[B]Market Review[/B] - 22/09/2013 [I]23:24GMT[/I]
[B]Dollar rises against yen on hawkish comments from Fed’s Bullard[/B]
The greenback strengthened against yen on Friday after St. Louis Fed President James Bullard said it is possible to taper stimulus measures in October, depending on U.S. economic data.
Versus the Japanese yen, although the greenback dropped briefly to 99.17 in Asian session, the pair traded narrowly in Europe but then pierced through Thursday’s high at 99.63 to 99.67 in New York morning due to the comments from Fed’s Bullard as he said policy changes were possible at the Fed’s October meeting depending on U.S. economic data.
St. Louis Fed President James Bullard said ‘the transparency cat is out the bag" for the Fed; increase in rates over the summer was “a surprise” for many FOMC; don’t want to lose the focus on inflation; we should defend our inflation target from the low side; October meeting is live, policy changes possible depending on U.S. economic data.’
The single currency traded narrowly in Asia as several centres in the Far East were closed for holiday. Although price edged higher briefly to 1.3549 in European morning, euro then ratcheted lower to 1.3507 in New York morning, price later dropped to session low at 1.3498 in New York morning on dollar’s broad-based strength before cross-buying of euro lifted price back to 1.3537.
Although the British pound edged higher from Thursday’s low at 1.6022 in Asia and climbed to 1.6067 in European morning, renewed cross selling of sterling versus euro and yen pressured the pair below 1.6022 to 1.5990 and then marginal lower to 1.5986 in New York morning before staging a recovery to 1.6027 later in the day.
In other news, BoJ governor Kuroda said ‘BoJ will maintain aim of QE for as long as needed to stably achieve 2% inflation’; ‘hope to offset upward pressure on JGB yields from Japan’s economic improvement; Japan’s domestic demand likely to remain strong, economy steadily heading toward meeting BoJ price goal.’ Italy Economic Minister Saccomanni said ‘lower yields depend on political stability, continued reforms; important slight overshoot in 2013 deficit is corrected quickly; risks to growth recovery are fiscal slippage, lack of reforms, high yields, political instability.’
On the data front, U.K. PSNB and PSNCR came in at 11.5B and -3.0B, versus the forecast of 11.09B and 5.2B respectively. Eurozone consumer confidence came in at -14.9, weaker than the forecast of -14.5.
[B]Data to be released next week : [/B]
China HSBC manufacturing PMI, France service PMI, manufacturing PMI, Germany Service PMI, manufacturing PMI, EU service PMI, manufacturing PMI, U.S. Chicago Fed index, Markit PMI on [B]Monday[/B]. Japan’s financial markets will be closed due to public holiday.
U.K. BBA mortgage approvals, Germany IFO business climate, current assessment, Canada retail sales, U.S. retail sales, house price index, S&P house price index, consumer confidence on [B]Tuesday[/B].
New Zealand trade balance, exports import, Japan machine tool orders, Swiss consumption indicator, France business climate, Italy consumer confidence, U.K. CBI distributive trades, U.S. durable goods, new home sales on [B]Wednesday[/B].
France consumer confidence, U.K. current account, GDP, U.S. GDP, PCE core, jobless claims, personal consumption, pending home sales on [B]Thursday.[/B]
Japan CPI, U.K. consumer confidence, business barometer, France GDP, Swiss leading indicator, EU business climate, economic sentiment, consumer confidence, Germany CPI, HICP, U.S. personal income, personal spending, PCE , University of Michigan consumer confidence on [B]Friday[/B].