MORNING BRIEFING: US Dollar inches closer to 1995 low versus yen

What’s new:
Forex: Dollar approaches record low versus yen
Global Markets: Stocks lower led by Japan’s sluggish consumer electronics demand
Japan: Weak output, price and spending figures
Euro zone: EU leaders agree on creating a mechanism for crisis resolution
United States: Clinton says US is not seeking to ‘contain’ China
United States: GDP and PCE figures due today at 14:30 CET

Today:


Asian Rates & Indices:
EURUSD: 1.3951 - 1.3862
USDCHF: 0.9873 – 0.9828
GBPUSD: 1.5966 - 1.5909
EURJPY: 112.98 – 111.81
USDJPY: 81.07 – 80.53
DowJones: 11'113.95 -0.11%
NASDAQ: 2'507.37 +0.16%
S & P 500: 1'183.78 +0.11%
Nikkei: 9‘202.45 -1.75%
Shanghai: 2’973.11 -0.65%
Gold: $ 1'342.60
Crude Oil: $ 81.72

Comments:
    
The US Dollar snapped a two-day rally yesterday, inching closer to a 15-year low versus the yen and pushing the euro back up towards the upper band of the recently established range from 1.3700 – 1.4050, while driving US Treasury yields down. The move came on the back of a survey of dealers and investors, conducted by the New York Fed, which shows scenarios of the Fed spending as much as $1 trillion in its second bout of Quantitive Easing.

Investors seemed to shrug off a surprisingly good weekly jobless claims figure of 434k as they placed new bets on Fed easing, also due to the fact that the Labor Department said the drop was tied to seasonal adjustment flaws surrounding the Columbus Day holiday. There is plenty of data ahead for the US including the Q3 GDP advance estimate, Chicago PMI and the University of Michigan confidence index.

Asian stocks fell on Friday, led by weak price, output and consumer spending figures. Reduced consumer demand put electronics makers such as Sharp and Samsung under fire which weighed heavily on the Nikkei. Investors seem to be finding fewer reasons to hold on to equities until the outcome of the Fed meeting next week.

The main market focus therefore remains the FOMC meeting next week, with US growth data due today potentially feeding into the debate over how big Fed asset-buying should be this time around.

Good Weekend,

Emman Xuereb
Trading Desk
RTFX Ltd
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