Government Increases Pressure on the BoJ to Ease
Original Article from ACM – Newsletter
The lack of 1st tier economic data and stories that have failed to capture the market’s imagination have kept FX markets in check. However, in Japan the rhetoric is really heating up, with even stronger worded comments regarding the stronger JPY and their perpetual fight against inflation, being hurled in to the market. Japanese PM Hatoyama said that the current market pricing of the yen did not…
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RBNZ Dovish, SNB Still To Come
Original Article from ACM – Newsletter
A bit like the football team AC Milan – star performer in years gone by – NZDUSD took a good old beating last night. Although the RBNZ’s decision to keep rates on hold at 2.5% was widely expected, the statement and subsequent commentary was altogether more dovish, and extinguished at least some of the prior enthusiasm for NZD this year. The statement repeated comments that the central bank…
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GBP Under Heavy Selling Pressure
Original Article from ACM – Newsletter
Overall trading has been insipid in the Asian session, a testimony to the lack of real drivers out there. And while we have seen some decent volatility in FX, pairs have not broken out of mid-term ranges. Interestingly, equity indexes continue to climb higher with S&P closing on the resistance at 1150, VIX safely below 20 and Crude prices steadily rising to $82.00bll. The Australian data was…
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China’s Comments Will Haunt Gold Buyers
Original Article from ACM – Newsletter
FX markets were nervously quiet in Asian session, just waiting for a directional catalysis. Initially, the deputy governor of the PBoC and the head of the SAFE, Yi Gang, at a press conference in Asia, provided some detailed and honest comments regarding China’s foreign exchange and reserve policy. These comments reinforce remarks made on Friday from PBoC Gov. Zhou and Prime Minister Wen. On the…
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Pressure on Greece and EUR Ease
Original Article from ACM – Newsletter
Risk appetite has been cautiously creeping back into FX markets at the start of this trading week. While a one day doesn’t make a trend, the broader environment is shaping up to support a sustained rally in risk sentiment. First of all, the passing of the new austerity measures by the Greek congress on Friday was a step in the right direction. While unions immediately called for a general strike…
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Greece Far From Out Of The Woods, Despite Successful Debt Sale
Original Article from ACM – Newsletter
This week’s sale of Greek debt has gone unequivocally well; with pension funds and insurance companies alike lapping up the chance to secure 10 year bonds at a mouth-watering 6.35% yield. Compare that with Spain’s similar 5 year offering yesterday which went for 3% and the fact that this yield represents a hefty 295 basis points more than comparable German debt, and it’s clear to see why…
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Waiting on the BoE & ECB
Original Article from ACM – Newsletter
We still can’t shake the admission from the Greek Prime Minister that there were “holes” in the budget and tax collection was in “shambles”. While markets have initially embraced the Greek announcement of a 3rd set of new austerity programs, we have a hard time believing that these optimistic goals are actually attainable. It’s easy to austerity “grandstand”, the hard part is execution and we are…
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Waiting on Greeces New Austerity Package
Original Article from ACM – Newsletter
Barring a bombshell from the Greek austerity press conference, we believe markets will stay relatively quiet ahead of the BoE, ECB and Fridays NFP. In this environment, we will be looking to play the daily ranges. Leaks of the announcement conference have spilled out, with media outlets citing Greek government sources, saying that the government has decided on $6.5 billion in extra austerity…
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RBA Hike Fails to Lift AUD & Waiting for the BoC
Original Article from ACM – Newsletter
Markets were quiet until Europe woke up, where we saw a steady unwind of risk. The EURUSD traded down to 1.3490 from 1.3560, while the GBPUSD fell to 1.4860 from 1.4960. While in the mid-term we are short risk right now these pairs are well oversold and we would expect a near term term risk rally. There was really no single catalyst for the move, rather a continuation of yesterday’s…
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Speculation of an Evolving Bailout Plan
Original Article from ACM – Newsletter
Markets seem to be in a state of paralysis, unable to find a clear direction this Monday morning. The EURUSD was contained in a tight 100 pip range, while the USDJPY languished right below the Ichimoku daily could cover. Starting this week, the early part of March is filled with events which have the ability to truly shift market direction. This week is packed with macro G10 economic data…
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