The broad markets produced a day of range trading on Wednesday as the after effects from the Bank of Japan’s intervention were digested along with continuing mixed data from a variety of international spheres. The USD languished against the EUR and GBP. The U.S. released disappointing Empire State Manufacturing Index results with a mark of 4.1 compared to the estimate of 8.7. Also the Industrial Production data was rather meek with a 0.2% gain, which was slightly below the forecast of 0.3%. Wall Street made some gains continuing its run since the beginning of the month, but it must be added that its performance has not exactly changed the prevailing cautious sentiment that exists. Today the weekly Unemployment Claims will be published and are anticipated to come in with a amount of 463k, which would be more than the previous week. Also the Philly Fed Manufacturing Index reading is on schedule and a slight gain is expected.
The EUR and GBP both maintained their gains made earlier this week and this was accomplished without a great deal of releases. CPI statistics met expectations practically head on and showed that Europe is mired with what could be termed stagnation. Today Europe will be quiet with data, but the U.K. will release Retail Sales and CBI Industrial Order Expectations. The numbers from the U.K. will give further insight into the minds of consumers who – like the public in the U.S. – are looked to as a gauge of future prospects. House Price Indexes from the U.K. have struggled again recently and this may have an effect on how consumers reach into their pocketbooks. The EUR and GBP have done well this week, but some of those gains may be based more on the sentiment that the U.S. government is considering other stimulus measures in order to create growth, this because fundamental data from the E.U. and U.K. have certainly not been spectacular.
The JPY traded in a swift range on Wednesday as it gets intense focus from near and afar after the announced intervention by the Bank of Japan. The question now becomes where and how the Japanese government will find a comfortable value for the JPY. It also becomes a trading scenario in which the government may find itself battling long term investors who still have a vested interest in the JPY. The intervention in some respects will become a war of attrition as short term traders are confronted with pressure. The AUD also traded in range on Wednesday, but this has more to do with a consolidated Gold price – and one that is at highs. Asian bourses have done well along with Wall Street since September has gotten underway and risk sentiment is the wheel that is driving these values.
Written by bforex.com
