29 Apr 2015
FX markets mixed ahead of FOMC, European bonds weaker – TDS
FXStreet (Barcelona) - Paul Fage, Senior Emerging Markets Strategist, TD Securities summarizes the market performance during the European trade, commenting on the G10 FX, EM FX, European bonds and equity space.
Key Quotes
“Ahead of the release of an expected weak Q1 US GDP print and the FOMC later today, FX markets are mixed. Against USD, SEK, EUR, and GBP are up, while JPY, AUD and NZD are down. The Riksbank left its policy rate on hold, in line with our forecast, but with the consensus expecting some easing. EURSEK is down about 1%.”
“European bonds are all weaker, catching up with yesterday’s US Treasury sell-off. 10y bunds +7.5 bps, 10y gilts +7.0 bps, but 10y UST unchanged. The weakness in bunds is a continuation of the first real post-QE sell-off, which started last week. This has now taken bunds back into the 0.15-0.30% range we expect them to trade in during Q2.”
“European equity markets are mixed, with the Dax and FTSE little changed on the day. Brent Oil is down 0.15%. Base and precious metals are weaker.”
“In EM FX, RUB and THB are the clear underperformers. USDRUB is up 0.55% as exporters buying of the ruble to cover tax payments subsides, and the market awaits tomorrow’s CBR meeting where at least 100 bps of cuts are expected.”
“In Thailand the CB cut its key rate by 25 bps to 1.5%, while the consensus was for no change. USDTHB is up 0.65%. In spite of the Indonesian stock market falling sharply following the executions of foreign nationals, IDR is one of the best performing EM currencies, up 0.45% against USD.”
Key Quotes
“Ahead of the release of an expected weak Q1 US GDP print and the FOMC later today, FX markets are mixed. Against USD, SEK, EUR, and GBP are up, while JPY, AUD and NZD are down. The Riksbank left its policy rate on hold, in line with our forecast, but with the consensus expecting some easing. EURSEK is down about 1%.”
“European bonds are all weaker, catching up with yesterday’s US Treasury sell-off. 10y bunds +7.5 bps, 10y gilts +7.0 bps, but 10y UST unchanged. The weakness in bunds is a continuation of the first real post-QE sell-off, which started last week. This has now taken bunds back into the 0.15-0.30% range we expect them to trade in during Q2.”
“European equity markets are mixed, with the Dax and FTSE little changed on the day. Brent Oil is down 0.15%. Base and precious metals are weaker.”
“In EM FX, RUB and THB are the clear underperformers. USDRUB is up 0.55% as exporters buying of the ruble to cover tax payments subsides, and the market awaits tomorrow’s CBR meeting where at least 100 bps of cuts are expected.”
“In Thailand the CB cut its key rate by 25 bps to 1.5%, while the consensus was for no change. USDTHB is up 0.65%. In spite of the Indonesian stock market falling sharply following the executions of foreign nationals, IDR is one of the best performing EM currencies, up 0.45% against USD.”