In an otherwise rather quiet trading session, the SNB surprised markets by cutting rates 100 bps to 1% as London trading was coming to a close. This led to a bit of a pop in the risk trades as more proactive rate cuts continue to instill confidence that ''something'' is being done. European bourses popped about 2% on the surprise cut and pared overnight losses in half. This also led to higher risk trades in FX on the follow.
EUR/USD ended up pushing about 40 points higher in the session and was sitting near 1.2540/50 as NY opened. The 1.2600 area looks to be the trigger for further upside here. JPY crosses were also higher on the better bid global equities. USD/JPY was about 50 points higher in London trading and was near 95.80 while EUR/JPY popped about 100 pips towards the 120.15/20 zone.
Risk is likely to remain the theme in NY as well and poor US economic data out this morning has the potential to see stocks revert back to the lows. Initial jobless claims are due up at 0830ET and are forecast to come in at 505K after a jump to 516K the prior week. Then we have the Philly Fed manufacturing index at 1000ET and this is expected to print a paltry -35 after a -38 read previously. Current trends suggest the risk is that we get worse than expected results on both fronts. This should see JPY crosses and EUR retest intraday lows.
Upcoming Economic Data Releases (NY Session) Prior Estimate
- 11/20/2008 13:30 GMT CA Wholesale Sales MoM SEP -1.50% -0.60%
- 11/20/2008 13:30 GMT US Initial Jobless Claims 15-Nov 516K 505K
- 11/20/2008 13:30 GMT US Continuing Claims 8-Nov 3897K 3900K
- 11/20/2008 14:30 GMT GE ECB's Weber Participates in a Panel
- 11/20/2008 15:00 GMT US Philadelphia Fed. NOV -37.5 -35.0
- 11/20/2008 15:00 GMT US Leading Indicators OCT 0.30% -0.60%
- 11/20/2008 15:30 GMT CA Bank of Canada Releases Review
- 11/20/2008 15:30 GMT US EIA Natural Gas Storage Change 14-Nov 46 -5
