Watching yen crosses

21 October, 2015

As I talked about yesterday, one of the factors that has been crushing FX volatility recently has been the removal of near-term rate move expectations, principally from the Fed, but also from other central banks. We’re going to have more indication on this over the next couple of days with the Bank of Canada decision today and the ECB tomorrow. Overnight, we’ve also seen the Reserve Bank of Australia strike a relatively bullish tone in their latest set of minutes, which gave some further legs to the Aussie rally. There are some residual thoughts of one further easing, but this is looking less likely at the present moment in time.

Looking to today’s decision from the BoC, recall that they have cut rates twice this year, being one of the first to cut rates during the global easing phase earlier in the year, anticipating the weakness in the economy in the first half of the year. There have been signs of recovery since then, so the focus today is more with the accompanying statement, rather than chance of a cut in rates, which looks pretty slim. The ECB was also sounding more confident yesterday in its latest Bank Lending Survey, which suggested that QE was having an effect. Today’s data releases are going to take a back seat in relation to the central bank events. EURJPY continues to look the most interesting cross for the time being, having bounced off trendline support for the past several days, which comes in at 135.34 today.


Source  
Stocks bargain hunting keeps markets afloat

Wall Street experienced the strongest collapse in two years on Monday, showing a 3.5% drop in key stock indices. European indices faced a similar...

Oil seeking out a new bottom

Oil opened the week with a more than 3% drop near $56 per barrel of Brent and below $52 per WTI. The oil "mini-reversal" occurred along with the stock...

Oil prices climb on prospects for deeper OPEC+ output cuts

Oil prices edged higher on Thursday, as investors hoped the world's biggest producers would cut output more, while they largely shrugged off forecasts...


Natural Gas is in the middle of a perfect storm

Concerns about the influence of the Chinese coronavirus returned to the markets at the end of last week. The focus was on forecasts of a slowdown...

Chinese markets drop amid virus fears

Stocks in mainland China plummeted more than 7% on Monday as they returned to trade following an extended holiday amid an ongoing...

Crude Oil as the weakest link in China virus story

The global financial markets remain under pressure, gripped by fears of the new coronavirus' impact on the economy. Chinese exchanges stayed closed from...


Calls for a US "digital dollar" rise

A growing number of voices are calling for the U.S. to issue a "digital dollar" as China continues to work on a digital version of its own currency. Users of the U.S...

Death Cross growth abroad threaten U.S. dollar

Storm clouds are gathering over the U.S. dollar, threatening a two-year rally in the currency that has squeezed corporate profits and angered...

Will the BoJ and the ECB join the Fed?

Monday is a day off in the American markets due to the Martin Luther King's Day. Because of the holiday, trading on other markets also promises...