Forex Flash: Interest rates drive divergence in FX market – BBH
FXstreet.com (Barcelona) - Brown Brothers Harriman analysts note that there is more evidence of tightening of Eurozone financial conditions under way today amidst concerns that some of that long-term funds from the LTRO payback would be replaced by 3-month refi operations.
Looking at the price action they note that the dollar is mixed, falling against the Euro but rising against the Yen and most dolllar bloc currencies. They see that EURUSD made a convincing break of the $1.3500 level and the option structure rumoured to be struck near $1.3550 was taken out. USDJPY made a decisive break above the 91.0 level overnight but fell short of reaching 91.50.
Looking further afield they note that yields on major global fixed income markets are higher by 2-3 bp. The MSCI Asia Pacific index closed 0.5% higher. Euro Stoxx is marginally lower, dragged down by a sell off in Italian share (MIB - 1.9% on the day). S&P futures are pointing to a flat open.
Looking at the price action they note that the dollar is mixed, falling against the Euro but rising against the Yen and most dolllar bloc currencies. They see that EURUSD made a convincing break of the $1.3500 level and the option structure rumoured to be struck near $1.3550 was taken out. USDJPY made a decisive break above the 91.0 level overnight but fell short of reaching 91.50.
Looking further afield they note that yields on major global fixed income markets are higher by 2-3 bp. The MSCI Asia Pacific index closed 0.5% higher. Euro Stoxx is marginally lower, dragged down by a sell off in Italian share (MIB - 1.9% on the day). S&P futures are pointing to a flat open.
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