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9 Jan 2015
Fed fuels investor sentiments, USD bulls expect a strong NFP – DBS
FXStreet (Barcelona) - According to DBS, Fed’s comments about patience in interest rates along with subsiding risk aversion fuelled investor sentiments, leading US equities to recover and DXY to close near its highest close of 92.33, further noting that USD bulls remain in favour for a strong December’s NFP print at 240k.
Key Quotes
“The DXY (USD) index ended yesterday at 92.309, just below its highest close of 92.33 in Nov 2005. While US data was mixed this week, risk aversion subsided. US equities recovered in the last two sessions after the VIX volatility index tried and failed to rise and stay above 20 on 6 Jan.”
“This was also the day that oil prices (Nymex futures) hit the year’s low at $47.93/barrel and recovered to $49.47 yesterday.”
“Investor sentiment was also helped by Fed comments about patience in raising interest rates. The FOMC minutes for the 17 Dec meeting indicated no rate raises in the next couple of meetings. The same message is likely to come forth next week when many Fed officials will be commenting about the US economy.”
“US 2Y bond yield retreated to 0.6051% from its high of 0.7393% on 23 Dec. As the flight to safety eased, the US 10Y yield rose above 2% again after falling below the Fed’s 2-2.5% inflation target on 6-7 Jan.”
“Against this background, USD bulls are comfortably looking forward to US jobs data remaining strong tonight. Consensus expects nonfarm payrolls to come in at 240K in Dec14 from 321K in the previous month.”
Key Quotes
“The DXY (USD) index ended yesterday at 92.309, just below its highest close of 92.33 in Nov 2005. While US data was mixed this week, risk aversion subsided. US equities recovered in the last two sessions after the VIX volatility index tried and failed to rise and stay above 20 on 6 Jan.”
“This was also the day that oil prices (Nymex futures) hit the year’s low at $47.93/barrel and recovered to $49.47 yesterday.”
“Investor sentiment was also helped by Fed comments about patience in raising interest rates. The FOMC minutes for the 17 Dec meeting indicated no rate raises in the next couple of meetings. The same message is likely to come forth next week when many Fed officials will be commenting about the US economy.”
“US 2Y bond yield retreated to 0.6051% from its high of 0.7393% on 23 Dec. As the flight to safety eased, the US 10Y yield rose above 2% again after falling below the Fed’s 2-2.5% inflation target on 6-7 Jan.”
“Against this background, USD bulls are comfortably looking forward to US jobs data remaining strong tonight. Consensus expects nonfarm payrolls to come in at 240K in Dec14 from 321K in the previous month.”