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Central banks governors moving the market

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#1 ⇑ Haut ⇑ 28-02-2013 09:59:43

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Central banks governors moving the market

Morning Briefing : Central banks governors moving the market

What’s new:
Forex: Haruhiko Kuroda officially nominated governor of the Bank of Japan 
Global Markets: US and Asian equities closed in the green

Overnight rates and Indices:
EUR/USD     1.3129         1.3162           0 %
USD/CHF      0.9281        0.9306        -0.04 %
GBP/USD     1.5157         1.5177         0.04 %
USD/JPY       92.17           92.67          -0.18 %
EUR/CHF      1.2207        1.22253      -0.05 %
EUR/JPY       121.04        121.83        -0.19 %
Dow Jones    13880.19    14104.86    1.26 %
Nasdaq           2710.19     2757.61      1.04 %
S&P 500        1494.88      1520.08      1.27 %
Nikkei 225    11392.56     11563.75     2.71 %
Shanghai       2308.92       2365.95      2.04 %
Gold spot      1595.91       1602.69       0.20 %
Crude Oil      92.78            93.18           0.05 %

Yesterday, Ben Bernanke held his second semi-annual testimony. According to him the economy shows signs of recovery “The fact that interest rates have gone up a bit is actually indicative of a stronger economy,” he said. Despite his optimistic speech he has not been able to give a clear schedule to revisit his monetary exit plan and dismissed it with “sometime soon” - which shows how difficult it will be to find a suitable exit plan without hurting further the American economy by growing its Balance Sheet. Anyway, the market jumped higher again and the Dow rose to a 5-year high.

Back in Europe, Mario Draghi’s much awaited speech held in Munich moved the market as well. It was interesting to notice how different his style is compared to his American homologue. Indeed, his view on the state of the euro zone economy appears to be much more realistic. He pointed out that the European central bank is far from exit stimulus and that the unemployment in Europe is a “tragedy”.

Overnight, major news coming from Asia is the appointment of the new Bank of Japan Governor. Forex traders have not been surprised by the nomination of Haruhiko Kuroda. However the USD/JPY appears to have anticipated the nomination and rose the whole day before, this illustrates perfectly the “buy the rumour sell the fact” market rule.

Major events expected for the day are the Unemployment figures, and the Consumer Price Index coming from Germany and the Consumer Price Index for the euro zone.

Good day,

Vincent Pellizzari - Junior Trader - RTFX Ltd

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