Asian equity markets have been mixed overnight, with a lack of news events ensuring limited participation. Japanese bourses are open again after the holidays and the Nikkei is up 1.2% today, but the Hang Seng is currently down -0.6% and Shanghai Composite -1.4%.
Last night's FOMC minutes revealed that in future, the Fed will provide projections of how the committee expects the Fed Funds target will move going forward - similar to the forecasts provided by other central banks (the Riksbank being a prime example). The effect on the USD has been neutral at this stage, but there is downside risk that the next round of forecasts predicts rates staying at ultra low levels beyond mid-2013 (the current rhetoric provided has already pledged no change in rates up until that point).
With all the doom and gloom forecast for the Eurozone in the coming months, there was some cause for optimism in yesterday’s data releases. Germany’s unemployment rate dropped unexpectedly to 6.8% in December from 6.9% the month prior – taking the measurement to its lowest level since 1991. The strength of the labour market in Germany is in stark contrast to the situation in Spain, where the unemployment rate has surged to around 22%. The ongoing Eurozone debt crisis is expected to drag on German growth going forward, but is certainly more appealing to face the prospect of slower growth with unemployment at multi-decade lows as opposed to record highs.
Today’s economic calendar will feature further non-manufacturing PMI surveys out of Europe, along with the latest Eurozone CPI estimate (2.8% YoY expected, 3.0% prior), and US factory orders.
Last night's FOMC minutes revealed that in future, the Fed will provide projections of how the committee expects the Fed Funds target will move going forward - similar to the forecasts provided by other central banks (the Riksbank being a prime example). The effect on the USD has been neutral at this stage, but there is downside risk that the next round of forecasts predicts rates staying at ultra low levels beyond mid-2013 (the current rhetoric provided has already pledged no change in rates up until that point).
With all the doom and gloom forecast for the Eurozone in the coming months, there was some cause for optimism in yesterday’s data releases. Germany’s unemployment rate dropped unexpectedly to 6.8% in December from 6.9% the month prior – taking the measurement to its lowest level since 1991. The strength of the labour market in Germany is in stark contrast to the situation in Spain, where the unemployment rate has surged to around 22%. The ongoing Eurozone debt crisis is expected to drag on German growth going forward, but is certainly more appealing to face the prospect of slower growth with unemployment at multi-decade lows as opposed to record highs.
Today’s economic calendar will feature further non-manufacturing PMI surveys out of Europe, along with the latest Eurozone CPI estimate (2.8% YoY expected, 3.0% prior), and US factory orders.
By
M.Zohaib Gadit
Forex Trading Consultant
No comments:
Post a Comment
Feel free to comment.