Intraday Market Thoughts

BOJ Joins Easing Party

by Patrik Urban
Sep 19, 2012 12:53

The USD strengthened during the London session against all majors. European equities are only slightly in the red and the relative strength winner is USD while EUR lags. A new edition of the Premium Insights will be issued later today.

The JPY fell across the board during Asia after the BOJ surprised the market by increasing the total size of the asset buying program by 10 trillion yen to about 80 trillion from 70 trillion. The governor Shirakawa emphasized that the decision was based on disappointing data and not on the latest FOMC decision. The overnight call rate remained between 0% and 0.1%. USDJPY jumped from 78.60s to 79.22 and currently trades around the 79.00 handle.

The minutes from the September MPC meeting showed that all members unanimously voted to keep rates and QE unchanged. While most members saw the decision as straightforward, some felt that additional stimulus is likely. GBPUSD trades weaker around 1.6230 from today's high 1.6269.

Swiss ZEW economic expectations index declined further in September to -34.9 from previous -33.3. Only 9.3% of respondents see an improvement of the economic situation while 44.2% anticipate the economy to worsen in the next six months. Falling risk trades pushed EURCHF back below 1.21.

Up ahead are the latest data from the real estate market. At 8:30 am ET, the Census bureau will release building permits that are seen lower in August at 0.79M from 0.81M and also housing starts that are expected to rise to 0.77M from 0.75M. Existing homes sales are due at 10:00 am ET and they are seen higher at 4.57M from 4.47M.



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