Sandy has an Echo
Thursdays US economic data slumped badly but Hurricane Sandy was the likely culprit. The euro was the best performer for the second consecutive day while the yen lagged badly. The Asia-Pacific calendar is bare except for a speech from the Feds Dudley who could hint that QE3 will be expanded to Treasuries in the new year. 1 of 2 USDJPY Premium Insights and the remaining CADJPY hit all targets. 5 new charts were added to last nights Premium Insights, including quarterly chart of USDJPY. Timing the new and existing EURUSD insights as well as new GBPUSD ideas. See more below.
US initial jobless claims surged to 439K compared to 375K expected but officials said that the superstorm was probably behind the surge, which was the largest in three years. Similarly, the Philly Fed fell to -10 from +5 due to manufacturing shutdowns in the area.
One slightly positive surprise was the Empire Fed, which was at -5.2 compared to -8 expected. US CPI figures were close to expected at +2.2% y/y.
It will be difficult to get an accurate reading on US economic data points in the coming weeks due to the hurricane.
The euro briefly topped 1.2800 but was capped by the 200-day moving average at 1.2811 and later slipped back to 1.2760. An implausible report suggesting Spain would bypass the OMT by going directly to the IMF was denied.
Rallies in the yen crosses were the dominant move for the second day, even with risk trades struggling. The market latched on to comments from LDP leader Abe who said that if he wins the election he will instruct the BOJ to do unlimited QE in order to beat deflation.
The USD/JPY rally stalled just short of 81.50, which is the 61.8% retracement of the March-September decline.
5 new charts were added to last nights Premium Insights, including quarterly chart of USDJPY. Timing the new and existing EURUSD insights as well as new GBPUSD ideas. Direct Access to today's Premium Insights is found here: http://ashraflaidi.com/products/sub01/access/?a=694 Non- subscribers can have a free trial here: http://ashraflaidi.com/products/
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