MORNING BRIEFING: SNB keep rates unchanged; Will continue to intervene in Forex market when necessary

[RTFX-Trading]

MORNING BRIEFING: SNB keep rates unchanged; Will continue to intervene in Forex market when necessary

What’s new:
Euro zone: Trade Surplus widens.
United Kingdom: Weaker retail sales hurt Sterling.
United States: Housing starts rise, come in at 598K in August against 589K in July.
United States: Weekly jobless claims lower than forecast, but continuing claims rise.
Switzerland: SNB keep rates on hold, increase growth forecast and will continue to intervene in the Forex market when necessary.

Today:


Overnight Rates and Indices:
EURUSD: 1.4748 – 1.4695.
USDCHF: 1.0318 – 1.0279.
GBPUSD: 1.6454 – 1.6357.
EURJPY: 134.36 – 133.59.
USDJPY: 91.42 – 91.00.
DowJones: 9'783.92 -7.79%.
NASDAQ: 2’126.75 -0.30%.
S&P 500: 1’065.49 -0.31%.
Nikkei: 10’372.80 -0.69%.
Shanghai: 3’013.78 -1.52%,
Gold: $1,012.85.
Crude Oil: $72.06.
 
Comments:

The US Dollar failed to make any significant gains overnight despite weaker Asian equity markets. Following consecutive days where markets registered gains, investors chose to take a step back ahead of a relatively quiet day in terms of economic data. EURUSD traded in a tight range overnight from 1.4695 – 1.4748.

The Sterling came under pressure overnight following news that a major bank has failed to raise enough capital to qualify for the asset protection scheme. Retail sales figures failed to meet expectations as they came in flat for the month against an expected increase of 0.1%.  Today, the market will be looking at Public Sector Finance figures and crucial MP4 figures, as a further decline would put more pressure on the MPC members who are pushing for further asset purchases. Weak results would strengthen their claim for another expansion in asset purchases.

The SNB, as expected, held rates unchanged at 0.25%. They also said that they will continue their current course of monetary policy. The SNB confirmed that they will continue to counter the Swiss franc’s appreciation when necessary. They increased the inflation forecasts in the long term firmly and also increased growth outlook.

Have a good weekend.

Emman Xuereb

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