GBP… looks like the market has gone a bit wild discounting increased chances of Scotland independence and what it means for Sterling valuation? according to morgan stanley, Scottish independence could see sterling fall 10pc (note from july 14).. it has lost 7 cents ever since. Morgan Stanley argue that “Value of sterling could drop by 10pc, leave the rest of the UK more exposed to financial risks and delay a decision on increasing interest rates beyond the general election…
EUR/GBP: Positions are still at extreme levels and a quick look at the l/t charts suggests that macro trailing stops are likely to start getting heavy through .8035
Slight recovery in BOJ easing expectations into 2015… also nomura: “Expectations for a BOJ easing in 2015 among BOJ watchers have recovered slightly, according to Bloomberg. While 68% of BOJ watchers expected the BOJ to ease in the previous survey released on 5 August, 74% of BOJ watchers now expect the Bank to ease (Figure 1). Expectations of a near-term BOJ easing remain low, as no one expects the Bank to ease at the next two meetings (3-4 September and 6-7 October).”
Commenting on the China Services and Composite PMI™
data, Hongbin Qu, Chief Economist, China & Co-Head of
Asian Economic Research at HSBC said:
“The headline HSBC China Services PMI rebounded to a
seventeen-month high of 54.1 in August, after registering
an all-time low reading in July. Apart from the rebound in
the headline number, other indices suggest a mixed picture
rather than a broad-based improvement. The economy still
faces downside risks to growth in the second half of the
year from the property sector slowdown. We think policy
makers should use further easing measures to help support
the recovery.”
As per AUD reference, Stevens said “has made his views clear on the high AUD, won’t repeat them”… which to me suggest period of strong jawboning left behind, perhaps he is getting more confident that usd broad-based strength will do the trick to see a cheaper audusd rate going forward… in recent months, my perception has been $0.95 as land in the sand for the RBA, but at these levels, looks like they want to rely on USD strength/Fed tightening as main factor to drive rate lower… i continue to see clues that rba won’t act to lower rates and rhetoric towards aud not an imminent risk if wanting to be aud long…