FOMC hint at more QE with the ECB rate decision today
City Index May 2, 2013 1:57 PM
<p>Asia and Europe return from the May day holidays with the market likely to range trade ahead of the all important ECB decision today. Personally […]</p>
Asia and Europe return from the May day holidays with the market likely to range trade ahead of the all important ECB decision today. Personally I feel a 25 basis point cut is priced into the single currency, with the focus likely to be on growth in the press conference and how they intend to get the European banks lending again but as the BoE have found this is not an easy task, with the funding for lending scheme that was introduced last year in the UK hardly inspiring the economy! The euro feels overvalued to me with resistance seen at 1.3310 but I have been thinking that since 1.2750!
The Fed reminded the markets last night that more QE from that US can’t be ruled out if the outlook on the labour market and inflation expectations deteriorate further. The Fed’s revised statement said it is “prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labour market or inflation changes.”
In other news the HSBC manufacturing PMI data from China came in a touch below expectations of 50.5 at 50.4 with Australian building approvals fuelling expectations of a RBA rate cut in five days time, with the month-on-month number coming in at -5.5% versus a consensus expectation of a 1% rise.
Supports 1.3120-1.3050-1.2980 | Resistance 1.3250-1.3310-1.3400
Supports 9700-96.30-95.80 | Resistance 98.15-98.80-99.30
Supports 1.5520-1.5470-1.5410 | Resistance 1.5610-1.5690-1.5750
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