News Headline Summary
Combination of position squaring ahead of the FOMC minutes release, as well as consequent rate differential flows which saw USD/JPY come under pressure, continues to support demand for core EU fixed income paper, with peripheral spreads wider as a result
- Concerns over the looming decision by Japanese government over planned sales tax rise also added to the cautious sentiment which prevailed overnight in Asia, where the Nikkei 225 index closed lower by over 2%.
- Of note, Japan LDP tax panel's Noda said the sales tax rise is inevitable. Of note this morning, Japan PM adviser Honda said that an extra spending needed if sales tax raised in April as sales tax hike could otherwise deal major blow to recovery.
- Higher spending in turn may pose another problem for both the BoJ and Abe, who not so long ago reiterated its pledge to adhere to halve its primary deficit by FY 2015.
- With JPY firmer across the board and USD also down as a result meant that risk averse flows supported CHF, with EUR/CHF tripping stops through 1.2300 to the downside earlier on in the session.
- Weaker USD ensured that in spite of the cautious sentiment, EUR/USD and GBP/USD traded higher as a result.
08:19, 20 Aug 2013 -
07:49, 21 Aug 2013
Even though USTs are trading little changed, USD index is seen up 0.25%, with EM currencies such as INR/TRY/ZAR under pressure as market participants continue to speculate over potential surge in capital outflows should the Fed indeed begin to taper QE...
07:36, 21 Aug 2013
Stocks in Europe seen somewhat mixed, with the FTSE-100 index under performing amid a number of blue-chips going ex-div today...
14:58, 20 Aug 2013
Even though US yields have backed of recent highs today, EM currencies remain under pressure as traders continue to speculate whether or not higher rates will lead to a rise in outflows, with some suggesting that this could even spillover into Europe...
12:56, 20 Aug 2013
PREVIEW: FOMC Minutes - 21st August 2013: VIDEO NOW AVAILABLE IN THE VIDEO SECTION
10:19, 20 Aug 2013
EU MID-SESSION UPDATE – 20/08/13: Position squaring ahead of the FOMC minutes release saw USTs edge higher throughout the session, with stocks under pressure as a result…
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