AUD slides ahead of Super Mario announcement
City Index November 7, 2013 2:22 PM
<p>AUD is the only standout difference this morning versus other G10 pairs ahead of the ECB and BoE policy meetings today, following a weaker jobs […]</p>
AUD is the only standout difference this morning versus other G10 pairs ahead of the ECB and BoE policy meetings today, following a weaker jobs report from Australia.
The employment change came in at 1.1k versus the expected 10k and the previous 9.1k. Full-time employment change fell to -27.9k versus the previous 5k as the participation rate came in at 64.8% – against the consensus of 64.9% – although I will stress that this has been a volatile reading over 2013. The data saw the AUD drop 50 points but stayed within the recent 0.9450-0.9550 range.
The BoE meeting today is unlikely to provide any policy change, with the focus likely to be on the inflation report next week; leaving the ECB as today’s main event following last week’s dismal inflation number, which triggered market expectations of a rate cut this month.
I think a cut is unlikely today, with ECB President, Mario Draghi, likely to continue with a dovish rhetoric highlighting the fragile nature of the euro area economy whilst further emphasising that rates are likely to remain at or below levels for an extended period of time.
This is a reminder to the markets that the ECB have all the tools available to stimulate the economy; including a further LTRO, while setting the stage for a December rate cut should the incoming data highlight further downside risks to the inflation outlook.
The data highlight this morning is the industrial production reading from Germany, with weekly jobless claims and US preliminary GDP data from across the pond this afternoon ahead of the jobs report tomorrow.
Supports 1.3450-1.3420-1.3385 | Resistance 1.3555-1.3575-1.3600
Supports 98.30-97.80-97.45 | Resistance 98.80-99.00-99.30
Supports 1.6020-1.5985-1.5905 | Resistance 1.6125-1.6205-1.6260
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.