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Market Review - 29/06/2013 01:05GMT
Dollar rises broadly on renewed anticipation of QE tapering
The greenback strengthened broadly on Friday as Federal Reserve Governor Jeremy Stein and Richmond Federal Reserve President Jeffrey Lacker said September will be a possible time to consider reducing the quantitative easing.
The single currency rebounded in Asia due to active cross buying of euro versus yen and reached 1.3076 in European morning but then retreated to 1.3041 after the release of German retail sales (0.8% m/m and 0.4% y/y, versus the forecasts of 0.2% and 0.6%). Later, although the rally in eur/jpy cros pushed the pair to 1.3103 in New York morning, dollar's broad-based strength after the hawish comments from Fed's Stein and Lacker pressured euro to session low of 1.2991 in New York morning before staging a recovery.
Fed's Stein said September could be an opportune time for Fed to consider reducing its stimulus measures. Fed's Lacker said 'September is one of the possible meeting at which Fed could taper bond purchases, but will depend on the data; market reaction since Bernanke press conference a sign that markets had over-estimated amount of bonds Fed would buy.'
Versus the yen, dollar traded with a firm undertone throughout the day. Price started to climb at Tokyo open and rose to 99.02 at Asian midday on improved risk appetites and the rally of Nikkei-225 index due to the better-than-expected Japan's economic data, including manufacturing PMI, industrial production and retail sales. Cross selling of yen versus euro together with dollar's broad-based strength pushed the pair to a 3-week high at 99.45 at U.S. midday before stabilising.
Japan's manufacturing PMI came in at 52.3 versus the previous of 51.5. Industrial production in May were released at 2.0% m/m and -1.0% y/y, versus the forecasts of 0.2% and -2.4%. Retail sales were 1.5% m/m and 0.8% y/y, much better than the expectations of 0.7% and 0.0% respectively.
Although the British pound rose briefly to 1.5279 in tandem with eur/usd at Asian midday, cross selling of sterling versus euro pressured the pound to 1.5226 in European morning. Dollar's broad-based strength knocked the pair below Thursday's low at 1.5201 to a fresh 3-week trough at 1.5165 in New York morning before stabilising.
On the data front, U.S. Chicago PMI in June came in at 51.6, worse than the expectation of 56.0. U.S. University of Michigan confidence in June came in at 84.1, better than the forecast of 83.0. German CPI in June came in at 0.1% m/m and 1.8% y/y, higher than the forecast of 0.0% and 1.7% respectively.
Data to be released next week :
Japan Tanken big manufacturing, non-manufacturing, China PMI manufacturing, HSBC manufacturing PMI, U.K. hometrack housing survey, manufacturing PMI, mortgage approvals, Swiss PMI, France manufacturing PMI, German manufacturing PMI, Italy unemployment rate, manufacturing PMI, EU manufacturing PMI, CPI, unemployment rate, U.S. manufacturing PMI, construction spending, ISM manufacturing on Monday. Hong Kong and Canada will be closed for holiday.
Australia rate decision, U.K. PMI construction, EU PPI, U.S. retail sales, durable goods, factory orders on Tuesday.
Australia new home sales, trade balance, retail sales, China non-manufacturing PMI, HSBC service PMI, Italy service PMI, France service PMI, Germany service PMI, U.K. service PMI, EU service PMI, retail sales, U.S. ADP employment, trade balance, jobless claims, non-manufacturing ISM, Canada trade balance, exports, imports on Wednesday.
Australia building approvals, Lloyds employment confidence, U.K. rate decision, asset purchase target, EU rate decision, U.S. Market holiday on Thursday.
Japan leading indicator, France trade balance, Swiss CPI, Germany factory orders, Canada unemployment rate, net change in unemployment, Ivey PMI, U.S. non-farm payroll, private payroll, unemployment rate, average hourly earning on Friday.
Dollar rises broadly on renewed anticipation of QE tapering
The greenback strengthened broadly on Friday as Federal Reserve Governor Jeremy Stein and Richmond Federal Reserve President Jeffrey Lacker said September will be a possible time to consider reducing the quantitative easing.
The single currency rebounded in Asia due to active cross buying of euro versus yen and reached 1.3076 in European morning but then retreated to 1.3041 after the release of German retail sales (0.8% m/m and 0.4% y/y, versus the forecasts of 0.2% and 0.6%). Later, although the rally in eur/jpy cros pushed the pair to 1.3103 in New York morning, dollar's broad-based strength after the hawish comments from Fed's Stein and Lacker pressured euro to session low of 1.2991 in New York morning before staging a recovery.
Fed's Stein said September could be an opportune time for Fed to consider reducing its stimulus measures. Fed's Lacker said 'September is one of the possible meeting at which Fed could taper bond purchases, but will depend on the data; market reaction since Bernanke press conference a sign that markets had over-estimated amount of bonds Fed would buy.'
Versus the yen, dollar traded with a firm undertone throughout the day. Price started to climb at Tokyo open and rose to 99.02 at Asian midday on improved risk appetites and the rally of Nikkei-225 index due to the better-than-expected Japan's economic data, including manufacturing PMI, industrial production and retail sales. Cross selling of yen versus euro together with dollar's broad-based strength pushed the pair to a 3-week high at 99.45 at U.S. midday before stabilising.
Japan's manufacturing PMI came in at 52.3 versus the previous of 51.5. Industrial production in May were released at 2.0% m/m and -1.0% y/y, versus the forecasts of 0.2% and -2.4%. Retail sales were 1.5% m/m and 0.8% y/y, much better than the expectations of 0.7% and 0.0% respectively.
Although the British pound rose briefly to 1.5279 in tandem with eur/usd at Asian midday, cross selling of sterling versus euro pressured the pound to 1.5226 in European morning. Dollar's broad-based strength knocked the pair below Thursday's low at 1.5201 to a fresh 3-week trough at 1.5165 in New York morning before stabilising.
On the data front, U.S. Chicago PMI in June came in at 51.6, worse than the expectation of 56.0. U.S. University of Michigan confidence in June came in at 84.1, better than the forecast of 83.0. German CPI in June came in at 0.1% m/m and 1.8% y/y, higher than the forecast of 0.0% and 1.7% respectively.
Data to be released next week :
Japan Tanken big manufacturing, non-manufacturing, China PMI manufacturing, HSBC manufacturing PMI, U.K. hometrack housing survey, manufacturing PMI, mortgage approvals, Swiss PMI, France manufacturing PMI, German manufacturing PMI, Italy unemployment rate, manufacturing PMI, EU manufacturing PMI, CPI, unemployment rate, U.S. manufacturing PMI, construction spending, ISM manufacturing on Monday. Hong Kong and Canada will be closed for holiday.
Australia rate decision, U.K. PMI construction, EU PPI, U.S. retail sales, durable goods, factory orders on Tuesday.
Australia new home sales, trade balance, retail sales, China non-manufacturing PMI, HSBC service PMI, Italy service PMI, France service PMI, Germany service PMI, U.K. service PMI, EU service PMI, retail sales, U.S. ADP employment, trade balance, jobless claims, non-manufacturing ISM, Canada trade balance, exports, imports on Wednesday.
Australia building approvals, Lloyds employment confidence, U.K. rate decision, asset purchase target, EU rate decision, U.S. Market holiday on Thursday.
Japan leading indicator, France trade balance, Swiss CPI, Germany factory orders, Canada unemployment rate, net change in unemployment, Ivey PMI, U.S. non-farm payroll, private payroll, unemployment rate, average hourly earning on Friday.
