Currency Updates:
AUD/USD Europe sold a rally towards 0.882 and had the pair near 0.8790 as NY got going. NY kept the pressure on as the USD was firm for most of NY. The pair pushed towards 0.8760 before bouncing a bit. Another leg lower took hold though as EUR/AUD lifted above daily highs near 1.4460 and 1.4490. AUD/USD hit a low inNY of 0.8735 before bouncing ahead of the Fed minutes. The dovish lean and mention of USD strength in the minutes sent USD spiraling lower across the board. AUD/USD spiked up to a high of 0.8847. Offers ahead of 0.8850 capped the gains but very little pullback was seen. Late in the day the pair sat near 0.8840. traders now look to the OZ jobs report later. The ABS’ adjustment to previous releases has the market wondering what tonight’s result will be. Should the results surprise to the topside AUD/USD likely gets another boost and may make a run at 0.8930/50 resistance.
EUR/USD NY walked in with the pair near 1.2650 and they made an early push towards 1.2640 as the USD was firm early on. The dip was bought though. USD/JPY seemed to drive market sentiment and its slip from near 108.50 allowed EUR/USD to rally just above 1.2690. A recovery for the greenback and USD/JPY’s break above 108.50 sent EUR/USD back near 1.2650 ahead of the Fed minutes. The minutes were deemed dovish as the Fed seems in no rush to raise rates while they also noted more USD strength could hurt parts of the econ & slow inflation’s rise. EUR/USD spiked higher as the USD fell across the board. The pair ran stop above 1.2700/15 and hit a 1.2749 high. Offers at 1.2750 capped. A slight recovery for the USD saw EUR/USD pullback but only slightly. Late in the session the pair sat near 1.2725. There is no major data in Asia to impact the pair so traders will wait until the ECB’s monthly report is released in Europe’s morning.
USD/JPY Traders got double-crossed in USD/JPY today. They were initially induced to cover shorts after Abenomics architect Kozo Yamamoto called for fresh BoJ easing and delaying next year’s VAT tax hike until ’17. Lack of serious progress or a close below 108, with importers taking advantage of the dip to 107.75, was already beginning to lift prices in NorAm trading, eventually running stops above offers at 108.50-55 and above the daily Cloud top in EUR/JPY at 137.18. A recovery in equities & yield spreads got USD/JPY to a 108.74 high before the Fed Minutes crushed the buck and Tsy yields, but gave equities an extra leg up. The Minutes ought not have been a shock to anyone who listened to what Dudley and others have said since the last meeting, but some were shocked nonetheless. USD/JPY fell to 108.06 before the shock wore off and the surge in N225 futures began to offset the slide in USD-JPY yield spreads. We may yet to a reversion to the 200-HMA by 109.10, but getting above the 110.09 peak looks doubtful until or unless we here the BOJ itself talking about seeing potential for further QQE. Crossed bounced, AUD/JPY from by its 200-DMA.
Looking Ahead – Economic Data (GMT)
• 23:50 JP Foreign Bond Investment w/e 184.6b-prev
• 23:50 JP Foreign Invest JP Stock w/e -41.6b-prev
• 23:50 JP Machinery Orders MM* Aug f/c 0.9%, 3.5%-prev
• 23:50 JP Machinery Orders YY* Aug f/c -5.1%, 1.1%-prev
• 00:30 AU Employment* Sep f/c 20000, 121000-prev
• 00:30 AU Full Time Employment* Sep 14300-prev
• 00:30 AU Participation Rate* Sep f/c 64.8%, 65.2%-prev
• 00:30 AU Unemployment Rate* Sep f/c 6.1%, 6.1%-prev
Looking Ahead – Events, Other Releases (GMT)
• No Significant Events
