Market Review - 21/10/2014 22:58GMT
Euro tumbles on report ECB is mulling corporate bond purchase
The single currency fell sharply against the dollar from 1.2840 to 1.2715 on Tuesday after Reuters reported the European Central Bank was looking at buying corporate bonds as soon as December. Reuters quoted sources by saying 'ECB considering buying corporate bonds; ECB work on buying corporate bonds already well under way but numerous details undecided; ECB Governing council could discuss corporate bond buys as soon as Dec and may decide to go ahead; ECB could then begin corporate bond purchases in Q1 2015.'
German FinMin Wolfgang Schaeuble said 'higher public debt and global liquidity would set the stage for new asset price bubbles; there is a glut of liquidity globally.'
Although the Japanese yen rose to 106.25 versus U.S. currency on risk aversion due to the selloff in the Nikkei-225 index which reversed Monday's strong rally and fell 306 points or 2.06%, U.S. dollar rebounded broadly and rebounded to 106.92 near New York close due to the rally in European and U.S. stock markets. On the data front, U.S. existing home sales m/m and change m/m came in better-than-expected at 5.17 millions and 2.4% versus forecasts of 5.10 millions and 1.0% respectively. Dow Jones index closed up 215 points or 1.31% to 16615.
Bank of Japan governor Kuroda said Japaness yen has been bought recently due to risk aversion and worries about global economy; BOJ will continue to monitor how financial market moves impact Japan's economy and prices.
Despite cable's resumption of upmove from last Wednesday's fresh 11-month trough at 1.5875 to 1.6186 initially, the British pound ratcheted lower in tandem with euro in Europe and cable later dropped to 1.6114 near New York close due to dollar's broad-based strength.
In other news, SNB Board member Zurbruegg said 'current interest rates are appropriate for price stability point of view; SNB will defend franc cap with unlimited purchases of foreign currency and take further measures immediately if needed; seeing some positive signs of slowing down in housing market but still at a high level.'
Wednesday will see the release of Japan imports, exports and trade balance, Australia inflation, BoE minutes, UK BoE MPC vote, Canada retail sales, BoC rate decision, U.S. weekly earnings and CPI.
Euro tumbles on report ECB is mulling corporate bond purchase
The single currency fell sharply against the dollar from 1.2840 to 1.2715 on Tuesday after Reuters reported the European Central Bank was looking at buying corporate bonds as soon as December. Reuters quoted sources by saying 'ECB considering buying corporate bonds; ECB work on buying corporate bonds already well under way but numerous details undecided; ECB Governing council could discuss corporate bond buys as soon as Dec and may decide to go ahead; ECB could then begin corporate bond purchases in Q1 2015.'
German FinMin Wolfgang Schaeuble said 'higher public debt and global liquidity would set the stage for new asset price bubbles; there is a glut of liquidity globally.'
Although the Japanese yen rose to 106.25 versus U.S. currency on risk aversion due to the selloff in the Nikkei-225 index which reversed Monday's strong rally and fell 306 points or 2.06%, U.S. dollar rebounded broadly and rebounded to 106.92 near New York close due to the rally in European and U.S. stock markets. On the data front, U.S. existing home sales m/m and change m/m came in better-than-expected at 5.17 millions and 2.4% versus forecasts of 5.10 millions and 1.0% respectively. Dow Jones index closed up 215 points or 1.31% to 16615.
Bank of Japan governor Kuroda said Japaness yen has been bought recently due to risk aversion and worries about global economy; BOJ will continue to monitor how financial market moves impact Japan's economy and prices.
Despite cable's resumption of upmove from last Wednesday's fresh 11-month trough at 1.5875 to 1.6186 initially, the British pound ratcheted lower in tandem with euro in Europe and cable later dropped to 1.6114 near New York close due to dollar's broad-based strength.
In other news, SNB Board member Zurbruegg said 'current interest rates are appropriate for price stability point of view; SNB will defend franc cap with unlimited purchases of foreign currency and take further measures immediately if needed; seeing some positive signs of slowing down in housing market but still at a high level.'
Wednesday will see the release of Japan imports, exports and trade balance, Australia inflation, BoE minutes, UK BoE MPC vote, Canada retail sales, BoC rate decision, U.S. weekly earnings and CPI.
Recommended Content
Editors’ Picks
EUR/USD regains traction, recovers above 1.0700
EUR/USD regained its traction and turned positive on the day above 1.0700 in the American session. The US Dollar struggles to preserve its strength after the data from the US showed that the economy grew at a softer pace than expected in Q1.
GBP/USD returns to 1.2500 area in volatile session
GBP/USD reversed its direction and recovered to 1.2500 after falling to the 1.2450 area earlier in the day. Although markets remain risk-averse, the US Dollar struggles to find demand following the disappointing GDP data.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
After the US close, it’s the Tokyo CPI
After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.