Keep an eye out for US consumer confidence data. Risk looks stronger as Europe looks for a plan
City Index September 27, 2011 3:34 PM
<p>GBP/USD Range: 1.5533 – 1.5594 Support:1.5350 Resistance: 1.5700 Sterling continues to enjoy a slightly positive risk session despite continuous comments from MPC members that […]</p>
If all the rumours and reports that we’ve been hearing over the last 48 hour are true, then the EFSF will be leveraged up and the EU will fund the debt ridden European banks via the European Investment Bank issuing bonds via a SPV that would buy European sovereign debt. Initial speculations suggest that the leveraged increase to the EFSF could be as much as 8 times. There is scepticism to the German resistance to more capital and leverage on bonds, given Merkel’s determination to solidify the euro though undoubtedly the political backing for this plan will likely influence her thirst for euro support.
The JPY market continues to trade in tight ranges, with movements dominated by risk on/off trade in the JPY crosses. Yet again overnight we have seen comments from Japanese authorities that measures will be implemented to curb the strong JPY but again the market seems to be uninterested until we see any action. With settlements at the end of the month coming closer for Japanese exporters and the break-even rate used to calculate profits being 79.40, the market will test the BoJ’s resolve on the JPY appreciation as the deadline date draws closer and closer.
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.