Simon Smith

Patient means considerable period means dollar largely unmoved

The Fed changed the language in their statement, as many were suspecting, but not the meaning. Apparently, they will be patient in normalising policy, with this being consistent with their previous pledge of keeping rates low for a "considerable period". Next meeting, they may be patient for a considerable period, which will have markets even more confused. After the initial volatility, the dollar has settled little changed from pre-meeting levels.

Simon Smith

Two BoE members still wanting higher rates

Two members of the UK MPC want to see higher rates according to the latest MPC minutes, as has been the case since August. Their view is predicated on a tightening of the labour market, leading to firmer wage growth in 2015 and it being better to act pre-emptively, rather than too late. Sterling little changed on the news. Main unemployment rate nudged higher to 6.0%, with weekly earnings data better than expected at 1.4% (3M YoY).

Simon Smith

Sterling lower, euro higher, rouble falters

It's proving to be a lively start to the European trading session. After the surprise overnight rate hike from the Russian central bank, the Rouble has reversed the initial gains and is now trading weaker vs. last night's closing level. The move was clearly designed to support the currency, making it harder for investors to short it, but so far at least, that has not stemmed the depreciation tide. Elsewhere, sterling initially weakened on the back of the softer than expected CPI figures, which ...

Simon Smith

SNB keeps CHF cap in place

No major changes to SNB policy following their quarterly policy meeting. The floor to EURCHF was maintained at 1.20, with no other changes in policy. They maintained the view that they would enforce the cap with 'utmost determination', although they note that deflation risks have increased.

Simon Smith

USD firmer on payrolls

USD firmer after strong US employment report. Headliner ising 321k, upward revision of 31k to prev. mth. Rate steady at 5.8%. EUR 1.2310 , JPY 121.07.

Simon Smith

EUR down on Draghi

Markets getting their Friday sugar rush thanks to ECB President Draghi. Back in 2012 he said he would do "whatever it takes" to save the euro, in relation to the sovereign crisis that was enveloping several countries. Now he said that "We will do what we must" to raise inflation and inflation expectations. This could become the new mantra. Back in 2012, the beauty of Draghi's remarks was that the ECB did not have to do anything else to follow through. This time around, they don't have the ...

Simon Smith

Some UK MPC members still voting for higher rates

Sterling back up to 1.5650 after BoE minutes show 2 members still dissenting in favour of higher rates. This is despite the chance in tone in the latest Inflation Report and deterioration in the global economy since August, when both started dissenting in favour of tightening. The spread of views on the committee is wider than anticipated, the doves worried that any tightening could well have to be reversed given current inflation trends. The hawks take the view that the amount of slack in the ...

Simon Smith

Labour market data

Sterling slightly firmer after latest labour market data, which showed the rate steady at 6.0%, with increase in wages slightly more than expected at 1.0% on headline (3M Y/Y measure) and 1.3% on underlying measure. The market awaits the Inflation Report at 10:30 GMT, which is expected to be more on the dovish side, especially in relation to sentiment mid-year when Carney was suggesting market was under-estimating the risk of a rate increase this year.

Simon Smith

USDJPY above 116.00

USDJPY above 116.00 as yen weakness from Asia session continues through European trade. EURJPY at 143.85, just shy of high seen post-ECB last Thursday. As mentioned in Daily, we're in a renewed period of yen weakness, which could well have further to run.

Simon Smith

Dollar reaction after payrolls

US employment report weaker on headline reading, but upward revisions to previous months and fall in unemployment rate (down to 5.8%) has seen some buyers into the initial dollar weakness and market currently struggling to decide how to take this report. USDJPY below 115.00, with EURUSD struggling to hold above the 115.00 level.

Simon Smith

EUR lower at start of press conference

EUR down to low of 1.2406 after ECB's Draghi comments, down 1 big figure, but has since managed to recovery. Council said to be unanimous on further easing measures if needed.

Simon Smith

European dollar gains

European currencies, sterling in particular, were already coming under pressure ahead of the European session, with the subsequent data enhancing the trend and pushing cable more than 1 big figure lower on the day to below 1.59. The weaker services PMI data provided the impetus to the renewed push lower, dragging EURUSD to below the 1.25 level. A

Simon Smith

Cable above 1.60

Cable nudging back above the 1.60 level after the latest manufacturing PMI data, which showed the headline rate rising to 53.2, from 51.4. This is first release for October and there were concerns that the economy would slow after the recent strong pace of growth.

Angus Campbell

US consumer confidence smashes expectations

US consumer confidence came in at 94.5 well ahead of expectations of a decline from 89.0 to 87.0. This is giving the dollar a like help, lifting it off its session lows having been drifting lower following the poor durable goods data earlier. The most impressive thing about this figure is that it shows US consumers have not yet had their confidence dented from the Ebola scares and could draw a line under the recent dollar weakness, especially since the Jobs Plentiful / Hard-to-Get data was also ...

Simon Smith

UK GDP in line

UK GDP rose 0.7% QoQ in Q3, in line with expectation. Cable has popped higher by around 20 pips to 1.6050, just on short-covering and the fact that support at 1.60 now looks a little safer now near-term risk has been removed.

Simon Smith

GBO softer after sales data

GBP sitting above 1.6000 after softer than expected retail sales data for September. Both headline and underlying measures fell 0.3%, coming on the back of MPC minutes yesterday which were more cautious on the global economy overall. We've also seen a mixed picture in terms of eurozone data, with better German PMI data contrasting with weaker numbers from France. EURUSD remains in trapped in a tight range for now though.