A bid for risk ahead of the ECB meeting
What happened overnight
– Riksbank surprises market with a 25bp cut to 1.25%
– Australia reports 8.8K decline in employment in August
– Bank Negara Malaysia left rates and guidance unchanged
– Bank of England left rates and asset purchases unchanged
Markets were in risk on mode ahead of the ECB meeting, with equities in positive territory, weaker USD and sovereign spreads trading tighter on the day. EURUSD held on to yesterday’s gains overnight trading as high as 1.2635. AUDUSD is 0.5% higher at 1.0244, in spite of the drop in employment data reported overnight, as markets rather focused on the decline in the unemployment rate. Antipodeans and risk-sensitive currencies are generally stronger against both the USD and, most notably, against the euro overnight, with EURAUD and EURCAD trading below yesterday’s close. EURSEK is the exception at roughly unchanged levels, having spiked up to 8.55 following the unexpected Riksbank rate cut.
Click here to read the full report: FX Daily
Credit Suisse