EUR/JPY Fundamental Analysis – November 20, 2015 – Forecast

Analysis and Recommendations:

The EUR/JPY gained 16 points to trade at 131.91 as traders were a bit surprised from the Bank of Japan decision although the bank did as expected traders were hoping for something different or at least the promises of additional stimulus. Members seemed to close the door on future stimulus stating the economy was starting to improve even though Japan fell back into a recession.  On the crucial inflation outlook, the board suggested that inflation expectations appear to be rising on a whole from a somewhat lower perspective, although acknowledged that some indicators had recently shown relatively weak developments.

The euro made a remarkable recovery this morning after yesterday’s raid on suspected terrorists, bombing threats on 2 Air France flights and additional bombing runs by the French did not do enough to halt ISIS oil assets. There has been an uprise across Europe finally about the free movement of immigrants with no checks as they move between EU member states. The trouble is, ending the free movement of people will have a huge economic impact. It will make labor markets less mobile, hit companies that rely on lots of cheap labor, and it will make it even harder to make a success of the euro that it already is. Against that, it may turn out to help the countries that are net exporters of labor, although that will be a marginal benefit.

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Today’s economic releases:

 

Upcoming Economic Events that you should be monitoring:

Friday, November 20, 2015

Government Bond Auctions

Date Time Country

Nov 19 10:30 Spain 0.25% Apr 2018 Bono, 1.15% Jul 2020 Bono, 5.4% Jan 2023

Nov 19 10:50 France Eur 7-8bn; 4.25% Oct 2018 OAT, 0.25% Nov 2020 OAT, 2.25%

Nov 19 11:50 France Eur 1-1.5bn; 0.25% Jul 2024, 1.85% Jul 2027, 3.15% Jul 2032

Nov 19 N/A US Holds 10-year TIPS auction

Nov 20 16:30 Italy Announces details of CTZ/BTPei on 25 Nov

Nov 23 12:00 Belgium Auctions OLOs

Nov 23 N/A US Holds 2-year note auction

Nov 24 17:30 Italy Announces details of BTPs/CCTeu on 27 Nov

Nov 24 N/A Holland Eur 1.0-2.0bn 0.25% Jul 2025 DSL

Nov 24 N/A US Holds 5-year note auction

Nov 25 11:03 Sweden Holds bond auction

Nov 25 11:10 Italy Auctions CTZ/BTPei

Nov 25 11:30 Germany Eur 3bn 1.0% Aug 2025 Bund

Nov 25 N/A US Holds 2-year FRN auction

Nov 25 N/A US Holds 7-year note auction

Nov 26 11:03 Sweden Holds bond auction

Nov 27 11:03 Sweden Holds bond auction

Nov 27 11:10 Italy Auctions BTPs/CCTeus