Cable reaches fresh lows ahead of Carney speech
City Index September 9, 2014 2:30 PM
<p>The FX markets enjoyed another volatile session as the dollar continues to trade with a bid tone despite the disappointing non-farm payrolls data last week. US […]</p>
The FX markets enjoyed another volatile session as the dollar continues to trade with a bid tone despite the disappointing non-farm payrolls data last week. US yields moved higher following a research paper released by the San Francisco Federal Reserve which was titled ‘Assessing Expectations of Monetary Policy’ where, based on surveys, they suggested that the public seems to expect a more accommodative policy than the Federal Open Market Committee participants. US 10-year treasury yields opened at 2.48%, rallying to a high of 2.4999%.
USD/JPY now looks comfortable on the 106 handle as the BoJ minutes continued to echo the policy of easing measures to achieve the 2% inflation goal. PM Shinzo Abe’s senior advisor Honda suggested that there should be a delay in further sale tax hikes, indicating that the BoJ will implement fresh easing measures.
AUD came under pressure in the Asian session as the NAB business confidence survey fell two points to eight, from the expected 10 as mortgage data disappointed at just 0.3%.
Cable pushed to fresh lows below 1.6100 as once again the Scottish referendum dominated proceedings. The latest poll continued the momentum for the ‘yes’ campaign as the TNS-BMRM poll, which is bigger than the YouGov poll, revealed a 50-50 outcome for independence. My own personal view is that whilst bookmakers make the no vote as odds on favourite then this media circus around the polls really has little credibility. Although there are reports this morning that MPs have warned PM David Cameron that his future as leader depends on the outcome, with suggestions that he has asked the Queen to publicly address the need for the Union to remain.
UK industrial production and manufacturing output data will be the highlight releases today as BoE Governor Mark Carney will address the Trade Union Congress in Liverpool at 11.30am. The US market will look to the Jolts job openings this afternoon.
Supports 1.2870-1.2840-1.2785 | Resistance 1.2920-1.2970-1.3000
Supports 105.75-105.20-104.70 | Resistance 106.55-107.00-108.00
Supports 1.6060-1.6000-1.5855 | Resistance 1.6125-1.6150-1.6190
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