FXstreet.com (Barcelona) - Brown Brothers Harriman analysts haven taken a look at the holiday market and believe that the key theme driving momentum is Yen weakness, or 'Abenomics'.
They also note that the market is also anticipating a further reduction in European tail risks while the US Treasury has indicated that it will begin taking special measures to avoid violating the debt ceiling. Elsewhere, Italian politics continues to provide the usual element of drama as can be expected, a US labour dispute has developed at ports on both coasts and the Chinese government has announced plans to increase its budget deficit by 50%.
They note that in terms of price action, the dollar is mostly weaker against other major currencies, with the exception of the yen. EURUSD broke above 1.3250 and GBPUSD is testing 1.6200. USDJPY made a convincing move over 85.50 overnight but fell short of threatening the 86.0 level. Equity markets were mixed in Asia, but the Nikkei continues to rise sharply, now up 3% in the last three sessions. Euro Stoxx is up 0.2% and US futures are flat.