28 Nov 2014
Central Banks and Payrolls once again – FXStreet
FXStreet (Barcelona) - Valeria Bednarik, Chief Analyst at FXStreet, notes that disappointments triggered by weak US data were not enough to put majors in reverse mode, and observes soft US data as an indication towards a release of not so bright US NFP readings next week.
Key Quotes
“Next week action will start as soon as Sunday, with the Swiss Referendum on “Save Our Swiss Gold.” Basically, the proposal looks to increase the Central Bank’s gold holdings reserves from current 7% up to a 20%. Investors hold on their toes as if the “YES” wins, the metal will likely soar, whilst a winning “NO” will not only send it to multiyear lows, but also favor some dollar gains across the forex board.”
“As for the ECB, European ominous inflation readings these days suggests “something” should be done: German monthly inflation printed 0.0% erasing the positive mood earlier up ticking data generated over the country; Spain inflation went down to -0.5%, while EZ YoY readings remained at its lows of 0.3%.”
“My take is that Super Mario will once again offer a strong jawboning on unity and further measures available, but do nothing: EUR reaction will then depend on how much the market believes him, and for how long: if at some point, saying first quarter of 2015, QE remains in blur, the EUR/USD may finally post a strong upward correction after months of decline. In the shorter term, any spike higher in the pair after ECB up to 1.2560, should only be seen as a selling opportunity.”
“Soft US data this month, with consumer spending posting a modest gain in October and a measure of business spending plans falling for a second straight month, suggest some slowing in the pace of economic growth and pointing for US NFP readings on Friday may be not as bright as lately.”
“October reading missed expectations printing 214K but unemployment rate fell down to 5.8%:expected at 228K, it will take a reading around 240K and a steady unemployment rate to trigger a strong upward momentum in the greenback, yet another month of missed numbers or a reading below 200K, probably being the kick start of profit taking of dollar latest’s gains.”
Key Quotes
“Next week action will start as soon as Sunday, with the Swiss Referendum on “Save Our Swiss Gold.” Basically, the proposal looks to increase the Central Bank’s gold holdings reserves from current 7% up to a 20%. Investors hold on their toes as if the “YES” wins, the metal will likely soar, whilst a winning “NO” will not only send it to multiyear lows, but also favor some dollar gains across the forex board.”
“As for the ECB, European ominous inflation readings these days suggests “something” should be done: German monthly inflation printed 0.0% erasing the positive mood earlier up ticking data generated over the country; Spain inflation went down to -0.5%, while EZ YoY readings remained at its lows of 0.3%.”
“My take is that Super Mario will once again offer a strong jawboning on unity and further measures available, but do nothing: EUR reaction will then depend on how much the market believes him, and for how long: if at some point, saying first quarter of 2015, QE remains in blur, the EUR/USD may finally post a strong upward correction after months of decline. In the shorter term, any spike higher in the pair after ECB up to 1.2560, should only be seen as a selling opportunity.”
“Soft US data this month, with consumer spending posting a modest gain in October and a measure of business spending plans falling for a second straight month, suggest some slowing in the pace of economic growth and pointing for US NFP readings on Friday may be not as bright as lately.”
“October reading missed expectations printing 214K but unemployment rate fell down to 5.8%:expected at 228K, it will take a reading around 240K and a steady unemployment rate to trigger a strong upward momentum in the greenback, yet another month of missed numbers or a reading below 200K, probably being the kick start of profit taking of dollar latest’s gains.”