This morning’s UK CPI was sharply higher than forecasts; coming in at a monstrous 0.6% MoM, 2.9% YoY in December, up from last month’s 0.3% MoM, 1.9% YoY rise. Today’s reading comes within a fraction of hitting the 3% threshold where BoE Governor King would be obliged to write a letter to the UK Chancellor of the Exchequer to explain the massive overshoot above the 2% target. GBPUSD has responded…
The start of another week brings with it a fresh spate of sovereign debt concerns, today sparked by an article in the UK’s Telegraph that speculates the ECB is ruminating over the potential legal framework for the possibility of a country leaving the European monetary union. Whether the cited document (entitled: “Withdrawal and expulsion from the EU and EMU: some reflections”) has come about at…
Risk appetite continues to be shaky and markets remain nervous. Asian regional indexes are slightly higher, with European equity markets following. Early participants were abuzz with rumors that German Chancellor Merkel would resign, perhaps driven by a Time piece suggesting she was losing support of coalition partners. However, the rumors were quickly dismissed, with little linger…
The increase in Australian Employment released overnight more than trebled analysts’ estimates (+35.2k vs. 10.0k expected), sending the Unemployment Rate tumbling to 5.5% against consensus forecasts for it to rise to 5.8%. Australia has unquestionably been one of the first out of the blocks in the recovery amongst the G10, a fact that saw AUDUSD appreciate over 27% in 2009 on the expectation of…
The USD was mildly weaker against the majors, with the commodity currency seeing the largest appreciation after yesterday’s fall. While not a complete surprise, China’s 50bp hike in banks reserve ratio put risk on a back footing, highlighting how sensitive market participants are to any tightening. The move is expected to freeze roughly CNY270bn at Chinese banks. Given China’s massive demand for…
This morning’s Swedish CPI came in at a firmer than expected 0.2% MoM, 0.9% YoY, against consensus estimates for 0.1% MoM, 0.7% YoY. Indeed today’s reading brings the annualized headline CPI surging back into positive territory for the first time since April 2009 and seems to confirm suspicions that the Riksbank’s current inflation forecast is incorrect. The steady increase in CPI from Sweden…
Markets seem to have shrugged off the disappointing US non-farm payrolls data, with equity and commodity prices rallying as yields slipped. Friday closed with the S&P up 0.3% and yield curve steepened further, with US 2yrs rates dropping 5bp. Comments from Fed’s Bullard today gave risky assets a boost, as he noted major G10 economies monetary policies were to stay exceptionally loose for some…
It’s a typical Non-Farm Payroll Friday, with most currency traders hitting the pause button ahead of the significant economic release later in the day. Although the median estimate is for a 0k change, the amount of variation between individual forecasts is extremely large; with Bloomberg’s survey of 76 economists producing a range of estimates from -100k to +85k. Not only is the level of…
Japan’s Kan held the first press conference this morning in his new role as Finance Minister; and FX markets were treated to some unexpected JPY commentary that will likely underline the case for further currency weakness in 2010. While it is nothing new that officials from both the BoJ and MoF have been uncomfortable with JPY strength in recent months; the near 10% rally in USDJPY from…
Coming a day after yesterday’s UK debt worries, European markets were given a fresh reminder of the fragile state of Greece’s predicament as Reuters reported comments from ECB’s Stark that the rest of the EU would not save Greece from its fiscal difficulties. These remarks have quickly been followed up by counter comments from Greece’s Finance Minister Papaconstantinou; who strenuously denied…
