The Morning Briefing is prepared daily at the start of the European Trading session by RTFX’s trading desk. It presents a roundup of the major news headlines occurring within the global economy that may affect the forex market. This news bulletin also includes a view of our forex calendar for the day, highs and lows achieved in the previous sessions from the forex market, global indices and commodities and brief commentary about the economic headlines.
Morning Briefing for Wednesday, 11 Apr 2012 (Updated 09:02:22 CET)Prospects of more easing hurts yen
Forex: Yen falls on prospects of more stimulus by BOJ; Aussie recovers from 3-month low
Global Markets: Global shares extend declines as Europe’s debt crisis seen worsening
Euro zone: Bond yields rise sharply; Spain’s 10yr yields soar to highest since December 12th
Euro zone: Italy scheduled to sell €11 bln bills today
United States: Fed Vice-Chairman Yellen to speak today
Forex rates in Asia and Indices:
EUR/USD 1.3067 - 1.3116 0.24 %
USD/CHF 0.9162 - 0.9195 0.22 %
GBP/USD 1.5852 - 1.591 0.28 %
USD/JPY 80.62 - 80.95 -0.30 %
EUR/CHF 1.2012 - 1.2018 -0.01 %
EUR/JPY 105.45 - 106.15 -0.54 %
Dow Jones 12710.56 - 12929.59 -1.65 %
Nasdaq 2688.21 - 2749.51 -1.63 %
S&P 500 1357.38 - 1383.01 -1.70 %
Nikkei 225 9388.14 - 9487.84 -0.83 %
Shanghai 2280.03 - 2319.05 0.13 %
Gold spot 1653.55 - 1660.7 -0.06 %
Oil Future 100.84 - 101.38 0.22 %
The Japanese yen dipped against its major rivals on Wednesday on expectations of more monetary easing by the Bank of Japan after yesterday’s apparent inaction. The yen dipped after a strong rally yesterday as forex investors favored its ‘safety’ over fears that Europe’s debt crisis was worsening.
Global share markets tumbled as risk was ‘off’ across the board. European stock markets plummeted with Italy’s MIB and Spain’s IBEX35 dropping 5 and 3 percent respectively, to lows not seen since March 2009. The apparent inability of Spain’s fiscal austerity measures to calm bond market pressures was giving reasons for concern, which drove Spanish and Italian yields soaring.
Spain’s 10-year yields hit 5.99 percent, their highest since December 12th. Italy’s 10-year yields jumped 23 basis points to 5.69 percent, the highest since February 17th. Italy is expected to sell up to €11 billion in 91 and 361-day bills today and hold an auction of long-term debt tomorrow.
Riskier assets recovered slightly overnight, as investors cut back on their short positions. Risk appetite got a boost from an advance in S&P 500 futures and better than expected data out of Australia and New Zealand. The Aussie hit a 3-month low earlier versus the US dollar as it tracked commodity prices lower. AUD/USD recovered to 1.0299 from 1.0226 and is up almost 0.40 percent, while NZD/USD rose to 0.8178 following a 0.80 percent dip yesterday as forex traders were buying back the Aussie and kiwi.
USD/JPY inched closer to a fresh 1-month low earlier today by 80.62 but recovered to 80.94 on speculation that the BOJ will add more stimulus in its April 27th meeting. The pair should find support around 80.50 – 80.55, represented by March lows and the 50-day moving average. EUR/USD hovered close to multi-week lows late yesterday and earlier today on sovereign debt fears. It fell to 1.3054 yesterday but is up to 1.3115 today.
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