Riksbank To Decide
Investors had three news items to digest overnight as the count down to today’s Riksbank decision continued. First, the RBA’s December minutes struck a fairly balanced tone, and added little new info beyond the contents of the original policy statement. Second, USDJPY briefly flickered to life after reports that BoJ Governor Shirakawa was about to meet Japan’s Prime Minister-elect Abe. Shirakawa declined to comment in detail afterwards though except to say that monetary policy was not discussed. Finally, both sides in the US fiscal cliff debate appear to be shuffling closer together. The latest gestures towards compromise reinforce our conviction that a deal can still be done to avert what should be a perfectly-avoidable US recession. It would be wise to expect a significant boost to global risk appetite once final agreement is reached at some point over the next few weeks. Overnight EURUSD traded 1.3156-1.3172 and USDJPY 83.76-84.08.
Click here to read the full report: UBS Morning Adviser Europe
UBS Investment Bank