MORNING BRIEFING: Busy week ahead for USD, with FOMC minutes and retail sales scheduled and earnings from large banks expected.

[RTFX-Trading]

MORNING BRIEFING: Busy week ahead for USD, with FOMC minutes and retail sales scheduled and earnings from large banks expected.

What’s new:
United Kingdom: Brown plans to announce $4.8B asset sale.
Japan: BoJ meeting this week.
Euro zone: Trichet offers no comments on possible intervention from ECB to weaken the Euro.
United States: Fed’s Bullard says, ‘Don’t underestimate inflation risk’.
United States: Fed’ Kohn struck his usual hawkish note, stressed the importance of keeping inflation expectations low.
Canada: Much better than expected job numbers.
US Columbus day today, as well as holidays in Canada and Japan.

Today:


Overnight Rates and Indices:
EURUSD: 1.4743 – 1.4677
USDCHF: 1.0350 – 1.0304.
GBPUSD: 1.5883 – 1.5810.
EURJPY: 132.82 – 132.03.
USDJPY: 90.28 – 89.68.
DowJones: 9'864.94 +0.80%.
NASDAQ: 2’139.28 +0.72%.
S&P 500: 1’071.49 +0.56%.
Nikkei: 10’016.40 +1.87%.
Shanghai: 2’919.76 +0.24%,
Gold: $1049.44
Crude Oil: $72.47
 
Comments:

Comments from the Fed continued over the weekend with speeches from Vice-Chairman Kohn and St. Louis Fed President Bullard. Kohn stressed the importance of keeping inflation expectations low and warned against any policy designed to engineer higher inflation expectations. He said that the cost to bringing the inflation expectations to the current state could be quite high. Bullard also adopted a hawkish stance on inflation, saying that medium term inflation risks may be higher than is widely believed.

US Columbus Day and holidays in Japan and Canada should keep things calm today. RTFX Trend is neutral for EURUSD today, and I expect USD to strengthen earlier in the week, especially with the lack of data due today and the hawkish comments by several key Fed members over the past few days. This week Q3 earning season goes into full gear with earnings from large US banks scheduled to be released. Also, retail sales and FOMC minutes are scheduled for later this week.

Have a good week.

Emman Xuereb

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