Developed macro
1. Solid French and Spanish bond auctions as well as the strong US ISM Manufacturing PMI failed to uphold Optimism
2. Today focuses will be on Merkel’s speech (see below) and the US non-farm payrolls.
3. Chancellor Merkel to give a speech to the German parliament today, ahead of a critical week for the Eurozone.
4. Japan’s real GDP will likely be revised down based on corporate survey in Jul-Sep.
Interest rate strategy
1. Today’s data poses a potential threat to the recent downward move in core bond yields, notwithstanding a supportively dovish stance from the ECB. Any weaker surprises, though, would open the way to bullish flattening.
2. Expect the steady patter of policy statements by German politicians and the ECB to continue to sway the Euro bond markets.
FX strategy
1. After failing to break its 4 October high the USD index looks set to slip further in the short term.
2. EUR bought on expectations of major policy announcements but any rally is likely to prove short lived.
3. AUD’s ultra sensitivity to risk proves a benefit over recent days, with resistance seen around 1.0351 versus USD.
Emerging markets
1. Mexico to stay put on rates
2. Industrial output to decelerate in Brazil
Click here to read the full report:
http://www.easyforexnews.net/wp-content/uploads/2011/12/WMT_2011-12-02.pdf
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