EUR/JPY Monthly Fundamental Forecast October 2012

Posted October 01, 2012 6:16 (GMT) | By FX Empire Analyst - Barry Norman | Print | Font Size
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Outlook and Recommendation

The EUR/JPY is trading at closed the month at 99.91. For Europe, material progress has been made, providing the foundation for a slight increase in our year-end EUR target to 1.26, but no change to our 2013 year-end forecast of 1.21. The ECB’s bond-buying program has decreased the risk of a monetary union breakup, while developments on the banking union front have relieved some fears over bank solvency. The major concerns from here are the political ability to build a framework for a fiscal union and how a decelerating growth profile will impact stabilization in the EMU. The EUR and the associated economies are likely to struggle.

Highest: 103.86	Lowest: 97.99	Difference: 5.87	Average: 100.72	Change %: 1.61

In this context, the USD is likely to strengthen against the euro (EUR) and Japanese yen (JPY).

JPY has benefitted from the depth of its bond market and an ongoing demand for safe haven assets; US – Japanese two-year spreads suggest a clear catalyst for yen weakness. Japanese policymakers are concerned about appreciation, but have yet to move towards intervention. Japanese fundamentals, including loose Bank of Japan policy, are a weight.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our weekly reports and we provide daily updates and outlooks

Central Bank Name: European Central Bank

Date of next meeting or last meeting: Oct 04, 2012

Current Rate: 0.750%

Central Bank The Bank of Japan -

Date of next meeting or last meeting: Sep 19, 2012

Current Rate: 0.100%

Economic events for the month of October affecting AUD, JPY, NZD and USD

Date	Time	Currency	Event	Forecast	Previous
Oct 1	14:00	USD	ISM Manufacturing PMI	50.0	49.6
Oct 2	4:30	AUD	Cash Rate	3.50%	3.50%
	4:30	AUD	RBA Rate Statement
Oct 3	1:30	AUD	Trade Balance	-0.62B	-0.56B
	12:15	USD	ADP Non-Farm Employment Change	148K	201K
	14:00	USD	ISM Non-Manufacturing PMI	53.4	53.7
Oct 4	1:30	AUD	Building Approvals m/m	4.8%	-17.3%
	1:30	AUD	Retail Sales m/m	0.5%	-0.8%
	12:30	USD	Unemployment Claims	371K	359K
	18:00	USD	FOMC Meeting Minutes
Oct 5	12:30	USD	Non-Farm Employment Change	111K	96K
	12:30	USD	Unemployment Rate	8.2%	8.1%
Oct 8	21:00	NZD	NZIER Business Confidence		-4
	23:50	JPY	Current Account		0.34T
Oct 11	0:30	AUD	Employment Change		-8.8K
	0:30	AUD	Unemployment Rate		5.1%
	12:30	USD	Trade Balance		-42.0B
Oct 12	12:30	USD	PPI m/m		1.7%
	13:55	USD	Prelim UoM Consumer Sentiment
Oct 15	12:30	USD	Core Retail Sales m/m		0.8%
	12:30	USD	Retail Sales m/m		0.9%
	21:45	NZD	CPI q/q
Oct 16	0:30	AUD	Monetary Policy Meeting Minutes
	12:30	USD	Core CPI m/m
Oct 18	14:00	USD	Philly Fed Manufacturing Index
Oct 19	14:00	USD	Existing Home Sales
Oct 24	0:30	AUD	CPI q/q
	14:00	USD	New Home Sales
	18:15	USD	FOMC Statement
	20:00	NZD	Official Cash Rate
	20:00	NZD	RBNZ Rate Statement
Oct 25	12:30	USD	Core Durable Goods Orders m/m
	14:00	USD	Pending Home Sales m/m
Oct 26	12:30	USD	Advance GDP q/q		1.3%
Oct 30	14:00	USD	CB Consumer Confidence
Oct 31	0:00	NZD	NBNZ Business Confidence
	0:30	AUD	Building Approvals m/m

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About: FX Empire Analyst - Barry Norman

Barry produces a private Daily Market Review newsletter that is distributed around the globe to over 25,000 subscribers and recently published a book on Options Trading that is available from amazon.com

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