MORNING BRIEFING: Volatile price action in EURCHF and USDCHF; SNB declines to comment

[RTFX-Trading]

MORNING BRIEFING: Volatile price action in EURCHF and USDCHF; SNB declines to comment

What’s new:
Switzerland: EURCHF and USDCHF price action suggests SNB was in the market. SNB declined to comment.
Euro-zone: ECB refinancing operation at €75B, below expectations of €100-150B.
Euro-zone: Commissioner Almunia came out and said the Euro group will discuss the Euro appreciation.
United States: Chicago PMI disappoints, at 46.1 against forecast for 52.0.
United States: FED Official Lockhart says FOMC members have differing opinions on the speed of FED policy reversal.
United States: Stronger than expected GDP in Q2, down to -0.7% versus expected -1.2%.
United States: Weaker than expected ADP report at -254K versus market expectations of -200K.

Today:


Overnight Rates and Indices:
EURUSD: 1.4668 – 1.4569.
USDCHF: 1.0406 – 1.0338.
GBPUSD: 1.6011 – 1.5925.
EURJPY: 131.81 – 131.08.
USDJPY: 90.07 – 89.66.
DowJones: 9'712.28 -0.31%.
NASDAQ: 2’122.42 -0.08%.
S&P 500: 1’057.08 -0.33%.
Nikkei: 9’968.99 -1.62%.
Shanghai: 2’779.43 +0.90%,
Gold: $1004.84.
Crude Oil: $69.94.
 
Comments:

The movements in the FX market in EURCHF and USDCHF suggested that the SNB intervened in the market. However the central bank refused to comment. If this is the case such a move is consistent with their policy objectives and gives the bank more credibility. The price action coincided with a 12-month ECB refinancing operation, for a second time this year.

European Commissioner Almunia, said that the Euro’s appreciation will be discussed by the Euro group and will take a position in time for G7 meeting ahead. This follows recent comments by ECB President Trichet, who said last week that a strong Dollar is extremely important for the global economy. Also, the European commission and national governments have been expressing their concerns over the strength of the Euro in recent weeks.

Yesterday, a weaker than expected ADP report was offset by stronger GDP for Q2, while Chicago PMI disappointed coming in lower than expected. The EURUSD traded sideways after these 2 events. Fed Officials Kohn and Lockhart both said that low rates are to be expected for an extended period of time, while Lockhart added that FOMC members have different opinions on the speed of FED policy reversal. Today, US Personal income and spending, along with important PCE deflator release and weekly jobs report are expected at 14:30 CET.
Have a nice day.

Emman Xuereb
RTFX Ltd
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