EUR/JPY Fundamental Analysis October 22, 2014 Forecast

Analysis and Recommendations:

The EUR/JPY eased by 22 points to trade at 136.70 as the yen gained momentum but there was little to no news from Japan this morning. The euro continued to ease after comments and news in the eurozone weighed heavily on the currency. Worries about global economic growth persist.

Germany’s central bank said on Monday the German economy, the largest in the euro zone, risks coming dangerously close to recession, forecasting little or no growth in the second half of the year.

The European Central Bank, meanwhile, said it had started buying covered bonds, opening a new front in its battle to revive the euro zone economy and keep deflation at bay. The Bundesbank’s gloomy assessment raises the prospect that the German economy could stay weak, compounding the problems of the 18-country currency bloc, whose economy is already slowing to a virtual halt.

German data showed producer prices declining for the 14th consecutive month, highlighting the disinflationary pressures that are causing concern to investors and policymakers alike.

With the euro under constant pressure from worries over eurozone deflation, he said, the beneficiary could prove to be the safe-haven Japanese yen. The yen’s descent against the greenback to a six-year low of 110.09 on Oct. 1 – a rapid 8 percent decline over three months – has prompted a chorus of complaints from companies that Abe’s medicine could become poison.

While the yen has since regained some ground to around 106 on expectations that the Federal Reserve may put off raising U.S. interest rates, the potential for further weakness is a major concern for many firms, the Reuters Corporate Survey showed.

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 actual vs. forecast:

 

Upcoming Economic Events that you should be monitoring:

Government Bond Auction

Date Time Country Auction

Oct 21 10:30 Spain 3 & 9M T-bill auction

Oct 21 11:00 Finland Maximum Eur 1bn 2.75% Jul 2028 bonds

Oct 21 11:00 Norway Nok 3bn 3% Mar 2024 bonds

Oct 21 11:00 UK GBP 3bn 2.75% Sep 2024 Gilt

Oct 21 12:30 ESM Up to Eur 1bn 6M T-bills (Apr 2015)

Oct 22 11:30 Germany Eur 2.0bn 2.5% Aug 2046 Bund

Oct 23 11:03 Sweden Sek 1bn 0.5% Jun 2017 I/L bond

Oct 23 17:00 US Announces 2/5/7Y Note & 2Y FRN auctions on Oct 28/29/30

Oct 23 17:30 Italy Announces details of BTPei/CTZ auctions on Oct 28

Oct 23 19:00 US USD 7bn 30Y TIPS auction

Oct 24 17:30 Italy Announces details of BOT auction on Oct 29

Oct 27 12:30 Germany Eur 2.0bn new 12M Bubill (Oct 2015) auction

Oct 27 18:30 Italy Announces details of BTP/CCTeu auctions on Oct 30

Oct 27 12:10 Italy BTPei/CTZ auctions

Oct 28 12:10 Italy BOT auction

Oct 28 19:00 US 2Y Note auction

Oct 29 12:03 Sweden Bond auction

Oct 29 12:30 Germany Eur 4.0bn Aug 2024 Bund auction

Oct 29 17:30 US 2Y FRN auction

Oct 29 19:00 US 5Y Note auction

Oct 30 12:10 Italy BTP/CCTeu auctions

Oct 30 19:00 US 7Y Note auction