MORNING BRIEFING:  USD seen stabilizing, investors eye employment report later today

What’s new:
Asia: Major equity indices still trading positively on the back of US QE
US Dollar: seen stabilizing this morning, investors eye US employment data later
GBP: Eases some of yesterday’s support against Euro and USD
Japan: BoJ makes no changes in its policy rate and announces no additional easing

Today:



Rates in Asia and Indices:
EURUSD: 1.4249 - 1.4178.
USDCHF: 0.9602 – 0.9555.
GBPUSD: 1.6295- 1.6182.
EURJPY: 115.05 – 114.55.
USDJPY: 81.00 – 80.63.
DowJones: 11’434.84 +1.96%
NASDAQ:  2’577.34 +1.46%
S & P 500: 1’221.06 +1.93%
Nikkei: 9’625.99 +2.86%
Shanghai: 3129.50 +1.38%
Gold: $ 1'384.2
Crude Oil: $ 86.83

Comments:

Asian indices still trading positively this morning, as markets enjoy the renewed confidence triggered by the Fed’s plan to boost the US economy by engaging in additional QE. Even European indices are pointing towards a positive open today.

USD was seen stabilizing even though it remained weak. EUR/USD hit highs of around 1.4280 yesterday, and today’s highs were at around the 1.4250 level. Euro zone peripheral spreads remain elevated and this could cap Euro strength.

With the Fed saying that it would regularly review the pace of its securities purchase program in the light of incoming information, more focus will be given to incoming data from the US. Today a major economic release for US employment is highly awaited, as analysts are expecting positive figures for changes in nonfarm payrolls & private payrolls - even though the unemployment rate is widely expected to remain at 9.6%.

The GBP was seen reversing some of the gains it made yesterday – when seen against the Euro and the USD.  After yesterday’s conclusion of the BoE monetary policy meeting showed that investor’s fears with regards to additional QE from the UK seemed unfounded.

The BoJ voted to make no changes in its policy rate and announced no additional easing measures. The BoJ also revealed some more details on its previously planned asset purchase facility. Last month the BoJ had pledged to aid economic recovery via an asset purchasing scheme amounting to 5 trillion yen – plan that should be started at the beginning of next week.


Good day,


Rudolf Muscat
Trading desk

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