After the two-day Fed’s meeting it was decided to leave QE3 unchanged ($85 billion a month). The Committee noted that there is improvement on the labour market, which investors regarded as the beginning of trimming from December, not from March, though the labour situation improved according to the whole level of unemployment, not the data on Nonfarm Payrolls. Consequently, the euro dropped 14 points, the pound sterling lost 7 points, S&P 500 dropped 0.51%, Dow Jones fell 0.39%.
On the whole, the markets reacted on the Fed’s decision moderately and now the major indicator of the investors’ activity will be the stock indices, which will show whether major investors will re-distribute assets to the Treasurys.
Meanwhile, we can rely on the macroeconomic data. At 11:00 UTC+4 data on Retail Sales in Germany in September is published, forecast 0.4%-0.5% vs. -0.2% in August. At 14:00 UTC+4 data on Unemployment Rate in the Eurozone will be issued; the previous reading was 12.0%. At 16:30 UTC+4 US Initial Jobless Claims will be revealed, forecast 341K vs. 350K in the previous week.
We expect that in the near future the mood will be bearish and we expect to see the price in the area 1.3670/80 for the euro and 1.5955/65 for the pound sterling.
USD/JPY.
Yesterday the Japanese yen was more consistent, amid the Fed’s announcement it grew 33 points. Of course it was helped by the background provided by the Bank of Japan, which promised to continue stimulating the economy.
Today at 10:00 UTC+4 the Bank of Japan report on economic outlook and inflation is scheduled. Approximately that time the bank will announce the monetary rate decision.
Taking into account unequal data for the last half of the year, it is difficult to depict the possible market mood, though there will be some difficulties induced by data on Industrial production and consumption will be observed. The Japanese investors have not started to buy massively the US bon ds, the purchase volumes of the foreign securities for the previous week was 1.03 trillion yen vs. 1.41 trillion in the previous week. Today correlation of the yen is possible (98.00).
In the near term when the US Treasury announces new placements of the Treasurys, we expect the growth will resume.
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Performed by Yuriy Zaycev, Analytical expert InstaForex Group © 2007-2013 |
Fundamental review for October 31, 2013
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