Monday November 3, 2008 - 20:27:02 GMT
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FX Blog- GVI Far East Open for November 4, 2008
Far East Open for November 4, 2008
- Dealers are looking ahead to the RBA decision at 03:30 GMT. Street estimates have been for a -50 bp rate cut to 5.50%, although forecasts for -75 and -100bps have been bouncing around.
- A key focus Tuesday will be the results of U.S. elections. The presidential and Congressional elections have not been much of a market factor. If the polls can be trusted, Obama is likely to garner a wide victory over McCain. The outcome of the House and Senate elections is as important. The Democrats are seen controling both bodies. he key question is whether they get 60 seats in the Senate. 60 seats would give them a filibuster-proof majority. The U.S. tends to work best with a split government. Results will not start to come in until well after the N.Y. closes.
- The Hang Seng closed up sharply. Japan was closed for a holiday and the Shanghai Composite was lower. European bouses closed higher. U.S. equities appear to be closing lower
- The USD remains closely tied to the performance of share markets. Rising equity prices are usually seen as a USD and JPY negative â€“ risk aversion. The 2-yr U.S. minus E-Z bond spread is -103 bps -2 bps. U.S. bond prices are higher. Prices on E-Z bonds are up.
- The USD is up vs. the EUR, JPY, CHF and GBP. The AUD, CAD and NZD are sharply higher. This is an odd trading pattern. Tuesday sees an active U.S. data calendar. See the GVI calendar for an updated schedule of data releases in the two weeks ahe
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