BOJ and RBA Chatter as Markets Open

BOJ and RBA Chatter as Markets Open

Early trades to begin the week have pushed the euro and Australian dollar slightly higher. The economic calendar is light around the world on Monday which will give markets a chance to digest a volatile first week of 2013. Weekly positioning data showed the euro held in a net positive position for the first time since Aug 2011. The link to the recording for Ashraf’s Pre-NFP webinar last week is listed below.

Early week chatter suggests the recent improvements in risk appetite and the global economy make it less likely that the RBA will follow through with a rate cut in 2013. That sentiment may be premature but it is underscoring Australian dollar strength as the week begins.

The yen is also under pressure after a report that the incoming Japanese government will introduce a supplementary budget of 12-13 trillion yen, more than the 10 trillion yen expected. There is also talk that the BOJ could introduce unlimited bond buys and that the government may not insist on a formally higher inflation target. The final headline risks sparking a round of profit taking in yen shorts.

Commitments of Traders

The moves in the weekly CFTC futures positioning data were tame with traders reluctant to put on positions at year end but the euro shifted to net long for the first time in 1.5 years.

EUR +5K vs -2K prior

JPY -81K vs -86K prior

GBP +36K vs +37K prior

AUD +80K vs +75K prior

CAD +66K vs +63K prior

NZD +17K vs +15K prior

The link to the recording for Ashraf’s Pre-NFP webinar with Fari Hamzei and George Cavaligos last week is here: http://www.hamzeianalytics.com/Educational_Webinars.asp