Market Review - 28/10/2014 22:42GMT
Euro rebounds on short-covernig ahead of FOMC rate decision
Despite euro's brief rise to 1.2765 on Tuesday after the release of weaker-than-expected U.S. durable goods data, the single currency subsequently retreated to 1.2721 on the robust U.S. consumer confidence together with profit-taking ahead of FOMC rate decision on Wednesday. U.S. durable goods, durable goods ex-def n durable goods ex-trans. came in much weaker-than-expected at -1.3%, -1.5% and -0.2% versus forecasts of 0.5%, 0.3% and 0.5% respectively. U.S. consumer confidence comes in much better-than-expected at 94.5 versus forecast of 87.0.
An EU source said on Tuesday that the European Commission has given a green light to Italy's modified 2015 budget plan after Rome agreed to implement additional deficit cuts. The source said the Commission would let an Oct. 29 deadline for formally demanding modifications pass, signifying that it had no objections to the revised plans.
U.S. dollar swung wildly on Tuesday due to the release of mixed U.S. economic data. Despite dollar's brief but strg retreat from 108.17 to 107.70 after the release of weaker-than-expected U.S. durable goods, the pair rebounded to 108.14 on robust U.S. consumer confidence and then to 108.17 near NY close.
BoJ said do not see liquidity in JGB market falling considerably; talking specifics about exit strategy now would case confusion in market; QQE targeting price stability, not monetising government debt. BoJ governor Kuroda then added output gap tightening, centering on labour market; exports have disappointed; exports likely to head for moderate recovery as overseas economies recover.
Despite cable's brief retreat from Monday's high at 1.6147 to 1.6089 in Europe on Tuesday, the British pound rallied to as high as 1.6183 after the downbeat U.S. durable goods data before retreating on strong U.S. consumer confidence and dovish comments from Deputy Governor Jon Cunliffe.
Deputy Governor Jon Cunliffe said in a speech to students at the University of Cambridge that the Bank of England can afford to keep interest rates at their current record low for longer than first thought, due to weak pay and inflation and a darker international outlook. Cunliffe said "we've now seen evidence of a slowing in UK growth, and prospects for the global economy have deteriorated." He added "the risk of a surprising pick-up in inflationary pressure may be more manageable than the risk of the expansion stalling and inflation dropping further."
Wednesday will see the release of Japan's industrial output, New Zealand ANZ business outlook, U.K. mortgage approval and mortgage lending, Canada's producer prices, FOMC rate decision and Fed's monetary policy statement.
Euro rebounds on short-covernig ahead of FOMC rate decision
Despite euro's brief rise to 1.2765 on Tuesday after the release of weaker-than-expected U.S. durable goods data, the single currency subsequently retreated to 1.2721 on the robust U.S. consumer confidence together with profit-taking ahead of FOMC rate decision on Wednesday. U.S. durable goods, durable goods ex-def n durable goods ex-trans. came in much weaker-than-expected at -1.3%, -1.5% and -0.2% versus forecasts of 0.5%, 0.3% and 0.5% respectively. U.S. consumer confidence comes in much better-than-expected at 94.5 versus forecast of 87.0.
An EU source said on Tuesday that the European Commission has given a green light to Italy's modified 2015 budget plan after Rome agreed to implement additional deficit cuts. The source said the Commission would let an Oct. 29 deadline for formally demanding modifications pass, signifying that it had no objections to the revised plans.
U.S. dollar swung wildly on Tuesday due to the release of mixed U.S. economic data. Despite dollar's brief but strg retreat from 108.17 to 107.70 after the release of weaker-than-expected U.S. durable goods, the pair rebounded to 108.14 on robust U.S. consumer confidence and then to 108.17 near NY close.
BoJ said do not see liquidity in JGB market falling considerably; talking specifics about exit strategy now would case confusion in market; QQE targeting price stability, not monetising government debt. BoJ governor Kuroda then added output gap tightening, centering on labour market; exports have disappointed; exports likely to head for moderate recovery as overseas economies recover.
Despite cable's brief retreat from Monday's high at 1.6147 to 1.6089 in Europe on Tuesday, the British pound rallied to as high as 1.6183 after the downbeat U.S. durable goods data before retreating on strong U.S. consumer confidence and dovish comments from Deputy Governor Jon Cunliffe.
Deputy Governor Jon Cunliffe said in a speech to students at the University of Cambridge that the Bank of England can afford to keep interest rates at their current record low for longer than first thought, due to weak pay and inflation and a darker international outlook. Cunliffe said "we've now seen evidence of a slowing in UK growth, and prospects for the global economy have deteriorated." He added "the risk of a surprising pick-up in inflationary pressure may be more manageable than the risk of the expansion stalling and inflation dropping further."
Wednesday will see the release of Japan's industrial output, New Zealand ANZ business outlook, U.K. mortgage approval and mortgage lending, Canada's producer prices, FOMC rate decision and Fed's monetary policy statement.
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