Dagelijkse Markt Analyse 11 Januari 2019

DAGELIJKSE MARKT ANALYSE 15 MEI 2013

• Dollar Rallies Despite Blow Out S&P 500 Drive, Be Careful
• Euro Readies for the Economic Bill with 1Q GDP Data on Deck
• Australian Dollar: Down 7 Straight Days - Overextended or Building Momentum?
• Japanese Yen Facing 1Q GDP but Will it Turn the Currency’s Run?
• British Pound Exposed to Volatility on Labor Data, European GDP
• Swiss Franc May Permanently Change its Safe Haven Status
• Gold Down a Fourth Day, Dollar’s Stimulus Bearings Key

Dollar Rallies Despite Blow Out S&P 500 Drive, Be Careful
We’ve close yet another incredible day for the S&P 500…and the US dollar. Both benchmarks for risk appetite and safe haven put in for an aggressive push to fresh highs. For the Dow Jones FXCM Dollar Index, the tally is now up to four consecutive days of climb with consistent closes at near-three year highs. For the Fed-supported equity index, the 1.0 percent rally to 1,650 was a sharp extension to record highs. At this point, the both currency and stock index are pulling away from conventional risk-based measures. While the S&P 500 finds itself severely removed from record low, global benchmark rates; the balance between return and risk hasn’t materially declined in recent days and weeks to justify the astonishing move the reserve currency has put in. Once again, we are reminded that the environment for sentiment hasn’t fundamental changed – rather the standard ‘risk on / risk off’ theme simply isn’t driving the boat. It’s stimulus.

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DAGELIJKS MARKT ANALYSE 16 MEI 2013

The US Dollar has continued to rally in the Asian and European sessions, and the main victims of the USD rally have been the New Zealand and Australian Dollar. However, there was no obvious new catalyst to provide reasons for NZD/USD and AUD/USD declines.

Overnight, we found out that the Japanese gross domestic product rose 0.9% in the first quarter of 2013, beating expectations for the GDP to only rise 0.7% and up from the revised 0.3% economic expansion seen in Q4. However, the Yen continues to hover near 102.50, which was crossed yesterday for the first time in four and a half years.


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DAGELIJKSE MARKT ANALYSE 17 MEI 2013


• Dollar Avoids Tumble but Market More Critical of Fed’s QE3 Talk
• Euro: Officials Lay Out Risk While Bond Auctions Take Advantage
• Japanese Yen Gains Little Traction after Strong GDP but JGB Yields Ease
• Australian Dollar Tumbles as 10-Year Yields Reverses Carry Rebound
• New Zealand Dollar Suffers Most after GDP Forecast Downgrade
• British Pound Puts in for Universal Advance in Wake of BoE Minutes, Jobs
• Gold’s Six-Day Decline Matches Longest Tumble Since March 2009

Dollar Avoids Tumble but Market More Critical of Fed’s QE3 Talk
There was a bevy of Fed speakers this past session, but growing support of ‘tapering’ the central bank’s stimulus program (QE3) didn’t seem to generate much additional strength for the greenback. While speculators are certainly tuned into the serious consequences should the policy authority turn the boat around, we may have reached a saturation level where the dollar bulls and risk bears need a material escalation of this threat / opportunity. Looking over the highlights from the newswires Thursday, we see clear support for pulling back on the stimulus that has spurred moral hazard and watered down the value of the greenback. The Fed's Plosser called for an easing of the purchases starting in June and full stop by year end, Williams echoed those sentiments and Fisher took it further discussing the risks the program was inviting. These are compelling comments. The only problem is that these FOMC members aren’t voters. They can only influence from the sidelines. The majority of those that are weighing in on US monetary policy are far more reserved and neutral. Should a key ‘fence-sitter’ like Bernanke, Dudley or Yellen support the cause; it would probably represent the kind of escalation that finally cracks moral hazard in benchmarks like the S&P 500.

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DAGELIJKSE MARKT ANALYSE 21 MEI 2013



• Dollar Retreats Before Key Fed Officials Weigh In on QE3
• Japanese Yen: Are Officials Now Trying to Put a Top on USDJPY?
• Australian Dollar Steadies after Hefty Slump, RBA Minutes on Tap
• Euro Gains as Market Glosses Over Troublesome Headlines
• British Pound Takes in Round of Inflation Data for Stimulus Outlook
• New Zealand and Canadian Dollar to Scour Event Risk for Policy Clues
• Gold Posts First Advance in 8 Days, Biggest Advance in 11 Months

Dollar Retreats Before Key Fed Officials Weigh In on QE3
Having charged forward under one of the strongest two-week advances in nearly 18-months, the Dow Jones FXCM Dollar Index was in for a breather. That is as far as we should interpret Monday’s rather sharp decline. The aggregate measure for the benchmark currency dropped 0.6 percent for the biggest daily decline since September 7 – the heave to the final stage of the second quarter decline before embarking on the current 1,000-plus point advance. Fundamentally-speaking, it would be easy to connect headline fodder to this move. From a risk front, the S&P 500 and other benchmarks were little moved from their record highs. On the stimulus front, vocal policy dove Chicago Federal Reserve President Charles Evans offered up remarks that suggests his vote at the June Federal Open Market Committee meeting would be to keep the scope of the QE3 stimulus program in place through the foreseeable future.

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DAGELIJKSE MARKT ANALYSE 22 MEI 2013

• Dollar Steady Through Fed Chatter, Bernanke and FOMC Minutes Due
• Japanese Yen Rebound Stalls as Amari Muddles Yen Unease, BoJ on Tap
• Euro Firms as German Growth Outlook Improves, IMF Recommends Stimulus
• British Pound Tumbles after CPI Data Cools, Will BoE Minutes Signal Stimulus?
• Australian Dollar Traders Find Limited Guidance in RBA Minutes
• New Zealand Dollar: RBNZ Inflation Outlook Lowest in 13 Years Trouble
• Gold Cuts its Rebound Short, Fed Headlines Tangible Risk Tomorrow


Dollar Steady Through Fed Chatter, Bernanke and FOMC Minutes Due

The dollar put in for a volatile session thanks to the stimulus speculation Fed commentary stirred, but ultimately the benchmark closed in the green. This restraint may not last for long, however, with Fed Chairman Ben Bernanke set to testify on the economy – and inevitably monetary policy – tomorrow. In the interim, expectations for possibly heavy movement from the markets following Wednesday’s top event risk may have saved the dollar from a more serious tumble…at least temporarily. The Dow Jones FXCM Dollar Index’s drop Monday was the steepest in eight months. This could very well have evolved into a spark for a more prolific correction of the currency’s gains over the past six months – and particularly the previous two weeks. Yet, like each of the previous instances of a 50-60 point decline from the benchmark since September, a lasting bear trend was averted.

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DAGELIJKSE MARKT ANALYSE 23 MEI 2013

• Dollar Rallies after Fed Talks QE3 Exit, Will EUR/USD Break 1.2800?
• Japanese Yen Traders See the Limits, Ill Side Effects of BoJ Stimulus
• British Pound: A Round of Data and Nothing Went the Sterling’s Way
• Euro Optimism to be Tested by Recession Warning in PMI Data
• Australian Dollar Slides Further on Stimulus Concerns, Chinese Data
• Canadian Dollar Breaks from Multi-Year Range with Help of Retail Stats
• Gold: Steady Fed and BoJ Stimulus Programs Dollar Bullish, Gold Bearish

Dollar Rallies after Fed Talks QE3 Exit, Will EUR/USD Break 1.2800?

The markets have sought out guidance on the future of the Federal Reserve’s QE3 plans to shape their speculation, and that is exactly what Fed Chairman Ben Bernanke and the FOMC minutes offered. Tentative but tangible commentary about the eventual reduction in the current $85 billion-per-month program spurred the traditional ‘risk aversion’ move from the capital markets. For the S&P 500, an intraday reversal tore the index from fresh record highs to a dangerous shift in momentum that threatens a deeper rollover. Leading the safe havens – and a direct victim of the supply-and-demand elements of the US money supply – the Dow Jones FXCM Dollar (ticker = USDollar) surged above 10,850 to its highest level since July 2010. These are both meaningful developments, but they don’t exactly confirm conviction just yet. Just like a technical breakout does not necessarily guarantee a lasting trend, a fundamental volatility swell does not ensure a systemic shift in capital.

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DAGELIJKSE MARKT ANALYSE 24 MEI 2013


• Dollar Fails to Break EUR/USD’s 1.2750 Support as Risk, QE3 Fears Steady
• Japanese Yen Surge Tracking – Not Leading – Nikkei 225 Tumble
• Euro Finds a Mixed Bag as PMI Figures Pick Up, Spanish Bond Demand Slows
• Australian Dollar Refuses to Jump Start Serious Recovery
• British Pound Slides after GDP Details Show Weak 1Q Triple Dip Miss
• New Zealand Dollar Slide Continues but Hardly Accelerates on Weak Trade Data
• Gold Establishes Range Below $1,400, Awaits Dollar’s Move

Dollar Fails to Break EUR/USD’s 1.2750 Support as Risk, QE3 Fears Steady
Stimulus will end…eventually. And, this realization sent a shudder through the market when both the FOMC minutes and Federal Reserve Chairman Bernanke noted that the central bank will likely temper QE3 in the coming months. Yet, how sensitive are the markets to this eventuality? If it was the mere recognition of the end to perpetual expansion of the Fed’s balance sheet that would spur speculators to abandon ship, we would have seen the S&P 500 build its sharp reversal Wednesday into a persistent trend and found the dollar driving EURUSD below 1.2750. Yet, neither critical escalation was realized this past session. The benchmark equity index closed its first back-to-back decline in five weeks; but it would also posts its biggest intraday, bullish recovery this year. Meanwhile, the combination of risk and money supply (the supply-and-demand aspect of balance sheet building) wouldn’t prevent the greenback from dropping against all of its major counterparts Thursday. Yet, despite the offsetting effort, neither investor sentiment nor dollar appetite are secure.

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DAGELIJKSE MARKT ANALYSE 28 MEI 2013


• Dollar Reversal Risk High if Fear Doesn’t Fill in for QE3 Debate
• Japanese Yen: Volatility in Japan Adds to Dangers for Yen Bears
• Euro Traders Should be Ready for Updates on Spain, France, Portugal, etc.
• Australian Dollar Oversold so Long as Fundamentals Don’t Kick In
• Swiss Franc: Tempered Euro Influence Makes for Data Sensitivity
• Canadian Dollar at Crucial Levels before BoC Rate Decision
• Gold Volume, Price Action Signal Impending Breakout

Dollar Reversal Risk High if Fear Doesn’t Fill in for QE3 Debate
The extended holiday weekend for the US and UK sapped the speculative drive from the global markets Monday. However, this lull will soon pass, and we will return to the menacing volatility and equity drop seen the second half of last week. Is the market destined to have its faith in persistent capital gains and central bank stimulus shaken, or has the extended weekend cured investors of those doubts? Taking the temperature of sentiment ahead of the official US open is difficult as the FX market carved out an exceptionally small range through the opening session. The Dow Jones FXCM Dollar Index posted its smallest daily trading range in a month – a mere 28 points – while the equally risk-sensitive yen crosses failed to take up the cause of risk trends. That said, a strong performance for Euro-area stocks could frame expectations in the absence of commitment Tuesday morning before the New York session begins.

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DAGELIJKSE MARKT ANALYSE 29 MEI 2013

• Dollar Closes Three Year High as QE3 Taper Fears Return
• Euro Awaits EU Policy Recommendations for Spain, Cyprus, Slovenia
• Japanese Yen Retreats from Key Breakout Ahead of BoJ Participants
• Australian Dollar: AUDUSD, AUDCAD Threaten Critical Break Lower
• Swiss Franc Shows Remarkable Volatility after Data, Banking Concerns
• Canadian Dollar: Should Traders be Suspicious of BoC Rate Decision?
• Gold Surprisingly Holds Congestion Despite Dollar, Treasury Volatility

Dollar Closes Three Year High as QE3 Taper Fears Return
The dollar posted an impressive performance this past session with a positive showing versus all of its major counterparts on an unexpected outbreak in QE3 tapering fear. We certainly saw speculation of a stimulus shift from the Federal Reserve in the Dow Jones FXCM Dollar Index’s committed 56 point advance to its highest close since July 2010. However, we don’t appreciate the full scope of the underlying groundswell unless we look across the asset spectrum. At the high end of risk appetite, the S&P 500 – despite closing higher on the day – suffered a substantial intraday reversal. Meanwhile, the US 10-year Treasury note came under intense selling pressure. Taken together, these three reflect the market’s sensitivity to stimulus easing and the severe implications for something far more critical: risk aversion.

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DAGELIJKSE MARKT ANALYSE 30 MEI 2013

• Dollar Risks Tumble if QE3 Taper Talk or Capital Market Don’t Catch
• Euro Suspiciously Aloof About Broad Warning About Future
• Japanese Yen: Policy Officials Try to Talk Down Stimulus Risks
• Australian Dollar: Bond Sales Reflect Aussie’s Other Problem
• Swiss Franc Faces Another Volatility Spark in 1Q GDP
• Canadian Dollar Offered No Surprises from BoC Rate Decision
• Gold Activity at Two Month Low, Breakout Barometer High

Dollar Risks Tumble if QE3 Taper Talk or Capital Market Don’t Catch
The US dollar has done its best to run astray of the dogged strength of stimulus-backed risk assets. As of late, the bullish effort carried the currency to near three-year highs; but the market seems increasingly open to taking a breather. This morning, the Dow Jones FXCM Dollar Index (ticker = USDollar) slipped a gradual rising floor of support to trade back to 10,750. This is the edge of deeper retracement. The same risk is palpable for the currency’s major pairings. EURUSD has made a push back towards 1.3000, AUDUSD bounced hard from its multi-year support around 0.9550 and USDJPY is falling back towards 100 once again. After such an extensive move against the rudimentary fundamental backdrop, further climb requires real support. The longer we go without a firm drive, the higher the probability of retracement.

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DAGELIJKSE MARKT ANALYSE 31 MEI 2013


• Dollar’s Biggest Drop in Two Months Yet to Turn Full Bear Trend
• Japanese Yen Still at High Risk of Breakout as Nikkei, JGBs Volatile
• Euro Traders Tolerant of Crisis as Long as They Don’t Lose Money
• New Zealand Dollar Traders Show Limited Fear of Future RBNZ Intervention
• Canadian Dollar Faces Another Volatility Risk in 1Q GDP Report
• British Pound Ignores Growth Data, Confidence Survey Improvement
• Gold Makes a Break Above $1,400 but Where is the Momentum

Dollar’s Biggest Drop in Two Months Yet to Turn Full Bear Trend
The dollar took a spill this past session, and the technical view of the Dow Jones FXCM Dollar Index looks particularly troubling. Yet, there is a wide gap between a mild retracement and full-blown bear trend that needs to be filled by fundamentals and/or a sentiment upheaval. So far, we have yet to make that substantial leap – but the risk is certainly there as the bulls recognize the benchmark’s extensive move despite the positive balance of risk appetite and evidence to suggest QE3 tapering may not find the necessary consensus until the September meeting. The split outlook puts some of the majors in jeopardy while others are ahead of the curve.


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DAGELIJKSE MARKT ANALYSE 4 JUNI 2013

• Dollar Suffers Biggest Tumble in 11 Months, Where was Risk Aversion?
• Japanese Yen, Nikkei 225 and Capital Spending Defy Abe
• Australian Dollar: Will the RBA Curb Aussies Best Rally in Nearly a Year?
• Euro Balance of Growth and Austerity Tipping Once Again
• British Pound: BoE Reports Borrowing Recedes, Rescue Effort Ineffective
• Canadian Dollar: USDCAD Drops Back Below 1.0300 Before Trade Data
• Gold’s Impressive Rally Comes on Low Volume, Dollar Weakness

Dollar Suffers Biggest Tumble in 11 Months, Where was Risk Aversion?
The dollar dropped against all of its liquid counterparts to open this week and the Dow Jones FXCM Dollar Index suffered its sharpest single-day decline since June 29, 2012. While a late-day advance for US equities offered a pro-risk theme to shore up the fundamental reasoning for the benchmark currency’s slump – the move speaks to the market’s other major theme: speculation on stimulus and the ‘taper’. Through May, the dollar charged higher against the current of speculative appetite reflected in the standard-bearer S&P 500’s climb. The stock market’s source of strength has been the latent momentum behind the stimulus build up by the Fed over the past few years – which is running more and more on familiarity rather than fresh help. From the currency, the early speculation that the open-ended stimulus regime would take its first step back from constant escalation in the coming months or weeks drew the skeptics fearing the moderation of stimulus and its risk impact.

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DAGELIJKSE MARKT ANALYSE 5 JUNI 2013

• Dollar: Is There Enough in ISM Services Data to Stoke Taper Talk?
• Euro Circles Suggest ECB Backing Off Stimulus Escalation Option
• Australian Dollar: In-Line GDP Nudges RBA Rate Cut Expectations
• Japanese Yen Unmoved by Increasingly Colorful Warnings
• British Pound: Will Service Sector Round Out Recovery Hopes?
• Canadian Dollar Traders Watch Demand for 30-Year Bond
• Gold Volume 2-Month Low, ETF Holdings 2-Year Low, Futures Interest 4-Year Low

Dollar: Is There Enough in ISM Services Data to Stoke Taper Talk?
A valiant effort was made by the US dollar to regain some of the significant ground lost on Monday. Yet, the rebound wouldn’t fully balance the greenback; and the currency subsequently looks more sensitive to disappointing news than encouraging. Without further fundamental support, the Dow Jones FXCM Dollar Index is notably fatigued having rallied to near-three year highs. To keep the drive intact – especially against the current of persistent stimulus hopes – bulls need convincing. A market-wide deleveraging on risky positions would be a windfall for the safe haven dollar, but that potent scenario shouldn’t be depended on given the persistence of benchmarks like the S&P 500.

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DAGELIJKSE MARKT ANALYSE 6 JUNI 2013



• Dollar Restraint While S&P 500 Collapses – What Does it Mean?
• Euro at Risk of Breakout as ECB Policy Decision Approaches
• Japanese Yen Suffering the Tension Between Stimulus and Sentiment
• British Pound: The Bank of England Has a Serious Chance to Surprise, Though Will Not
• Australian Dollar Extends Plunge, AUDUSD Down Over 1,000 Pips from April 11
• Canadian Dollar Takes in Business Sentiment, New BoC Governor Speech
• Gold: The First Increase in ETF Gold Holdings in 18 Days Not Bullish

Dollar Restraint While S&P 500 Collapses – What Does it Mean?
After four years of consistent speculative escalation behind ‘risky’ assets like the S&P 500, is faith in stimulus finally starting to crumble? If so, the bubble behind equity and other speculative assets presents a serious opportunity for safe havens like the US dollar. Typically on the opposite ends of the spectrum, the equity and FX market benchmarks have instead run on similar paths through 2013 – leading many to believe that one or both had changed their fundamental bearings. Yet, this unusual relationship does not reflect a role change for either, simply a lack of influence through that particular aspect – risk on / risk off. Under that logic, the extremely threatening move that the S&P 500 made this past session – a drop back to its 50-day moving average, seven-month trend floor and near 5-percent retracement threshold to 1,600 – should inspire the greenback to revive its role as ultimate safe haven. That said, the Dow Jones FXCM Dollar Index was little changed this past session having actually slipped 0.1 percent. This tells us that we are the verge of a seismic change, but we aren’t there yet…

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DAGELIJKSE MARKT ANALYSE 7 JUNI 2013


• Yen Gains, Aussie Dollar Sinks as Markets Position for US Jobs Data
• US Dollar to Fall if Soft NFP Result Weighs on Fed QE Reduction Bets

Risk aversion gripped currency markets in overnight trade as investors positioned for May’s US employment report (due to cross the wires at 12:30 GMT) and the possibility that it may encourage the Federal Reserve to taper the size of QE3 asset purchases. The sentiment-linked Australian Dollar and New Zealand Dollar suffered the bulk of the selloff while the Japanese Yen outperformed amid liquidation of carry traders funded in terms of the perennially low-yielding currency.


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DAGELIJKSE MARKT ANALYSE 12 JUNI 2013

• Dollar at Risk of Lasting Bear Trend if S&P 500 Doesn’t Capitulate
• Japanese Yen Wins Biggest Rally in 3 Years, USDJPY Eyes 95
• Euro: Will the OMT Hold Up to Market Pressure?
• New Zealand Dollar: Setting Expectations for the RBNZ Rate Decision
• British Pound Looks to Jobs Data to Push GBP/USD Above 1.5700
• Swiss Franc: Parliamentary Committee May Disrupt Break of Bank Secrecy
• Gold Meanders Below $1,400 as Volume Dries Up

Dollar at Risk of Lasting Bear Trend if S&P 500 Doesn’t Capitulate
An effort by the US dollar to recover its footing ended miserably this past session – but the bears haven’t been allowed free rein over the benchmark currency just yet. For the Dow Jones FXCM Dollar Index, the 0.7 percent slip Tuesday was third sharpest in 2013. It also so happens that the previous two larger stumbles came this past week. This speaks to an increasingly volatile market backdrop which can often open the door for a far more prolific trend development given the correct push. Yet, with the USDollar facing significant support between a multi-year range mid-point at 10,560 and 100-day moving average at 10,500; leveraging the bears’ drive is perhaps more difficult that current fundamentals permit. Weakness over the past few weeks owes much of its existence to the eased fear of the Fed ‘tapering’ its stimulus program next Wednesday at the June policy meeting. The influence of this tempered dollar driver has shown itself in the S&P 500’s ability to hold 1,600 support, but a weak 3-year Treasury auction shows that the shift is inevitable. Stimulus and risk threaten to set each other off.


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DAGELIJKSE MARKT ANALYSE 13 JUNI 2013


• Dollar and S&P 500 Traders Face Major Trend Reversals
• Japanese Yen: USD/JPY Slips Below 95 as Nikkei Collapses 6 Percent
• British Pound: Despite Rally After Report, GBP/USD Yet to Break 1.5700
• Euro Rallies to February Highs Despite Greece Troubles
• Canadian Dollar Looks to Break Chop with BoC Financial Stability Report
• Swiss Franc Gains, USD/CHF Hits 4 Month Low after Tax Evasion Vote
• Gold Advances as Dollar Stumbles, Yen Crosses Retreat

Dollar and S&P 500 Traders Face Major Trend Reversals
Both the US dollar and S&P 500 futures have made ominous moves over the past 24 hours to threaten long-term trend changes. While the recent, positive correlation between the benchmark equity index and currency would seem to suggest that both are susceptible to a collapse; the change to the fundamental landscape under such seismic shifts would likely revive the ‘risk / safe haven’ dynamics that the dollar seems to have abandoned. The line in the sand both FX and capital market trader should watch for is 1,600 on the S&P 500. The combination of the 50-day moving average, seven-month channel floor and psychological appeal of a round number can draw enough attention that its failure can set off a tidal wave of pent up fears. Global market yields are just off record lows; the Federal Reserve is running short on flexibility to continually drive markets higher; growth forecasts have cooled; volatility measures are rising; and leverage (measured on the NYSE) is at a record high. These are troubling but vague conditions. What better way to bring them all to the surface than a pressured selling / deleveraging?

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DAGELIJKSE MARKT ANALYSE 14 JUNI 2013

• Dollar Suffers Critical Yen and Euro Break, But is It Fatal?
• Japanese Yen: USDJPY and EURJPY Unable to Rally with Equities
• Euro: Officials Remark OMT Legal, But New Stimulus Not Planned
• Australian Dollar Enjoys Second Biggest Rally in a Year
• British Pound: BoE Official Says Financial System at Risk
• New Zealand Dollar Finding Greater International Demand
• Gold Activity Levels Lowest in Nearly Three Months

Dollar Suffers Critical Yen and Euro Break, But is It Fatal?
It was a standoff between the US dollar and S&P 500, and the greenback lost…for now. While the benchmark for safety (dollar) and speculative appetite (equity index) have maintained an unusual positive correlation through recent months, the next move required far more conviction than this stimulus by-product relationship could support. With the Dow Jones FXCM Dollar Index facing the floor of this year’s bull trend and the S&P 500 standing at the threshold of its own 7-month upside drive, we would need to see a true shift in the fundamental backdrop to take the next big step. As it happens, the combination of a massive, multi-year decline in Japanese markets earlier in the day (to recover from), positive US economic data and reassuring words of stimulus led to the biggest rally for US capital markets in 2013. That is the kind of drive from a risk benchmark that can push EUR/USD above 1.3350 and USD/JPY below 95.

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DAGELIJKSE MARKT ANALYSE 18 JUNI 2013

• British Pound May Rise as UK CPI Rise Dents BOE Stimulus Outlook
• Euro Could Find Support as German ZEW Survey Hits 3-Month High
• US CPI Critical as Fed Policy Bets Take Center Stage Before FOMC

May’s UK CPI data headlines the economic calendar in European trading hours. The year-on-year inflation rate is expected to edge higher to 2.6 percent having set a seven-month low at 2.4 percent in the prior month. Prices appear to be responsive to monetary policy expectations, with GBPUSD tracking the UK-US 10-year bond yield spread and the BOE /Fed balance sheet ratio. That suggests an increase that scatters near-term BOE stimulus expansion bets is likely to be supportive for the British Pound, and vice versa.


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DAGELIJKSE MARKT ANALYSE 19 JUNI 2013


• Dollar and Stock Traders Ready for Fed Guidance on Taper
• British Pound Drops after Inflation Figures Pick Up, Complicate BoE
• Euro Traders Starting to Feel the Crisis Heat Again from Cyprus
• Australian Dollar: Is the RBA Going to Join the Currency War?
• Swiss Franc in Trouble One Way or the Other After Stalled Tax Debate
• Gold Draws Traders in a Potentially Ill-Fated Breakdown Prior to Fed

Dollar and Stock Traders Ready for Fed Guidance on Taper
Price and fundamental developments for the dollar, FX markets, equities and other risk-sensitive assets over the past weeks and months can be rendered obsolete in mere moments depending on what the Fed does and says Wednesday afternoon. By most accounts, the markets have grown heavily dependent on the presence and support of central banks – with the Federal Reserve leading the charge. Whether directly exploiting the ‘moral hazard’ of a backstop on taking risk positions or implicitly participating in the incredible consistency of benchmarks like the S&P 500, positioning is irrevocably tied to the external support. What makes this Federal Open Market Committee (FOMC) meeting particularly complicated and dangerous is that faith in stimulus has outpaced confidence in economicand financial recovery. Given such precarious conditions, mere discussion of a modest reduction in $85 billion-per-month stimulus injections (‘Taper’) could turn the speculative tides.

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