Intraday Market Thoughts

Juncker Starts the Anti-Euro Jawbone

by Adam Button
Jan 16, 2013 0:24

The euro plunged after the Eurogroup leader lamented the 'dangerously high' euro on Tuesday. The single currency and the Swiss franc were the worst performers on the day while the yen rebounded after weeks of declines. An upexpected surge in Japanese machine orders has boosted risk trades early in Asia-Pacific trading.

The euro plunged 80 pips after the comments from Juncker, which were the first attempt to jawbone the currency lower in more than a year. It later recouped about half the declines to trade close to 1.3300.

Otherwise, US and early Asian trading was choppy with most currency pairs consolidating after the larger moves in Europe.

US economic data was a mixed bag. Core retail sales which exclude autos, gas and building supplies rose 0.6% compared to 0.3% expected. That was balanced by the Empire Fed manufacturing index which was forecast to be flat but fell 7.8 points.

The yen finished the day weak but all the declines were in Asia and Europe. With yen crosses near the lows of the day a report in Jiji said the BOJ will commit to a 2% inflation target, citing a draft agreement with the government. That helped USD/JPY rebound to 88.80 from 88.40.

Early in Asia, a strong reading on Japanese core machine orders boosted risk trades early in Asia. Orders jumped 3.9% in the month compared to a +0.3% reading expected.

The remainder of the session features Japanese household confidence data at 0500 GMT. The consensus estimate is for a 40.7 reading.

Act Exp Prev GMT
Retail Sales (DEC) (m/m)
0.5% 0.2% 0.3% Jan 15 13:30
Retail Sales (ex. Autos) (DEC) (m/m)
0.3% 0.2% 0.0% Jan 15 13:30
Retail Sales (NOV) (y/y)
3.3% 2.7% Jan 16 8:15
Consumer Confidence Index (DEC)
40.7 39.4 Jan 16 5:00

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