Back
3 Oct 2013
Session Recap: EUR trips stops 1.36+, US shutdown remains
FXstreet.com (Barcelona) - A fairly entertaining Asian session since the open of the Tokyo market, with the Yen initially displaying a combatant performance on a lower Nikkei, yet that mirage lasted roughly 1h, time in which a change in sentiment towards the Japanese index, coupled with positive data in China, supported rises in G10 currencies vs JPY and USD.
The most important developments throughout the Asian session were stops being tripped above 1.36 in EUR/USD, AUD/USD strengthening on the back of upbeat Chinese non-manufacturing PMI and higher AiG Performance of Services Index (Sep), which saw resistance at 0.94/9410 being tested.
There is chatter in the market about a transitional momentary shift in the RBA, which seems to suggests the RBA is moving firmly away from its perma dovish stance towards a more neutral one.
As stated by Greg Gibbs, Strategist at RBS: "House prices in Australia are rising more sharply, confidence surveys are improved, the global PMI is at a 27 month high, the Fed has backed off the taper and the new Australian government is swinging from fiscal conservative in opposition to infrastructure builders in government, which leads to an RBA firmly on hold and the next move in rates, albeit months away, may be up not down."
Meanwhile, NZD/USD was strongly bid around the NY close after hawkish comments from RBNZ Wheeler, who in a rare off the cuff article published on Wednesday specified quantity and timeframe for rate hikes to be implemented in New Zealand.
From Mr. Wheeler: "We currently expect that the official cash rate could increase by 2 percent from 2014 to the beginning of 2016. This could result in interest rates on first mortgages of 7-8 percent. If the loan-to-value speed limit is unable to slow house price inflation, larger increases in the official cash rate would be required."
In the US, the political gridlock between Republicans and Democrats remains, with no party showing any willingness to make progress at all. Obama saying he refuses to negotiate, while Republican Boehner said talks with Obama were not productive.
Main headlines in Asia
RBNZ warns rates in New Zealand heading much higher
Sell EUR/USD at 1.3585, stop at 1.3720 - Societe Generale
Australia AiG Performance of Services Index rises to 47.1 in September from 39
No progress on US shutdown negotiations
China September Non-manufacturing PMI up to 55.4 vs 53.9
Upside risks on AUD/USD - RBS
The most important developments throughout the Asian session were stops being tripped above 1.36 in EUR/USD, AUD/USD strengthening on the back of upbeat Chinese non-manufacturing PMI and higher AiG Performance of Services Index (Sep), which saw resistance at 0.94/9410 being tested.
There is chatter in the market about a transitional momentary shift in the RBA, which seems to suggests the RBA is moving firmly away from its perma dovish stance towards a more neutral one.
As stated by Greg Gibbs, Strategist at RBS: "House prices in Australia are rising more sharply, confidence surveys are improved, the global PMI is at a 27 month high, the Fed has backed off the taper and the new Australian government is swinging from fiscal conservative in opposition to infrastructure builders in government, which leads to an RBA firmly on hold and the next move in rates, albeit months away, may be up not down."
Meanwhile, NZD/USD was strongly bid around the NY close after hawkish comments from RBNZ Wheeler, who in a rare off the cuff article published on Wednesday specified quantity and timeframe for rate hikes to be implemented in New Zealand.
From Mr. Wheeler: "We currently expect that the official cash rate could increase by 2 percent from 2014 to the beginning of 2016. This could result in interest rates on first mortgages of 7-8 percent. If the loan-to-value speed limit is unable to slow house price inflation, larger increases in the official cash rate would be required."
In the US, the political gridlock between Republicans and Democrats remains, with no party showing any willingness to make progress at all. Obama saying he refuses to negotiate, while Republican Boehner said talks with Obama were not productive.
Main headlines in Asia
RBNZ warns rates in New Zealand heading much higher
Sell EUR/USD at 1.3585, stop at 1.3720 - Societe Generale
Australia AiG Performance of Services Index rises to 47.1 in September from 39
No progress on US shutdown negotiations
China September Non-manufacturing PMI up to 55.4 vs 53.9
Upside risks on AUD/USD - RBS