Risk was steady overnight heading into two crucial days’ worth of policy decisions. The official China PMI came in at 50.1 (cons. 50.3) overnight, barely an expansion but it appears markets were not overly concerned in light of signs the local economy is basing. The AUD held in a decent range as other factors are in play, such as G3 monetary policy. As such, all eyes are on the FOMC, though our view is that any further easing is far more likely at the September meeting, when we will see the new Summary of Economic Projections and a press conference by Chairman Bernanke. In the interim, the Fed will have two additional months of employment data to peruse, and the Jackson Hole conference at the end of August will provide Bernanke with a timely opportunity to prepare the market for any easing decision. As highlighted earlier this week, our economists are looking for a US-style emulation of the UK’s FLS scheme, and it would be possible for the Fed to provide some early hints of policy innovation in the coming weeks, though today’s decision may yet prove somewhat early. If, on the other hand, the phrasing of the statement only points towards conventional asset
purchases, the dollar could respond adversely per the market’s usual reaction function. However, we note that QE trades such as short USD vs. JPY and commodity names have already done well in recent weeks and appetite to add to these positions may be limited. The wider growth environment globally is far different compared to 2009 and 2010, while there is renewed skepticism over the efficacy of asset purchases when loan demand is an issue – precisely a new form of discount window action may be designed to address specifically. On the other side of the Atlantic, markets will be looking to Thursday’s ECB decision before deciding on their next steps. ECB President Draghi is expected to formally endorse bond purchases in some form – most likely through a reactivation of the SMP. Nonetheless, comments from German Finance Ministry and Bundesbank officials suggest that SMP reactivation is not a done deal, let alone the contentious issue of granting the ESM a banking license. On Tuesday, the positive US data surprises (May house prices up 0.9%; July Chicago PMI up to 53.7; July consumer confidence index up to 65.9) had little impact, with the focus clearly on the FOMC. Sweden, Norway, Germany, the UK, and the US all release PMI figures today.
purchases, the dollar could respond adversely per the market’s usual reaction function. However, we note that QE trades such as short USD vs. JPY and commodity names have already done well in recent weeks and appetite to add to these positions may be limited. The wider growth environment globally is far different compared to 2009 and 2010, while there is renewed skepticism over the efficacy of asset purchases when loan demand is an issue – precisely a new form of discount window action may be designed to address specifically. On the other side of the Atlantic, markets will be looking to Thursday’s ECB decision before deciding on their next steps. ECB President Draghi is expected to formally endorse bond purchases in some form – most likely through a reactivation of the SMP. Nonetheless, comments from German Finance Ministry and Bundesbank officials suggest that SMP reactivation is not a done deal, let alone the contentious issue of granting the ESM a banking license. On Tuesday, the positive US data surprises (May house prices up 0.9%; July Chicago PMI up to 53.7; July consumer confidence index up to 65.9) had little impact, with the focus clearly on the FOMC. Sweden, Norway, Germany, the UK, and the US all release PMI figures today.
كاتب المدونةahmed samir
ستتعلم فى هذه المدونة كل ما يخص تداول العملات والاقتصاد العالمى والاخبار الاقتصادية وتحليلها واقتصاد الدول والتداول فى سوق الفوركس من التحليل السعرى بإستخدام البرايس اكشن بدون اى مؤشرات مساعدة فى التداول فقط سنتاجر على حركة السعر ,اتمنى ان تشارك المدونة مع اصدقائك اذا اعجبتك ..
