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Greece Rejects Greater EU Oversight

FxGates — Tue, 31 Jan 2012 00:00:23 +0000

With Greek negotiations ongoing but yet to reach a conclusion, media chatter over the weekend was dominated by reports that Germany wishes to have greater oversight of Greece’s budget – a proposal that Greece has readily dismissed. The suggestion was endorsed by German cabinet minister Philipp Roesler, and reflects the widespread scepticism both across the market and amongst policy makers that…

Swiss KoF Goes Negative

FxGates — Sun, 29 Jan 2012 00:00:23 +0000

USD selling continued for the majority of yesterday’s session. EM & commodity currencies have been a primary recipient to inflows. USDTRY sank to 1.7862, while USDRUB gapped lower at the open and proceed to fall to 30.1811. The impetus seems to be the residual effect of the FOMC meeting where Mr. Bernanke announced it would be nearly 3 years before hikes (he also indicated that selling of…

Fed Initiate Explicit Inflation Target

FxGates — Fri, 27 Jan 2012 00:00:57 +0000

USD was sold in Asian session as the FOMC sounded very dovish in their pledge to hold rates at near zero “at least through late 2014”. EURUSD climbed to 1.3134 while AUDUSD ran to 1.0642, on broad USD selling. In addition to the commitment to low rates the Fed also committed to explicit inflation targeting for the first time. Core personal consumption expenditure will be now steered towards 2.0%…

Waiting on a Potentially Less Dovish Fed

FxGates — Fri, 27 Jan 2012 00:00:25 +0000

The big mover in Asian session was the AUD, as a weaker headline CPI reading of 0.0% q/q vs. 0.2% exp pushed AUDUSD briefly to 1.0441. This read would put the year-on-year number slightly above mid-point of RBA’s 2-3% inflation band and forces traders to slightly rethink rate cut expectations. The OIS market is pricing in cuts of roughly 16bp for the February meeting. Given the contraction in…

SNBs Danthine To Speak

FxGates — Wed, 25 Jan 2012 00:00:50 +0000

In Asia session, liquidity was thin and flow were light as locals celebrated the second day of the Chinese New Year. BoJ unanimously keeps rate unchanged at 0-0.1% and asset-purchase fund left at JPY20 trn as was universally expected. In addition, monthly JGB purchases were held at JPY1.8 trn. EURUSD took a hit, falling to 1.2988 on a WSJ article and comment from Juncker ran on the wire. The WSJ…

Year of the Dragon Off to a Slow Start

FxGates — Wed, 25 Jan 2012 00:00:23 +0000

The first trading day in the year of the Dragon was unremarkable. With much of Asia closed fo the holidays trading was subdued. FX market positioning seems to indicate that traders are bracing for a significant pullback in risk appetite. The catalyst looks to be the disappointment created by the Greek debt swap plan. Whatever the outcome, it’s bound to come up short. In the short term, we suspect…

Strong Auction Results and PSI talks in Greece Support Risk

FxGates — Mon, 23 Jan 2012 00:00:43 +0000

Lack of fresh news prior to the Lunar New Year had FX markets trending. Gains in regional equities across Asian reflected the follow through from Wall Street solid performance. EURUSD contracted into a narrow range narrow range from 1.2954 to 1.2974 while AUDUSD solid off mildly from 1.2986 to 1.2918. On the data front, Australian export and import prices came in at 1.5% and 2.5% q/q. Rumors…

A Possible Greek Deal Gives EUR Bulls Hope

FxGates — Mon, 23 Jan 2012 00:00:21 +0000

Risk appetite remains firm in Asia session with decent USD supply pushing up risk correlated FX trades. EURUSD was able to rally to 1.2868 on growing optimism over the latest Greek PSI proposal. Financial Times reports that rather than having a fixed coupon, that had been a barrier in discussions, the strategy is to provide a flexible coupon. The latest headlines is calling for a coupon starting…

Fitchs Comments Hurt Sentiment

FxGates — Thu, 19 Jan 2012 00:00:42 +0000

Asian session was subdued with G10 flows unexceptional. EURUSD bounced around 1.2752 to 1.2807 while AUDUSD made a steady climb to 1.0413 (short of 200d ma) before dropping sharply. Traders will focus on Greek PSI issue as talks are expected to resume today. China headlines once against dominated a quiet session a china official stated support of smaller banks in targeting RRR for Guizhou banks….

China’s GDP Gives Risk a Much Needed Boost

FxGates — Thu, 19 Jan 2012 00:00:21 +0000

It was risk-on in Asian session after a very gloomy 24hrs. The catalyst was the strong China Q4 GDP print of 8.9% vs. 8.7% expected. China retails sales also surprised to the upside with a print of 18.1% vs. 17.2% y/y exp. Today’s good China GDP report should provide further support to the argument for a “soft landing” of the Chinese economy (although the print was at a low). We continue to…