QE4 Coming, Japan Votes, 5 Charts Added to Premium Insights
A soft US retail sales report and missile attacks in the Middle East sparked another round of risk aversion despite dovish Fed talk. The S&P 500 slumped 1.5% but FX was relatively subdued with the euro leading and yen lagging. Japan called a national election for Dec 16 with leaders pledging to weaken the yen. 5 new charts were added to tonights Premium Insights, including quarterly chart of USDJPY. Timing the new and existing EURUSD insights as well as new GBPUSD ideas. See more below.
US consumers may be heading into the holiday season on a weak note. October retail sales excluding autos and gas fell 0.3%, much worse than the 0.4% rise expected. The Commerce Department couldnt estimate the impact of Hurricane Sandy but said there were indications it had positive and negative effects.
In a separate report, Fitch said US credit card delinquencies rose for the first time in a year.
Oil prices rose and sentiment deteriorated after Israel assassinated a Hamas leader and shelled the Gaza strip. There were no immediate signs of the violence spreading to other countries but risks are certainly heightened.
The minutes of the October FOMC meeting showed that a number of members favored additional Treasury purchases when Operation Twist expires at the end of the year. If fiscal cliff risks continue to rise and stocks continue falling, expect an open-ended QE announcement.
The euro rose to 1.2780 after the minutes but later slipped back to 1.2730.
The yen weakened throughout the session despite its safe haven status. The election will be fought partially on which party can end the era of yen strength. Expect grand promises to spook the market.
The events on the Asia-Pacific calendar include Australian consumer inflation expectations and new vehicle sales.
5 new charts were added to tonights Premium Insights, including quarterly chart of USDJPY. Timing the new and existing EURUSD insights as well as new GBPUSD ideas. Direct Access to today's Premium Insights is found here: http://ashraflaidi.com/products/sub01/access/?a=694 Non- subscribers can have a free trial here: http://ashraflaidi.com/products/
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