Analysis and Recommendation: The USD/JPY kept pace with the declines in the greenback. The pair lost 8 points to trade at 122.77 as the dollar declined 8
The USD/JPY kept pace with the declines in the greenback. The pair lost 8 points to trade at 122.77 as the dollar declined 8 points in the Asian session. Surveys show that around 90% of primary dealers and economists expect the Fed to raise interest rates in the middle of December. Over the past month, the two-year US note yield has risen by nearly 37 bp to 91 bp.
The implied yield of the December Fed funds futures contract has risen by 4.5 bp to 21.5 bp at the close before the weekend. It is the highest yielding close in more than a month. It fully discounts a 25 bp rate hike, IF one assumes that the effective Fed funds rate will average 30 bp. To drive home the point that the cycle will be limited and proceed gradually, the Fed may provide sufficient liquidity to keep the Fed funds rate below the midpoint.
The Japanese government will soon announce a basic budget policy that will take a steady step forward on fiscal reconstruction, sources said. The government will basically maintain its plan to curb a rise in general expenditures in the three years from fiscal 2016, which starts in April, to about ¥1.6 trillion, the sources said.
The basic budget policy will state that the government will finance measures for key policy measures of the administration of Prime Minister Shinzo Abe with the fiscal 2016 main budget as well as a supplementary budget for fiscal 2015, the sources said.
TCW Group Inc. says the Bank of Japan has made a mistake and should exit quantitative easing as soon as possible. Invesco Ltd. says the only error was not starting sooner.
The split in views at the funds, which manage a combined $971 billion, comes as BOJ Gov. Haruhiko Kuroda kept monetary policy unchanged Thursday and his board said inflation expectations seem to be rising. TCW is among critics that say easing has only served to artificially inflate asset prices above what is merited by the real economy, and the longer it continues, the bigger the eventual crash. TCW recommends buying sovereign debt as a haven, while Invesco says sell.
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 up to the data analysis and information in our weekly reports.
Today’s economic releases:
Cur. |
Event |
Actual |
Forecast |
Previous |
|||
EUR |
German GDP (QoQ) (Q3) |
|
0.3% |
0.3% |
|
||
EUR |
German GDP (YoY) (Q3) |
|
1.8% |
1.8% |
|
||
EUR |
ECB’s Costa Speaks |
|
|
|
|
||
EUR |
German Business Expectations (Nov) |
|
104.0 |
103.8 |
|
||
EUR |
German Current Assessment (Nov) |
|
112.4 |
112.6 |
|
||
EUR |
German Ifo Business Climate Index |
|
108.2 |
108.2 |
|
||
AUD |
RBA Governor Stevens Speaks |
|
|
|
|
||
USD |
GDP (QoQ) (Q3) |
|
2.1% |
1.5% |
|
||
USD |
GDP Price Index (QoQ) (Q3) |
|
1.2% |
1.2% |
|
||
USD |
Goods Trade Balance (Oct) |
|
-61.80B |
-58.63B |
|
||
USD |
S&P/CS HPI Composite – 20 n.s.a. (YoY) |
|
5.1% |
5.1% |
|
||
USD |
CB Consumer Confidence (Nov) |
|
99.5 |
97.6 |
Upcoming Economic Events that you should be monitoring:
Tuesday, November 25, 2015
Cur. |
Event |
Actual |
Forecast |
Previous |
|||
USD |
API Weekly Crude Oil Stock |
|
|
-0.482M |
|
||
JPY |
Monetary Policy Meeting Minutes |
|
|
|
|
||
AUD |
Construction Work Done (QoQ) (Q3) |
|
-2.1% |
1.6% |
|
||
GBP |
BBA Mortgage Approvals |
|
45.5K |
44.5K |
|
||
AUD |
RBA Assist Gov. Debelle Speaks |
|
|
|
|
||
USD |
Core Durable Goods Orders (MoM) |
|
0.3% |
-0.3% |
|
||
USD |
Durable Goods Orders (MoM) (Oct) |
|
1.5% |
-1.2% |
|
||
USD |
Initial Jobless Claims |
|
270K |
271K |
|
||
USD |
Personal Spending (MoM) (Oct) |
|
0.3% |
0.1% |
|
||
USD |
Services PMI (Nov) |
|
55.0 |
54.8 |
|
||
USD |
Michigan Consumer Sentiment (Nov) |
|
93.1 |
93.1 |
|
||
USD |
New Home Sales (Oct) |
|
500K |
468K |
|
||
USD |
Crude Oil Inventories |
|
|
0.252M |
|
||
USD |
Baker Hughes U.S. Rig Count |
|
|
564 |
Government Bond Auctions
Date Time Country
Nov 24 17:30 Italy Announces details of BTPs/CCTeu on 27 Nov
Nov 24 11:00 Holland Eur 1.0-2.0bn 0.25% Jul 2025 DSL
Nov 24 19:00 US 13bn 5-year note
Nov 25 11:03 Sweden Sek 4bn 1% Nov 2026 bond
Nov 25 11:10 Italy Auctions CTZ/BTPei
Nov 25 11:30 Germany Eur 3bn 1.0% Aug 2025 Bund
Nov 25 17:30 US Usd 35bn 2-year FRN
Nov 25 19:00 US Usd 29bn 7-year note
Nov 26 11:03 Sweden Sek 5bn 1% Nov 2026 bond exchange
Nov 27 11:03 Sweden 1.5% Nov 2023 bond exchange, 1% Nov 2026 bond exchange
Nov 27 11:10 Italy Auctions BTPs
Nov 27 N/A Spain Announces details of 03 Dec
Nov 30 11:03 Sweden Holds bond auction
Dec 01 11:30 UK 1.5% 2021 Gilt auction
Dec 02 16:30 Sweden Announces details of Bond on 11 Dec
Dec 03 10:30 Spain Auctions
Dec 03 10:50 France Auctions OATs
Dec 03 11:03 Sweden Holds I/L bond auction
Dec 04 11:03 Sweden Holds I/L bond auction