Risk on but where is FX?
City Index May 28, 2014 3:05 PM
<p>Asian equities markets trade firmly in positive territory following another record high achieved in the S&P 500 yesterday with the index adding an additional 0.6% […]</p>
Asian equities markets trade firmly in positive territory following another record high achieved in the S&P 500 yesterday with the index adding an additional 0.6% on the day.
Asian bourses received further positive sentiment following media speculation that the PBoC will deliver further easing initiatives to stabilise the ailing growth picture in China. The measure rumoured to be on the agenda is the usual suspect of a cut in the reserve requirement ratio.
FX has failed to break from small ranges this week despite the buoyance seen in risk. The Asian session was dominated by the CNH, which made a fresh 18-month high. (CNH is soon be offered across all CI/IFX and FX Solutions brands.)
The NZD came under renewed pressure as the dairy board Fonterra announced a lower milk dividend to its farmers for next season as New Zealand business confidence dropped to 53.5 from 64.8.
European sentiment surveys will dominate data proceedings today with US mortgage applications the only distraction from across the board.
I feel the FX markets will continue to focus on what action the ECB will take next week, which looks to be the ‘package’ approach. This may well consist of a cut in both deposit and finance rates while leaving total QE on the hold for the moment.
Supports 1.3610-1.3565-1.3520 | Resistance 1.3645-1.3675-1.3700
Supports 101.50-101.20-100.75 | Resistance 102.00-102.15-102.35
Supports 1.6730-1.6680-1.6655 | Resistance 1.6800-1.6840-1.6880
GAIN Capital UK Limited (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.