Intraday Market Thoughts

Leaks Galore at ECB, Australian Jobs on Deck

by Adam Button
Sep 5, 2012 23:46

The substance of Thursdays ECB decision was leaked, boosting the euro but stealing any potential surprise ahead of the announcement. The euro was the top performer while the Canadian dollar lagged. The highlights of the upcoming session is Australian employment and comments from the BOJs Shirakawa. Thursdays Premium Insights are geared ahead of Thursdays ECB decision, including weekly and monthly charts of GBPUSD to back up the latest trading idea. More below.

The ECB will pledge to buy unlimited, sterilized bonds out to 3 years for countries who seek aid. Yield caps will not be made public. The plan is said to have broad support except for Bundesbank leader Weidmann.

Reuters later confirmed the details and added that an interest rate cut is not up for discussion this month.

The leak today is really an aggregate of leaks over the past month. The three-year timeline and seniority were already known while sterilization was always a high likelihood. The leak confirms them and no rate cut is mildly EUR bullish.

The Bank of Canada held rates at 1.00% as expected and continued to maintain a hawkish bias, but without any signs of an imminent rate hike. Officials noted the unanticipated slowdown in China.

EUR/CHF jumped to 1.2040 on a rumor the SNB will hike the floor to 1.25 after the ECB decision. Europe is leaky but even if this rumor were true, the SNB would delay the plan once it was leaked.

At 0130 GMT, Australian employment expected +5K after a +14K in July. The unemployment rate is expected to pick up 5.3% from 5.2%. As always, the part-time/full-time breakdown will be important.

At 0340 GMT, BOJ Governor Shirakawa will also speak but is not expected to highlight any potential bond buying programs.

Nikkei reports that PM Noda will seek re-election but he might not even get the chance with his party mulling other candidates.

Wednesdays Premium Insights are set ahead of Thursdays ECB rate decision and press conference as well as the ADP report. Ashraf added a weekly and monthly chart on GBPUSD to back up his outlook. Direct

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