30 Mar 2015
USD firm ahead of key data run – TDS
FXStreet (Barcelona) - While expecting the US data this week to picture a constructive outlook for the economy, FX Strategists at TD Securities note that USD might still eye a little softness in the next few weeks due to drop in volatility and bounce in commodities, to match the recent consolidative tone.
Key Quotes
“Fed Chair Yellen’s comments late Friday afternoon were fairly even-handed and really did not offer that much more insight into Fed thinking. At the margin perhaps her concession that rate rises might be needed later this year gives a little more support to the notion (our base case) that lift off can occur around September.”
“But the conclusion stressed data dependency and gave no impression that policy makers are in any sort of rush to tighten.”
“US 10Y yields had been easing into the comments but edged very marginally higher after the headlines hit the wires (yields are little changed around 1.95% currently).”
“For the week ahead, the mixture of month-end, the early-month data deluge from the US along with Easter and Passover holidays may make for a bumpy ride for the markets.”
“Broadly, the run of data from the US this week should look constructive and culminate in another solid NFP report—even if job growth slows from February’s 295k gain (we look for +220k, market +250k).”
“The majors traded in jittery fashion last week and pockets of illiquidity were notable. This is not helping traders and investors (or us) form a high level of conviction about where we go from here.”
“Overall, we still think odds favour a bit more USD softness, a bit more of a bounce in commodities and possibly a bit of a drop in vol in the next few weeks as recent market trends consolidate.”
Key Quotes
“Fed Chair Yellen’s comments late Friday afternoon were fairly even-handed and really did not offer that much more insight into Fed thinking. At the margin perhaps her concession that rate rises might be needed later this year gives a little more support to the notion (our base case) that lift off can occur around September.”
“But the conclusion stressed data dependency and gave no impression that policy makers are in any sort of rush to tighten.”
“US 10Y yields had been easing into the comments but edged very marginally higher after the headlines hit the wires (yields are little changed around 1.95% currently).”
“For the week ahead, the mixture of month-end, the early-month data deluge from the US along with Easter and Passover holidays may make for a bumpy ride for the markets.”
“Broadly, the run of data from the US this week should look constructive and culminate in another solid NFP report—even if job growth slows from February’s 295k gain (we look for +220k, market +250k).”
“The majors traded in jittery fashion last week and pockets of illiquidity were notable. This is not helping traders and investors (or us) form a high level of conviction about where we go from here.”
“Overall, we still think odds favour a bit more USD softness, a bit more of a bounce in commodities and possibly a bit of a drop in vol in the next few weeks as recent market trends consolidate.”