EU PMI the focus as Fed minutes boost the USD
City Index February 21, 2013 1:40 PM
<p>The USD has seen broad gains following the FOMC minutes as equity markets are a sea of red this morning and markets eye the potential […]</p>
The USD has seen broad gains following the FOMC minutes as equity markets are a sea of red this morning and markets eye the potential that the Federal Reserve will slowly start withdrawing its easy money policy. The head line that seems to have really got the ball rolling was “several members emphasised that the Committee should be prepared to vary the pace of asset purchases, either in response to changes in the economic outlook or as its evaluation of the efficiency and costs of such purchases evolved.”
The sour tone wasn’t helped with signs that the PBOC are to withdraw liquidity from money market operations with analyst thinking this could be the first step in China’s attempt to stem rising house prices.
The pound has been the biggest loser over the past 24 hours falling to levels not seen since July 2010. Looking at both sets of central bank minutes there is clear divergence between them as the BOE showed that one third of the MPC had voted for an extension to the QE programme and raised the bar for further gilt purchases with this view including current Governor King.
Today’s data will be all about the European flash PMI reports that we know ECB president Draghi likes as to use as recent economic performance for the EU. In the US the Philly Fed manufacturing index will be released along with existing homes sales, CPI, manufacturing PMI and the latest weekly jobless claims reading.
Supports 1.3220-1.3160-1.3080 | Resistance 1.3320-1.3400-1.3500
Supports 93.20-92.80-91.40 | Resistance 94.30-95.00-96.20
Supports 1.5125-1.5080-1.5000 | Resistance 1.5230-1.5280-1.5340
StoneX Financial Ltd (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.