The story of the day was a stabilization in ‘risk’ after the trashing it received in Europe and the US yesterday and a Tokyo afternoon USD/JPY short squeeze on the back of some comments from the Japanese opposition leader Abe.
Data/announcements:
- NZ Business PMI +2 to 50.5
- Australian New Motor Vehicle Sales -2.8% for October (vs. +4.7% prior)
- (Please note some Eco Calendars are showing Wpac Consumer Sentiment released, but that was on the 14th, not today – see yesterday’s wrap https://www.forexlive.com/blog/2012/11/14/forexlive-asian-wrap-14nov-kiwi-knocked-lower-early/ )
San Francisco Fed President John Williams gave a speech, many of his points being reported. He is a known dove, and made dovish noises but little really new and not market moving to any great extent:
- Proposes replacing Op Twist with expanded QE3 to asset buys continue at $85B/mth
- likely continue needing to purchase MBS & treasuries well into 2nd half of 2013
The new Chinese Politburo was named,
- Xi Jinping new General Secretary, to become President in March
- Li Keqiang to become Premier in March
The big mover in the Tokyo afternoon was USD/JPY.
- With the election expected on Dec. 16 (though its not official yet), electioneering has begun: Japanese Opposition Leader Abe was reported as saying he wants to work with BOJ to reverse strong Yen trend & to revive the economy (and other comments, here).
- About 10 minutes after we reported his comments the market soaked up some long positions and then went after the shorts, taking USD/JPY up to around 80.70.
- Further comments from Abe ( wants the BOJ to set rates at or below zero to enhance lending) were then latched onto to send USD/JPY above 80.80.
AUD/USD had a test below 1.0360 late-morning Sydney time, with much chat about stops below there. The level was rejected, though; after a 100+ point fall in less than 24 hours there were plenty of shorts keen to cover into the stop-loss selling, taking it higher for the balance of the day into resistance around 1.0380.
