FOREX IN REVIEW

FOREX IN REVIEW

Even though bond yields fell dramatically after last week's announcement, they have gradually reversed and started to climb once more as the "bluff" gradually wears off. Meanwhile, Spain is considering further budget cuts in education and healthcare in order to satisfy the Germans and pave the way for bond purchases to hold down borrowing costs. Austerity has already met the ire of the regional governments and may be harder to implement than expected. Equities which had been stronger earlier this week fell yesterday, led by the -1.02% drop in the U.K. FTSE 100. The Spanish IBEX was also weaker, falling -0.94% as the Swedish OMX was relatively stronger, rising 0.19%. As the rally on the Central Banker's comments begins to fizzle, we look ahead towards the event risk and central bank announcements starting later today.

The slowdown in Chinese manufacturing has failed to ebb as the flash PMI data from HSBC indicates further contraction while the official data also highlights a month-over-month decline. This raises the probability of further government stimulus in the form of loans to local government. In other news across the continent, India faced one of the worst blackouts in history as the electric grid failure left over 670 million people without power. This is coupled with the lowest growth figures in a decade as the Indian government struggles to get the nation back on track. The rupee has been one of this year's worst performers with USDINR closing in on three-year highs. Asian equities were mostly weaker, led lower by a -1.07% decline in the Nikkei -1.07%. The Australian ASX sunk -0.26% as the Hang Seng closed moderately higher, gaining 0.26%.

The U.S. markets saw a trifecta of positive data yesterday which may be enough for the Federal Reserve to postpone further stimulus until after the election. Home prices showed gains along with consumer confidence and the Chicago PMI highlighting that the Fed is contending with a mixed bag of economic data. Commodities fell along with China's manufacturing data with WTI crude oil sliding to $87.96. Gold also closed lower, moving out of the $1620 range to $1617.60. Equities were weaker across the board as lowered expectations of QE3 saw risk-assets dip across the board. The Dow Jones lost -0.49% as the S&P 500 and Nasdaq both closed lower, weakening -0.43% and -0.21% respectively. The dollar index (DXY) has risen slightly to 82.668 ahead of today's FOMC statement.
Disclaimer The analysis we provide is based on the average estimate of price movements in one day. Does not guarantee what we deliver is actually a proper and correct. Everything that happens in the decisions you make on your trading transaction is to be Your responsibilities. Visit Us www.deryworldscorp.web.id