Heading for showdown

9 February, 2015

As is stands, we are no nearer to seeing the way ahead with regards to Greece as European Finance Ministers gather this week to seek a way ahead on the issue. Greece appears as convinced as ever, judging by the PM’s speech yesterday, that it will not renew the bailout program when it expires at the end of this month and the Greek Fin Min could not even agree that he agreed to disagree with his German counterpart when they met last week. The volatility seen in Greek stocks (especially banks) and bond markets has reflected the ebb and flow of this position. The single currency has moved away from the recent highs on EURUSD, but so far the euro has not fallen out of bed on the back of events in Greece. Other peripheral markets have seen more volatility on their yield premium over Germany, but are far less concerned than was the case during previous phases of Greece tensions (back in 2010 and 2012).

Looking beyond events in Greece, we’ve seen overall levels of volatility in the FX markets remain elevated. This was pretty apparent after the strong US employment report on Friday, especially on USDJPY which pushed up around 1.5% higher in the wake of the release. Not surprisingly, the momentum towards a rate increase from the Fed this year increased as a result and supporting this has been the recovery in market-based inflation expectations measures, helped by the rise in the oil price over recent days. Sterling has also been pretty buoyant, holding above 1.52 on cable, with the commodity currencies (NZD and CAD). The Aussie remains the exception to this after the recent rate cut and indications of slower growth.


Source link  
Divergence Between Fed and BoJ

The March FOMC meeting will be held for two consecutive days from today. The interest rate decision will be announced at 18:00 GMT on Wednesday 15th March...

Market Volatility Expected Ahead of President Trump's Speech

In a speech that will be watched by millions of viewers in the United States and around the world, the President is expected to speak of his presidency and address pressing issues like his plans for health care, the tax system, the military, and his goals for his administration...

Gold Trades Below Resistance Ahead of the Fed and NFP

We will see the release of the US ISM Manufacturing PMI, and ISM Prices Paid for January, at 15:00 GMT on Wednesday 1st February...


Sterling Struggles Ahead of Theresa May's Speech

Theresa May will make a speech outlining her plans for Brexit tomorrow, Tuesday 17th Jan, before the UK triggers Article 50 to leave the EU...

Dollar Turn-around on Trump's Press Conference

President Elect Trump's first press conference after his victory in the US presidential election, was held yesterday around at 16:00 GMT. It has caused great volatility to the dollar and the markets...

Gold Nears Major Resistance Ahead of Trump’s Press Conference

Gold prices have rebounded since mid-Dec after testing the significant support line at 1120. On the 4 hourly chart, gold bullish momentum has been strengthened since the beginning of this year, helped by the dollar retracement...


Searching for a new narrative

Popcorn at the read today as President elect Trump has a scheduled news conference later in the day (around 16:00 GMT). Markets have become used to listening to him in 140 characters or less over the recent weeks, so a more elongated narrative should be welcome...

The sterling conundrum

Yesterday's early weakness in sterling, on the back of the latest comments from PM May surrounding Brexit, took cable close to key support levels and the resilience seen through most of the post US election period has been unwound...

Selling into USD strength

In summary, Friday US jobs report was pretty much in line with expectations, although the slightly better data on earnings gave some support to the dollar into the end of the week. As a result, the US currency was little changed from Tuesday opening levels...

  


Share: