Analitics
The RBA may hold due to a weaker dollar
The Reserve Bank of Australia is scheduled to hold a monetary policy meeting on Tuesday, at which the board will determine what the official cash rate will be. In response to weak global economic conditions, falling asset prices and other negative influences on domestic growth the RBA lobed 200 bps of the official cash rate in only 19 months, bringing it to its lowest ever level of 2.75%. Recently, some of those pressures have eased as global sentiment has improved.
Source: Forex.com
27.06.2013
Gold and silver take another battering
Silver and gold prices have broadly been in a downward trend since 2011 when both metals posted all-time highs. XAUUSD topped out around 1921 and XAGUSD reached 49.80, before the price of both metals started to slide. In approximately 2 years silver has lost around 62% of its value and gold has lost around 35% of its value.
Source: Forex.com
26.06.2013
The Nikkei gets hammered, again
The Nikkei 225 started the day well, with the index rising during the morning session, before the sellers pilled-on thick and fast after lunch. A risk-off tone in the market is being fuelled by a credit squeeze in China (see: China to fine tune policy).
Source: Forex.com
25.06.2013
China to fine tune policy
The People’s Bank of China (PBoC) released a statement over the weekend stating that it may fine-tune its policies, which has recently been code for policy loosening. Yet, we don’t think the bank will cut rates anytime soon or inject huge amounts of money into credit markets to boost liquidity, as a loosening of policy would likely exasperate some financial problems facing the country, particularly with regards to ballooning property prices in some of China’s major cities, and threaten its efforts to rein in the country’s shadow banking sector.
Source: Forex.com
24.06.2013
Japanese investors weigh in
The Fed’s hawkish stance at its latest meeting sent investors flocking to the US dollar, with the market rewriting its expectations of when the Fed plans to start tapering asset purchases. But even before the Fed-related drive to USD sent USDJPY through 97.00, investors were selling the yen. Is it a sign of a deeper correction?
Source: Forex.com
21.06.2013
Post the FOMC: a few thoughts
The markets are still in carnage mode post the FOMC. The worst of the damage has been in emerging markets, but the yen surge looks like it is out of steam, likewise, Treasury yields look poised to move higher. The interesting thing about last night was that the Fed seems to have ditched its softly, softly approach to the end of QE3. Last night was about coming clean to the market and laying it out as it is: tapering will happen later this year if economic growth stays at its current pace, and, shock horror, interest rates will eventually have to rise.
Source: Forex.com
20.06.2013
June FOMC statement removes downside risks and opens the door to tapering QE in 2013
Today’s FOMC statement produced no major changes to monetary policy:
Maintains $85B a month pace of purchasing Treasuries & Mortgage Backed Securities
Kept rates at 0-0.25% as long as the unemployment rate remains above 6.5% and 1-2 year projected inflation remains below 2.5%
Source: Forex.com
19.06.2013
Further rate cuts from the RBA?
The Reserve Bank of Australia (RBA) retains its easing bias, but is keeping its options open. The minutes from the bank’s policy meeting earlier this month underpin a bank in wait-and-see mode. The RBA noted that the inflation outlook may provide scope for further easing, if needed to stimulate demand, adding that there are some signs of life in the Australian economy, partly due to the recent decline in the Australian dollar. Yet, the bank acknowledged that the tone of domestic data is mixed, partly due to falling export prices, resulting in below trend growth.
Source: Forex.com
18.06.2013
Is GBPNZD looking to retest a resistance zone around 2.0000?
This time last week GBPNZD was rebuffed at a major resistance zone around 2.0000. The pair then retraced somewhat before finding some support around 1.9255 – 50.0% retracement level from the aforementioned high.
Source: Forex.com
17.06.2013
Some musings on this week’s volatility ahead of the FOMC
We are rounding off a week where USDJPY rose to a high of 99.30 before crashing to a low of 93.79, the Nikkei fell more than 6% and EURUSD and GBPUSD climbed to their highest level for four months. We will talk more about the events in Emerging markets in our Week Ahead report released later, but needless to say there was carnage in EM FX, which resulted in official intervention in Poland, Turkey, Indonesia, Brazil and India to stem the decline in their currencies.
Source: Forex.com
14.06.2013
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