Holding pattern ahead of German elections
City Index September 20, 2013 3:06 PM
<p>The FX markets have been extremely quiet in Asia following the dollar’s demise thanks to the FED’s ‘no taper’ shock, although I note the general […]</p>
The FX markets have been extremely quiet in Asia following the dollar’s demise thanks to the FED’s ‘no taper’ shock, although I note the general risk sentiment still feels supported as the JPY trades heavily following the usual ‘Gotobi day fix’ supply of JPY.
Sterling has underperformed against the euro and the dollar as the summer feel good factor for UK data looks to be over. The latest retail sales report disappointed the sterling bulls with the food component leading the decline, although positioning may have a lot to do with the move as longs look to take profits ahead of technical resistance seen at 1.6300.
There has been more rumours and media reports out overnight on how the Japanese Government intend to counter the impending sales tax hike. The latest stimulus rumour comes in the form of a corporate tax cut but the markets seem to be getting bored with speculation as an official announcement isn’t expected until early October following the release of the Tankan report.
US data was strong yesterday with robust readings in homes sales and a drop in weekly jobless claims, although there still seems to be a technical issue as the same two states from last week failed again to report their data. The above consensus US readings was sealed when the Philadelphia Fed Survey gave the highest reading since 2011 led by the employment component. However the market reaction was muted with the general feeling being that we will need a lot more evidence before the taper debate can gain any momentum.
There are few data highlights today with UK public spending numbers this morning followed by the EU consumer confidence reading this afternoon. The market is likely to be cautious going into the week-end as Germany go to the polls, although the only question seems to be who Angela Merkel’s CDU party will be in coalition with?
Supports 1.3500-1.3475-1.3450 | Resistance 1.3580-1.3630-1.3715
Supports 99.00-98.80-98.50 | Resistance 99.80-100.00-100.30
Supports 1.6025-1.6000-1.5965 | Resistance 1.6115-1.6160-1.6225
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