Intraday Market Thoughts

Archived IMT (2010.08.27)

by Ashraf Laidi
Aug 27, 2010 14:11

US Q2 GDP REVISED down to 1.6% (vs. exp 1.4%) from advanced 2.4% reading, triggering a relief rally in equities and BROAD YEN SELLOFF, especially since the Japanese currency has been already hit by: i) fresh political fallout in Japan and ; ii) escalating signals of a looming stimulus package involving the Bank of Japan injecting fresh liquidity. SWISS FRANC COMES OUT ON TOP as the best of the 3 safe haven currencies, hitting 3 1/2 week highs vs. JPY 82.90s, while dragging USDCHF to lowest since Jan at 1.0244 eyeing 1.0130s in medium term. NOTE CHFJPY is testing the July trendline . Bernankes speech will likely focus on the possible policy response rather than on the outlook, which should maintain GOLDs run-up. FX reaction will likely get its queues from equities, but any aggressive risk aversion, will see AUDUSD heading back to 0.8840s and GBPUSD towards 1.5420s. In the unlikely event that Bernanke's speech triggers a reliefe rally in equities, I would opt for EURUSD, NZDJPY and CHFJPY to stand among the big winners of the day, retesting 1.2760s, 60.40s and 83.40s respectively.


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