Forex Flash: Cliff averted, markets relieved – BBH
FXstreet.com (Barcelona) - There seems to be a collective sigh of relief across markets today as the full force of the US fiscal cliff was averted note the analysts at Brown Brothers Harriman.
However, they note that the result is not fully satisfactory as the debt ceiling and spending cut decisions have been postponed. Looking to Europe, they comment that Manufacturing PMIs were quite disappointing, although Italy was a positive surprise, as was the UK too. Looking to the EMEA, they note that mixed data out today was consistent with their view that divergences in the region will become more apparent. Finally they finish by commenting that they feel that the days of KRW out performance are likely over for the time being.
In terms of price action the comment that the dollar is broadly weaker except for the Yen. EUR/USd is around $1.3250 and GBPUSD just below $1.63. USDJPY is above 87.0 for the first time since July 2010. SEK and NZD are outperforming on the day, trading near 6.45 and 0.8350, respectively. Looking to wider markets they note that periphery sovereign debt yields are lower between 7 and 30 bp. Global equity markets have begun the year with a bang. The MSCI Asia Pacific index was up 1.1%% and Euro Stoxx is up 1.8%, led by basic materials, technology and financials. S&P futures are pointing to a 1.7% higher open.
However, they note that the result is not fully satisfactory as the debt ceiling and spending cut decisions have been postponed. Looking to Europe, they comment that Manufacturing PMIs were quite disappointing, although Italy was a positive surprise, as was the UK too. Looking to the EMEA, they note that mixed data out today was consistent with their view that divergences in the region will become more apparent. Finally they finish by commenting that they feel that the days of KRW out performance are likely over for the time being.
In terms of price action the comment that the dollar is broadly weaker except for the Yen. EUR/USd is around $1.3250 and GBPUSD just below $1.63. USDJPY is above 87.0 for the first time since July 2010. SEK and NZD are outperforming on the day, trading near 6.45 and 0.8350, respectively. Looking to wider markets they note that periphery sovereign debt yields are lower between 7 and 30 bp. Global equity markets have begun the year with a bang. The MSCI Asia Pacific index was up 1.1%% and Euro Stoxx is up 1.8%, led by basic materials, technology and financials. S&P futures are pointing to a 1.7% higher open.
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