Tuesday, October 12, 2010
Previous session overview
The yen rose against the dollar in Asia Tuesday despite warnings of possible intervention from the Japanese government, as investors viewed any action by Tokyo as not powerful enough to change the direction of the market.
Finance Minister Yoshihiko Noda reiterated earlier in the day that the government would take "decisive steps", including intervention, if necessary to stem the yen's rise.
Meanwhile, amid speculation that Japan's stance on currency intervention may find a lack of support among other leading economies, Economy Minister Banri Kaieda said that Noda explained Tokyo's view at a weekend meeting of financial chiefs from the Group of Seven industrialized nations in Washington and "seemed to get some understanding from his counterparts."
But investors shrugged off the remarks and increased their holdings of the yen. At 0450 GMT the dollar was at JPY81.94, down from JPY82.13 in New York Monday. Dealers said it's only a matter of time before the greenback drops below JPY81.00.
Elsewhere, the euro fell to JPY113.58 and USD1.3862 from JPY113.97 and USD1.3877 as investors turned away from riskier currencies due to weaker Japanese equities.
The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 77.518 from 77.500.
The Pound eased further in Asian trade on Tuesday, as RICS house price index fell to -36 from -32, to record it lowest reading since May 2009 whilst BRC retail Sales also fell to 0.5% from previous 1.0%, justifying the BoE's disregard to near term inflationary pressures.
The Australian dollar fell in Asian trade Tuesday as investors treaded lightly ahead of the release of the Federal Reserve's October meeting minutes later in the trading day and key Chinese data due on Wednesday.
Market expectation
Foreign exchange majors traded in tight ranges with markets looking to the U.S. Federal Reserve's November policy meeting. The FOMC minutes expected later in the global day will be watched closely for any signs of more quantitative easing.
Large EURUSD sell stops stand at USD1.3790, say dealers; ads pair tumbled to low of USD1.3819 from USD1.3862 in past half hour as EURJPY fell to JPY113.12 from JPY113.60 on strong euro sales by hedge funds, commodity trading advisers.
GBPCHF may slip toward its all-time low of 1.51 as the Bank of England may resume quantitative easing, while the Swiss National Bank appears to have stopped intervening, say analysts.
European stocks are expected to open slightly lower Tuesday, with traders nervous about the forthcoming U.S. earnings season and taking their cue from lower U.S. stock-index futures.
Most important events of the day
| Oct 12 | Count. | Event | For | Unit | Imp. | Act. | Cons. | Prev. |
|---|---|---|---|---|---|---|---|---|
| 00:00 |  DE | Bundesbank President Weber at Shadow Open Market Committee Meeting in New York |  | |||||
| 05:00 |  JP | Consumer Confidence | Sep | index |  | 41.4 | 42.4 | |
| 06:00 | DE | CPI (Final) | Sep | % m/m | | -0.1 | -0.1 | -0.1 |
| 06:00 | DE | CPI (Final) | Sep | % y/y | | 1.3 | 1.3 | 1.3 |
| 06:00 | DE | Wholesale price index | Sep | % y/y | | 7.6 | 6.3 | 6.4 |
| 06:00 | DE | Wholesale price index | Sep | % m/m | | 1 | 0.4 | 1.6 |
| 06:45 |  FR | Current Account | Aug | EUR bn |  | -2.2 | ||
| 07:30 |  NL | Trade balance | Aug | EUR bn | | 3.1 | ||
| 08:30 |  GB | DCLG House Prices | Sep | % y/y | | 8.1 | 8.4 | |
| 08:30 | GB | BoE policy maker Miles speaks at the ESRI Conference in Dublin | | |||||
| 09:30 |  SE | Deputy Governor Svensson speaks on "Monetary Policy in Sweden, Europe and the United States" | | |||||
| 11:00 | SE | 2011 budget proposal | | |||||
| 14:00 |  US | IBD consumer optimism | Oct | index | | 44.5 | 45.3 | |
| 15:45 | US | Federal Reserve Bank of Kansas City President Hoenig gives speech to the National Association of Business Economics | | |||||
| 15:45 |  IE | Central Bank Governor Honohan gives speech on "Ireland and its Recovery from the Financial Crisis" | | |||||
| 16:00 |  EU | ECB President Trichet speaks at Economic Club of New York | | |||||
| 18:00 | US | FOMC release minutes of prior (Sept 21st) MPC meeting | | |||||
| 20:00 | EU | ECB Governing Council member Weber speaks on "European Monetary Union and the Financial Crisis: Lessons for Economic Policy" | | |||||
| 23:01 | GB | Nationwide Consumer Confidence | Sep | Index | | 59 | 61 | |
| 23:50 | JP | Bank Lending Data | Sep | % y/y | | -1.9 | ||
| 23:50 | JP | M2 Money Supply | Sep | % y/y | | 2.8 | 2.8 |
0 comments:
Post a Comment