6 Mar 2014
European Open: Everything on the table for ECB decision
FXStreet (London) - The yen fell to a two-week low overnight after the Japanese Government Pension Investment Fund advisory panel said that it no longer needed to focus on domestic yen-denominated bonds given the strengthening inflationary environment.
The GPIF stands at JPY128.6 trillion, the world’s largest investment fund. The prospect of a move out of JGBs and into foreign assets (primarily dollar-denominated) will be supportive for USD/JPY. However, the pair remains subdued ahead of Friday’s non-farm payroll report numbers, given the recent trend of weak NFP data.
The Aussie dollar climbed for a fourth straight day after retail sales numbers beat expectations, up 1.2 percent, while the trade surplus ran at its widest in more than two years. The trade surplus widened to AUD1.43bn, the widest since August 2011, compared to consensus expectations of just AUD100m.
French unemployment numbers released this morning finally showed some improvement, declining from 10.9 percent to 10.2 percent in the final quarter of 2013 according to French statistics agency Insee.
The main focus today falls on the European central bank monetary policy statement and press conference scheduled for 13:30 GMT. The most likely scenario is that the central bank will hold rates, however, there are a raft of possibilities, none of which can be ruled out. Negative deposit rates and another LTRO are among measures that have been mooted, however the ECB may hold off until further deteriorating data before doing anything drastic.
The Bank of England decision today should be a non-event, with rates held at 0.5 percent and no change in asset purchases and no accompanying statement.
US markets remain focussed on tomorrow’s non-farm payroll statistics, where consensus expectations are for some strengthening to 150k after recent misses.
The GPIF stands at JPY128.6 trillion, the world’s largest investment fund. The prospect of a move out of JGBs and into foreign assets (primarily dollar-denominated) will be supportive for USD/JPY. However, the pair remains subdued ahead of Friday’s non-farm payroll report numbers, given the recent trend of weak NFP data.
The Aussie dollar climbed for a fourth straight day after retail sales numbers beat expectations, up 1.2 percent, while the trade surplus ran at its widest in more than two years. The trade surplus widened to AUD1.43bn, the widest since August 2011, compared to consensus expectations of just AUD100m.
French unemployment numbers released this morning finally showed some improvement, declining from 10.9 percent to 10.2 percent in the final quarter of 2013 according to French statistics agency Insee.
The main focus today falls on the European central bank monetary policy statement and press conference scheduled for 13:30 GMT. The most likely scenario is that the central bank will hold rates, however, there are a raft of possibilities, none of which can be ruled out. Negative deposit rates and another LTRO are among measures that have been mooted, however the ECB may hold off until further deteriorating data before doing anything drastic.
The Bank of England decision today should be a non-event, with rates held at 0.5 percent and no change in asset purchases and no accompanying statement.
US markets remain focussed on tomorrow’s non-farm payroll statistics, where consensus expectations are for some strengthening to 150k after recent misses.