threshold with [...] Continue Reading ...
Updated May 23, 2013 7:00:00 AM
Written by Kathleen Brooks
There have been some violent moves across asset classes this morning after a perfect storm of central bank chatter, weak Chinese economic data and some large declines in Asian equities knock risk sentiment. European stocks are down 2% or more, and US stock market futures don’t look much better. The yen and CHF are higher in the FX space as risk aversion takes hold. So what is driving these moves? It could be down [...] Continue Reading ...
Updated May 23, 2013 4:00:00 AM
Written by Kathleen Brooks
It’s been a volatile 24 hours for USDJPY, which has traded in a 200 pip range, after trading in a 100 pip range for most of the last week. After rallying on the back of the Bernanke testimony on Wednesday, it has retreated so far today, falling back below 101.50 – its lowest level since mid-May. Key drivers of yen strength so far include: • The fall in purchases of foreign stocks and bonds [...] Continue Reading ...
Updated May 22, 2013 4:30:00 PM
Written by Chris Tevere, CMT
Cable has once again extended its decline (over the past 48-hours) on the back of a combination of GBP weakness and USD strength. This was prompted by both fundamental and technical factors. Fundamental highlights contributing to GBPUSD decline: • UK April CPI: +0.2% vs. expected +0.4% MoM • UK April Retail Sales: -1.3% vs. consensus +0.1% MoM• UK April Public Finances: -10.8B vs. exp. -4.0B• Bank of England meeting minutes were [...] Continue Reading ...
Updated May 22, 2013 11:35:00 AM
Written by Kathleen Brooks
Fed Chairman Ben Bernanke’s testimony on the economy to the US Congress, has so far been the epitome of neutral. In typical Bernanke style he has oozed caution, unwilling to side with the doves or the hawks, leaving the markets in a bit of a fluster. Highlights: • He said that policy will remain accommodative “as long as needed”. • Premature tightening “increases the risk of slowing or ending the recovery”. • [...] Continue Reading ...
Updated May 22, 2013 11:30:00 AM
Written by Eric Viloria, CMT
The Bank of England minutes from the May meeting released this morning was largely as expected and showed that Governor King was once again outvoted. The soon-departing Governor voted in favor of a £25B expansion of quantitative easing (QE) along with MPC members Miles and Fisher. However, the doves were unable to gather enough support as the majority decided to keep policy steady. Minutes are backward looking as they reveal the MPC’s discussion on May [...] Continue Reading ...
Updated May 22, 2013 11:00:00 AM
Written by Kathleen Brooks
When stock markets are at record highs it can be a stressful time as history tells us that bull runs always come to an end. In the past, a lead indicator of market sentiment has been the gold/ silver ratio. This is the gold price divided by the price of silver, when it is moving higher the gold price is outpacing gains in silver, and vice versa. Since gold is considered a safe haven [...] Continue Reading ...
Updated May 22, 2013 8:50:00 AM
Written by Kathleen Brooks
The dollar is back in the ascendency today as we lead up to the key event that ALL eyes will be on: Fed chairman Bernanke’s testimony to Congress at 1500 BST/ 1000 ET. USDJPY is close to the top of its range at 103.30, while the dollar index has also broken higher and looks like it might make another stab at 84.00. So what are the risks from Bernanke’s speech for USDJPY traders? • [...] Continue Reading ...
Updated May 22, 2013 5:30:00 AM
Written by Kathleen Brooks
It’s been a rough morning for GBP, with economic data thwarting early attempts at a GBP recovery. BOE minutes, retail sales and public sector data all weighed on the pound, pushing it below 1.5100 – a key support level. Data details: • BOE minutes were as expected: 6-3 vote to keep QE on hold. This reinforces he view that the BOE is practically in limbo until Mark Carney takes the helm in July. [...] Continue Reading ...
Updated May 22, 2013 1:09:38 AM
Written by Chris Tedder
The Bank of Japan elected not to adjust its current easing plans. Instead, the bank retained its commitment to its plan announced in April to increase the supply of money in the economy by 60-70 trillion a year. At the same time the bank upgraded its economic assessment of Japan. This was all expected and fairly mundane, the market was really looking for guidance on how the BoJ plans to address the threat of rising [...] Continue Reading ...
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