Central bank divergence materialising

12 November, 2015

Overnight the Aussie has spiked following a big drop in unemployment with the rate falling from 6.2% to 5.9% leading to AUDUSD jumping to 0.7150. The 0.7000 remains a key support level for the Aussie below which it stubbornly refuses to dip below despite commodity prices remaining depressed and China’s economy continuing to slow at a pace. We’ve regularly discussed how the relationship between the Aussie and China has diminished so even though there are many calling for further weakness to the mid 0.6000 area, because of the breakdown of that relationship and the RBA’s slightly less dovish stance, the downside move has been hard to come by.

Today all eyes are on central bankers once again with firstly Mario Draghi who speaks to the EU Parliament at 8.30 GMT. Then later in the day we are bombarded by Fed speeches with Lacker & Bullard, then Yellen at 2.30 GMT, concluding with Evans afterwards. What will be key here is not so much whether there’s further evidence that lift off will happen next month, but any guidance as to how the cycle will unfold with the market expecting a gradual path of rate hikes. EURUSD will be the one to watch today as we are likely to see further divergence between the ECB and Fed, so the 1.0600 level is a major support level to keep an eye on.


Source link  
Trump's Tax Reform Plan

US Treasury Secretary Mnuchin announced Trump’s tax reform plan in a press conference...

Corporate Earnings Lift US Stocks

Last week the US President Trump stated on twitter...

Market Concerns Eased

The first-round voting of the French presidential election was revealed on Sunday night...


Dollar Plunged on Trump Second Statement

The dollar index fell to a 2-week low of 99.91 in the early hours...

Markets Eye on the First Trump-Xi Meeting

US President Trump and Chinese president Xi Jinping, are scheduled to meet today at Trump’s Mar-a-Lago resort in Florida...

Will the French Presidential Election affect EUR?

The first round of the French presidential election...


USD Firms Ahead of Q4 GDP Final Reading

The dollar index has rebounded noticeably from a 4-and-a-half-month low of 98.85, helped by outperforming...

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...

  


Share: