Market Session Recaps
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New York Session
Mon, Sep 15 2008, 23:52 GMT
by Forex.com Research Desk
The buck was sold in the NY session as the combination of a stock market rout coupled with heavy buying in US bonds outweighed the positive of plunging oil prices. US equities fell -4.7% in broad terms, with the declines led by a -10.4% dip in financials and a -6.9% loss in energy stocks. The Dow Jones plunged a whopping -505 points on the day to below 11,000 while the S&P 500 slipped a staggering -59 points and was sitting below 1,200 at the close. US 2-year Treasury yields fell nearly -50 basis points to 1.71% on the day, in the sharpest decline since the aftermath of the 9/11 terrorist attacks. Oil was the bright spot, plummeting more than -$7 towards a close just above the $94/bbl mark.
EUR/USD was about 60 pips higher in the session towards a close near the 1.4240 mark. USD/JPY shed nearly -70 pips on the poor equity performance into a close near the 104.60/70 zone. EUR/JPY fell a less noteworthy -30 pips in NY trading and was sitting near 149.10 at the close, as Euro buying against the buck helped limit the losses in this pair.
The Fed rate decisions looms large tomorrow with market participants pricing in nearly 80% odds that the Fed will reduce the funds rate by -25 basis points to the 1.75% level. While the real risk remains relatively low that the Fed will act, traders should be nimble and anticipate that such a move would be very USD negative initially. The FOMC is likely to harp on weakening employment and continued tight credit markets tomorrow in their statement. On inflation they are expected to tone down their rhetoric as the main source of pressure -- oil prices -- have come off the boil in a big way. If the Fed acts and cuts rates by -25 bps this should see the buck sharply lower, through EUR/USD 1.4500 and USD/JPY 103.50 likely. See our FOMC preview note for full details.
Upcoming Economic Data Releases (Asia Session):
- 9/16/2008 1:30 GMT AU Reserve Bank's Board September Minutes
- 9/16/2008 4:00 GMT JN Tokyo Condominium Sales (YoY) AUG - - -44.50%
- 9/16/2008 4:00 GMT JN BoJ Monetary Policy Meeting
- 9/16/2008 5:00 GMT JN Consumer Confidence Households AUG 31.5 31.4
Published on Mon, Sep 15 2008, 23:53 GMT
Archive
- London Session
Published On Fri, Jul 3 2009, 10:13 GMT - Asia Session
Published On Fri, Jul 3 2009, 06:11 GMT - New York Session
Published On Thu, Jul 2 2009, 22:09 GMT - London Session
Published On Thu, Jul 2 2009, 10:55 GMT - Asia Session
Published On Thu, Jul 2 2009, 07:05 GMT
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