Forex Forecast

S&P SDs Greece (Again) At the Asia open Standard & Poor’s downgraded Greece to ‘selective default’ from CCC.

Sentiment Holds Firm Risk appetite recovered in earnest overnight as investors shrugged off some initial fears about downgrades in Europe and lack of progress in the fiscal cliff talks in the US.

RBA Cuts 25bp As expected, the RBA cut the cash rate to 25bp as expected, though our economists note that all the indications are that given the improvements in the non-mining economy, the RBA will probably stay on hold for now.

Sentiment Holds Firm A stronger sequential manufacturing PMI print out of China has managed steady markets for the time being, especially in the wake of Moody’s downgrade of the Eurozone’s rescue funds from AAA to Aa1.

BoJ Getting Restless? For at least the past two years the BoJ’s Policy Board has raised its bond purchase targets in an incremental fashion, gradually increasing the amount of easing applied.

Australian Miners To Spend Less The Australian dollar came under moderate selling pressure after Australia’s Q3 capex report was published overnight.

Chinese Stocks Driving FX Risk appetite suffered somewhat overnight on the back of weaker Chinese equities, which triggered some selling of USDJPY and cross-yen.

Europe Agrees On Greece Eurozone finance ministers finally reached agreement on redesigning Greece’s aid plan. The news was announced by Eurogroup Chair Juncker and IMF MD Lagarde – without any eye-rolling or press conference theatrics on this occasion.

Setback for Catalonian Independence The party of Catalonian President Mas actually lost twelve seats in the weekend regional elections − contrary to indications of pre-election opinion polls.

Abe Lists Priorities Activity was thin during the Asia session with Japan out on holiday. In addition to the limited trading session in the US, most pairs look set to hold on to this week’s ranges and it will likely be considered a rather decent period for risk, which navigated some potential slip-ups (mostly out […]

Confidence Despite Silence Markets remain less than concerned about the lack of agreement from Europe, with the euro actually managing to squeeze higher after the statements from Eurozone leaders on Wednesday suggest that sooner or later the job would be done.