EUR/JPY Fundamental Analysis – November 10, 2015 – Forecast

Analysis and Recommendations:

The EUR/JPY added 47 points in the morning session to trade at 132.75 as the euro recovered after its harsh drop against the greenback after the release of US jobs data. Odds on the Federal Reserve hiking benchmark rates at its next meeting in December climbed to 68 percent after the payrolls data signaled the U.S. labor market is on a solid footing. The report vindicated rhetoric from Fed officials, who had been working to reintroduce the prospect of a 2015 rate increase after citing lackluster inflation and concern over China’s slowdown for their inaction in September and October. Data on Chinese consumer prices to retail sales this week will help investors get a handle on Asia’s largest economy, and color speculation on the outlook for further easing.

There was a lack of market data in the morning and the calendar is bear through most of the day with the highlight of a speech by ECB chief Mario Draghi.

The ECB may not feel pressure from the market to go ahead and unveil its ‘big bazooka’ at the December meeting. ECB President Mario Draghi has already started to try to temper expectations of the ‘big bazooka’ being unveiled in December: a deposit rate cut alongside an enhancement to the current QE program (operating at a €60 billion/month run rate through September 2016).

Last week, he said in regards to the extraordinary easing program, “Those asset purchases are proceeding smoothly and continue to have a favorable impact on the cost and availability of credit for firms and households. But even though domestic demand remains resilient, concerns over growth prospects in emerging markets and other external factors are creating downside risks to the outlook for growth and inflation.” The translation: but for foreign economic issues, the Euro-Zone is humming along just fine for now and would be in a better place.

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.

Today’s economic releases:

 

Upcoming Economic Events that you should be monitoring:

Tuesday, November10, 2015

Government Bond Auctions

Date Time Country

Nov 10 10:30 UK 0.125% 2058 I/L Gilt auction

Nov 10 N/A Holland Eur 2.0-3.0bn 0% Apr 2018 DSL

Nov 10 N/A US Holds 10-year note auction

Nov 11 10:03 Sweden Holds bond auction

Nov 11 11:15 Norway Holds bond auction

Nov 11 10:30 Germany Eur 3bn 0.25% Oct 2020 Bobl

Nov 12 10:10 Italy Auctions BTPs/CCTeus

Nov 12 10:30 UK 4.25% 2039 Gilt auction

Nov 12 N/A US Holds 30-year bond auction