Fundamental headlines
-Weidmann of the Bundesbank said that no politician wants to hear - Bloomberg
-Forecasts of rate 17 Fed can confuse more clarify - Bloomberg
-The Korea of North nuclear test ready "Soon" - Reuters
-The music stopped for Wall Street banks - WSJ
-United States saw high Cop as a candidate for risk of asylum - WSJ
Summary of European Session
Risk appetite was tempered in the night as the players in the market continued to digest the political developments of the weekend outside Europe, but overall, it seems that concerns have been pushed to the side, would it temporarily. Despite the negative sense of yesterday, major European stock indexes traded relatively unchanged otherwise positive before equity money U.S. open. The major development in the night, however, was the performance of the Australian Dollar in light of a low inflation reading.
Last week, the Reserve Bank of Australia has published the minutes of the meeting earlier in April. Essentially, the minutes said that "If the readings of inflation to disappoint, the RBA will be a reduction in the rate.". Well, Sunday, the quarterly producer price index showed deflation, while this index published earlier today showed little or no underlying price pressures. In light of these developments, I believe that it is all but guaranteed that there is a reduction of 25-points; but the question is to know if there is a reduction in rate 50 - bps.
Credit Switzerland Overnight Index swap, before inflation earlier today, there was already a 93 per cent of probability of a decline in the rate of 25 - bps; After printing, there was also great as a chance of 40% for a cut of 50 - bps (with a probability of 100% of a cut of 25 - bps). If the expectations of lower rates continue to thrust, where that share the Australian Dollar? Our model suggests that, if the expectation of the Japan and the Federal Reserve Bank rate remain the same (and no other stimulus was announced), we should the AUDUSD fall to parity (1.0000) and AUDJPY to fall below 81,000.
Take a look at credit, debt in the eurozone periphery has posted a modest rebound after the underperformance of yesterday, with the earnings leader Spanish 5.850% duty of 10 years, with its yield drop by base-9 points, 5. On the more short-end of the curve, there is a significant discrepancy between the sovereign debt of the periphery, with the Spanish note of 2-year gains (11, 5 - bps), Italian note 2 years unchanged and the Irish 2-year note behind the pack (+ 19, 3 - bps).
Graphing with Marketscope - prepared by Christopher VecchioOverall, the Japanese Yen was the best performing major currency against the Dollar, climbing from 0.12%. The Euro was the best-performing next major, up to 0.07% against the US Dollar, as the political woes of the Euro area apparently took the day off for a tempered optimism. The worst performer is the Australian Dollar, down 0.36%, after dismal inflation about earlier today.
4-Hour Price Action
Main levels: 12: 55 GMT
So far, on Tuesday, the Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) is higher, trade at 9933.68 at the time when this report was written, after opening at 9929.13. The index traded mostly higher, with the top at 9947.47 and at 9923.62.
-Weidmann of the Bundesbank said that no politician wants to hear - Bloomberg
-Forecasts of rate 17 Fed can confuse more clarify - Bloomberg
-The Korea of North nuclear test ready "Soon" - Reuters
-The music stopped for Wall Street banks - WSJ
-United States saw high Cop as a candidate for risk of asylum - WSJ
Summary of European Session
Risk appetite was tempered in the night as the players in the market continued to digest the political developments of the weekend outside Europe, but overall, it seems that concerns have been pushed to the side, would it temporarily. Despite the negative sense of yesterday, major European stock indexes traded relatively unchanged otherwise positive before equity money U.S. open. The major development in the night, however, was the performance of the Australian Dollar in light of a low inflation reading.
Last week, the Reserve Bank of Australia has published the minutes of the meeting earlier in April. Essentially, the minutes said that "If the readings of inflation to disappoint, the RBA will be a reduction in the rate.". Well, Sunday, the quarterly producer price index showed deflation, while this index published earlier today showed little or no underlying price pressures. In light of these developments, I believe that it is all but guaranteed that there is a reduction of 25-points; but the question is to know if there is a reduction in rate 50 - bps.
Credit Switzerland Overnight Index swap, before inflation earlier today, there was already a 93 per cent of probability of a decline in the rate of 25 - bps; After printing, there was also great as a chance of 40% for a cut of 50 - bps (with a probability of 100% of a cut of 25 - bps). If the expectations of lower rates continue to thrust, where that share the Australian Dollar? Our model suggests that, if the expectation of the Japan and the Federal Reserve Bank rate remain the same (and no other stimulus was announced), we should the AUDUSD fall to parity (1.0000) and AUDJPY to fall below 81,000.
Take a look at credit, debt in the eurozone periphery has posted a modest rebound after the underperformance of yesterday, with the earnings leader Spanish 5.850% duty of 10 years, with its yield drop by base-9 points, 5. On the more short-end of the curve, there is a significant discrepancy between the sovereign debt of the periphery, with the Spanish note of 2-year gains (11, 5 - bps), Italian note 2 years unchanged and the Irish 2-year note behind the pack (+ 19, 3 - bps).
AUDJPY 5-min Chart: April 24, 2012
Graphing with Marketscope - prepared by Christopher VecchioOverall, the Japanese Yen was the best performing major currency against the Dollar, climbing from 0.12%. The Euro was the best-performing next major, up to 0.07% against the US Dollar, as the political woes of the Euro area apparently took the day off for a tempered optimism. The worst performer is the Australian Dollar, down 0.36%, after dismal inflation about earlier today.4-Hour Price Action
Main levels: 12: 55 GMT
Key Levels: 12:55 GMT
So far, on Tuesday, the Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) is higher, trade at 9933.68 at the time when this report was written, after opening at 9929.13. The index traded mostly higher, with the top at 9947.47 and at 9923.62.
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