Cash is king?

<p>The US jobs report has been cancelled today, falling victim to the US government shut down with there being no compromise seen as yet. I […]</p>

The US jobs report has been cancelled today, falling victim to the US government shut down with there being no compromise seen as yet. I suspect as the week draws to a close that the calm nature with which the markets have reacted to this potential US default may be about to end as I latch onto two pieces of news released yesterday. Firstly President Obama told Wall Street to be ‘concerned’ re the shutdown which I initially interpreted as him looking for a market crash to force a resolution but I read this morning that US banks are having to stock up their ATMs as investors are dumping Treasury bills and equities as the threat that Washington defaults on their debt is mounting.

With no non-farm payrolls report today the market will focus this morning on the BoJ’s press conference where the market will be looking for Finance Minister Kuroda to suggest that the Japanese Central Bank is considering further stimulus measures following the sales tax increase in April. This afternoon there are a number of Fed members scheduled to speak: Fisher, Dudley, Stein, Lacker and Kocherlakota but with some now suggesting that if the US shutdown and debt ceiling raise isn’t resolved soon then the debate will be over, replaced with by how much the Fed asset purchases will increase.

 


EUR/USD

Supports 1.3570-1.3505-1.3455  | Resistance 1.3650-1.3710-1.3800

 


USD/JPY

Supports 96.85-96.60-95.00  | Resistance 99.45-97.90-98.30

 


GBP/USD

Supports 1.6100-1.6065-1.5960  | Resistance 1.6200-1.6310-1.6390

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