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Waiting on the BoE and ECB

FxGates — Thu, 23 Feb 2012 00:00:57 +0000

Yesterday, FX traders spent much of the day waiting for news from Greece and today looks to be much the same. But while we wait, the general mood is risk-on. The equities continues to edge higher and US bond yields have reacted with a bearish run to the short term range highs. It’s clear by EURUSD price action that traders are scared of going short ahead of any Greek headline or today’s ECB rate…

Troika Deadline Looms

FxGates — Thu, 23 Feb 2012 00:00:17 +0000

The global risky rally sustained its earlier gains in Asian session and continued to push higher. Rejuvenated confidence on a the ability of Greece to secure the Troika second bailout package buoyed risk sentiment yesterday, pushing equities higher and pushed Treasury prices and USD lower. EURUSD climbed to 1.3287 from 1.3100 yesterday while AUDUSD jumped to 1.0844. Asian equities kept the…

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…