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  
Market shows demand for yielding assets

The market shows demand for yielding assets, which in turn supports demand for the stocks and currencies of emerging markets. The main...

Yuan and Dollar as a weapon in trade wars

The US Nonfarm Payrolls on Friday could even be called boring: the report showed the preservation of a completely healthy labour market...

Disappointment with Fed and tariffs

Trump announced 10% tariffs on Chinese goods worth $300 billion since September 1, thus ending the US-China trade truce after disappointingly...


Fed pushes down stocks

Markets have started the week under pressure. Expectations that the Federal Reserve will cut interest rates by 50 points in July collapsed...

Gold updates new 6-years highs

Gold benefits from a combination of two factors: lower interest rates in debt markets and continuing hopes that the global economy...

Markets recede from the recent highs

A strong Nonfarm Payrolls caused pressure on the stock markets, reducing the chances of the interest rates lowering by the Fed in the upcoming months...


Gold resumes rally, pushing past $1400

Gold prices resumed a push higher on Monday, as flows into the precious metal continued on improved prospects for easier monetary policy from...

Gold rises as markets slip

Market caution continues to support gold. Quotes of this metal rose to $1337, repeatedly trying to push above this year highs at the 1340-1360 area...

Trump says Brexit should happen

President Donald Trump promised the U.K. a "phenomenal trade deal" Tuesday, on the second day of his state visit to Britain...

  


Share it on:   or