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EUR/JPY challenges lows around 134.50
FXStreet (Edinburgh) - The Japanese yen remains well bid at the beginning of the week, taking EUR/JPY to the area of session lows near 134.55/50.
EUR/JPY supported around 134.00
The pair keeps the bearish tone for the second consecutive session so far albeit rebounding from yesterday’s troughs in the 134.00 neighbourhood. The global sentiment remains tilted to the risk-off trade so far, sustaining the bid tone around the safe haven JPY while underpinning the drop from September tops beyond the 137.00 handle.
Next on tap data wise for the pair will be EMU’s Economic Sentiment and Consumer Confidence, preceding the German flash CPI for the current month. Back to Japan, Retail Trade and Industrial Production figures are due tomorrow.
EUR/JPY relevant levels
As of writing the cross is retreating 0.20% at 134.55 and a break below 133.94 (low Sep.28) would expose 133.16 (low Sep.23) and finally 132.76 (low Sep.7). On the other hand, the initial hurdle lines up at 134.91 (high Sep.28) followed by 135.39 (high Sep.25) and then 136.14 (high Sep.21).
Sep 29,2015
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Rate hike coming in 2015, Fed’s Dudley and Williams - Deutsche Bank
FXStreet (Delhi) – Research Team at Deutsche Bank, note that the two Fed officials pointed towards 2015 lift-off in their speeches yesterday while Chicago Fed President Evans said that mid-2016 will be appropriate timing for the rate hike cycle to begin.
Key Quotes
“Although noting that his expectation on timing was ‘not calendar guidance’ and instead ‘depends on the data’, the NY Fed President said that ‘my expectation is that we probably will raise interest rates later this year’, citing confidence that the inflation target will be hit sometime next year.”
“This was followed by a much more dovish tone from Chicago Fed President Evans who said that while the Fed is getting closer to liftoff, still noted that he has mid-2016 in his projections. In particular Evans noted that in his view it will be around that time that ‘the headwinds from lower energy prices and the stronger dollar dissipate enough so that we begin to see some sustained upward movement in core inflation’.”
“Meanwhile and speaking after markets closed, San Francisco Fed President Williams reiterated his call for liftoff sometime this year, although noted risks to this from dollar appreciation and stuttering growth abroad.”
Sep 29,2015
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United Kingdom M4 Money Supply (MoM) came in at -0.4%, below expectations (0.7%) in August
FXStreet.com (Barcelona) For more information, read our latest forex news.
Sep 29,2015
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Treasuries aren’t buying what Yellen is saying on inflation
FXStreet (Mumbai) - The action in the treasury markets in the US indicates the bond traders do not believe what is being told to them about the inflation trajectory by the US Fed officials.
Last week, Yellen the Fed expects inflation to gradually rise back near 2%. Williams said on Monday he expects the Fed to increase rates this year. New York Fed President William C. Dudley said the central bank will probably act in 2015 and move rates higher gradually thereafter.
However, the treasures signal inflation expectations in the US are tumbling, with long- and short-term market forecasts for price gains down to their lowest levels since 2009.
Break even rate at lowest in 6 years
The difference between yields on five-year notes and similar-maturity Treasury Inflation Protected Securities (TIPS) , a gauge of expectations for consumer prices, fell below 1 percentage point Monday.
Moreover, the TIPS clearly shows the inflation expectations are moving in line with the drop in the commodity and stock prices.
Sep 29,2015
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EUR/USD drops as stocks turn positive
FXStreet (Mumbai) - The EUR/USD pair fell into losses after the European stock markets recovered losses to trade higher ahead of the preliminary German CPI report.
Drops below hourly 200-MA
The spot now trades below its hourly 200-MA currently located at 1.1232 levels. The demand for the safe havens like JPY and funding currencies like EUR weakened after the major stock markets in Europe recovered losses to trade in the positive territory.
The focus now would be on the German CPI report, which is expected to show the cost of living in Germany dropped in September. Meanwhile, the activity in the EUR/GBP cross and the broader market sentiment could continue to influence the pair.
EUR/USD Technical Levels
At 1.1220, the immediate support is seen at 1.12 levels, under which the losses could be extended to 1.1146 (Sep 28 low). On the other side, resistance is seen at 1.1232 (hourly 200-MA) and 1.13 levels.
Sep 29,2015
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European Monetary Union Business Climate above expectations (0.2) in September: Actual (0.34)
FXStreet.com (Barcelona) For more information, read our latest forex news.
Sep 29,2015
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European stocks attempt a tepid-recovery, Glencore rebounds +11%
FXStreet (Mumbai) - Stocks on the European bourses halted its recent downslide and pose a modest recovery as rebounding mining stocks continue to boost regional indices. However, the gains are likely to remain capped as persisting negative global sentiment and Asian equities sell-off continue to weigh on investors’ sentiment.
Glencore, VW stocks remain in the spotlight
The shares of the mining giant, Glencore, rebounded nearly 10% on Tuesday after falling to record lows on Monday after Investec raised concerns over the company’s piling debt amid plunging commodity prices. However, rallying Glencore prices failed to lift the FTSE, with the London’s benchmark still struggling in the red, down -0.24% at 5,942.
While the German DAX received fresh impetus from rebounding auto stocks, although Volkswagen traded lower. Among the other indices, the French CAC 40 index gains 0.15% to 4,362, while the pan-European Euro Stoxx 50 index trades higher by 0.25% at 3,047.
Sep 29,2015
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IMF: Inching closer to include renminbi in SDR basket – MUFG
FXStreet (Delhi) – Lee Hardman, Currency Strategist at MUFG, notes that the FT has reported today that the IMF is creeping closer to including the renminbi in their Special Drawing Rights basket as the US and other major shareholders are likely to back the move unless the IMF staff’ makes a surprise recommendation against the renminbi’s inclusion.
Key Quotes
“The remaining technical hurdles are reportedly concerns over China’s heavy-handed intervention in markets and poor communication of reforms which are causing nervousness at the IMF.”
“The caution has reportedly prompted some IMF staff to raise the possibility that the vote by the fund’s board could be delayed from November into early next year to give China more time to deliver reforms and build credibility.”
“However, a potential delayed decision would raise questions over whether China is receiving special treatment. Chinese President Xi Jinping reassured US officials last week that there is no basis for the renminbi to have a devaluation in the long run and thanked the US for their conditional support for China’s bid to have it included in the SDR basket.”
Sep 29,2015
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CNY and CNH gap is shrinking – BBH
FXStreet (Delhi) – Research Team at BBH, note that in the overnight session, the CNH once again outperformed the CNY and is closing the gap that opened between the two currencies since the August devaluation.
Key Quotes
“Now the two currencies are trading roughly at 6.3650 against the dollar. This is important for the functioning of the onshore/offshore markets, for hedging, as well as for meeting the IMF’s easily accessible criteria for joining the SDR.”
“In addition, the CNH interbank offer rate spiked to a record (since the fixing began in 2013) 8.73%, while short-dated hibor rates rose by as much as 200 bp. One interpretation for this spike is to see it as a consequence of the USD/CNH selling. Unlike the onshore market, the PBOC can’t replenish the immediate shortage of CNH. So unless the HKMA steps in with repos, we can get a spike in rates.”
Sep 29,2015
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Austria Producer Price Index (YoY) down to -1.5% in August from previous -1.1%
FXStreet.com (Barcelona) For more information, read our latest forex news.
Sep 30,2015
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