Ladies and Gentlemen,
Tomorrow at 13:30 GMT we get the October Non-Farm Payroll
number, the September figure was a disappointing 142k. A bounce to 182k is the
Bloomberg survey consensus.
The FOMC members believe the chance of ‘lift off’ in
December is still ‘live’, needing a reason not to hike is the new sentiment.
Tomorrow will give us further insight into the decision
making process on 16th December.
The Fed has maintained that the appropriate time to raise
rates is when the sustained improvement in the labour market is attained,
combined with confidence that inflation will move back to its 2% target over the
medium term. These are the exact words from the press on 28th
October ‘the Committee expects inflation to rise gradually toward 2 percent
over the medium term as the labor market improves further and the transitory
effects of declines in energy and import prices dissipate’. The dual
mandate of Fed has been talked about in previous Event Risk updates.
I see the divergence in Central Bank policy as
an opportunity to express ‘Long $’ plays over the medium term.
$/Jpy sits above the 200 day moving average at 121.10 and
just below the 100 day moving average at 121.70, a daily close above 122 will
see momentum accounts add to existing long positions. The first Friday of the month is always interesting.
Good Luck
Anish8FX @Atom8.Com
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