No interest-ing news but Non Farm Payrolls today
5 October, 2012
Yesterday saw both the Bank of England and the European Central Bank make their policy announcements for the month. As expected neither institution changed either their interest rates or their stimulus measures, and as such the markets didn’t show much reaction to either statement. The press conference with ECB president Mario Draghi proved a little more exciting though, with many of the questions relating to speculation on future interest rate moves, together with plenty of questions on the subject of bond buying schemes.
Many analysts expect the ECB might have to further cut interest rates in the coming months to help stimulate the Eurozone economy into growth, but some of the questions asked actually related to the possibility of interest rate rises, and while Graghi was fairly tight lipped on the possibilities, there is also a train of thought that interest rate moves would be moot as the possible changes are so small as to make limited impact. The bond buying schemes seem to be helping with many of the troubled states outlooks looking slightly better, and as a result the Euro has been making recent gains across the board notably against both Sterling and the US Dollar.
Those of you with a Euro purchase coming up, might want to consider the prospect of this trend continuing – further positivity about the Euro and negative UK data could well see us fall even further away from the 4 year highs we have recently enjoyed. A forward contract can help to secure a rate up to 2 years ahead, so it is definitely worth getting in touch with your CI account manager to discuss your options so you don’t lose out.
Today’s data is dominated by the Big One from the US, with Non-Farm Payrolls due out at lunchtime. This is a measure of the jobs creation in the US in the last month and is a key indicator of the US economy’s situation. Yesterday’s Federal reserve minutes showed that most members agreed on further Quantitative Easing and as a result the Dollar lost quite a bit of ground, today could well see the reverse of this situation. NFP has been less than impressive over the last few months and there is a feeling this could be the month to make up the shortfalls. If this does indeed come to pass expect a resurgent US Dollar. Are you buying Dollars soon? This morning could be your perfect window of opportunity. Currency Index are waiting to help you to take advantage.
Tonight is Currency Index’s bi-annual steak night. We will be going to an Argentine steak house to sample such delights as Asado de Chorizo. Unfortunately we cannot trade in Argentine Pesos, so we will have to pay in Sterling, but if you are looking to buy a ranch in Argentina don’t forget South American money transfers can generally be accepted US Dollars, so the window of opportunity is open to you too!
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