Financial markets remain sleepy, although data and news flow has started to pick up. Continue reading →

Asian markets remained in a holiday mood overnight and FX flows were extremely light. News flow too was thin and Japanese economic data was second-tier and not market-moving. USDCNY fixed at a new low, but the adjustment on the previous fixing was minor, and the headline failed to attract much attention. EURUSD traded 1.3043-1.3077 and USDJPY 77.90-78.03. Continue reading →

The Wall Street Journal reports that the Fed is reconsidering the policy rate guidance it provided in August – when it signalled that rates would likely stay at zero until mid-2013 Continue reading →

The EUR has managed to avoid further losses during the Asia session but it is clear that it will take more than a blast of liquidity by the ECB to change the overall picture for the currency. In addition, even if the funds do succeed in preventing massive deleveraging by banks and protect financial stability, the perceived debasement of the currency, albeit temporary, means the euro will need to continue declining on a structural basis. Continue reading →