Post-rate cut cheer

<p>FX markets trade in a subdued manner in Asia as Japan enjoy a public holiday. The remaining Asian bourses are trading in positive territory following […]</p>

FX markets trade in a subdued manner in Asia as Japan enjoy a public holiday. The remaining Asian bourses are trading in positive territory following the rate cut in China on Friday, which has also seen USD/CNH trade 50 points higher.

Reports over the weekend revealed that US growth over the summer may have peaked, as a US forward looking business confidence indicators fell to +28 from +39 and a fresh five-year low. SNB Governor Jordan again spoke out against the Swiss Gold vote, suggesting a Yes vote would hamper the SNB’s policy making efforts as the referendum approaches this coming Sunday. There has also been negative media speculation with regards to Japanese PM Abe, as a local survey revealed that his popularity has declined further. This has raised concerns that the coalition may lose more than 20 seats in the upcoming election, which would make implementing the third arrow reforms very difficult.

The UK media has highlighted that Pfizer was barred from showing any renewed interest in AstraZeneca for six months following the failed acquisition. They highlight that this period ends on November 27th, suggesting a possible new bid is imminent which would of course have an impact on sterling.

The below shows how short euro positioning increased over the weekend as the latest CFTC data was released.


The data highlight today will be the German IFO survey released at 9am, with this week’s focus likely to be the latest inflation data from Europe at the end of the week.



Supports 1.2355-1.2305-1.2255  | Resistance 1.2460-1.2510-1.2575


Supports 117.55-117.30-117.00Resistance 118.45-119.00-119.80



Supports 1.5590-1.5530-1.5460  Resistance 1.5700-1.5730-1.5800



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