FX

December 31st, 2014 6:49 am | by John Jansen |

Via Brown Brothers Harriman:

Currencies: The dollar is little changed on the last trading day of the year. The Norwegian krone is the main mover, with the dollar falling back to the NOK 7.40 resistance level, but not yet breaking below it. The euro is trading at $1.2150 and the pound at $1.5580. The dollar is at ¥119.50 against the yen. The ruble is selling off today, up 1.5% against the basket, but still far better than its lows a couple of weeks ago. Brazilian markets are not open yet, but we suspect BRL will come under a bit of pressure after the central bank announced that it will extend its FX swap intervention program (equivalent to selling USD), but that the size will be halved. Governor Tombini had already hinted at a reduction of the program, so this is not a total surprise, but we think this is a larger cut than many had expected.

Equities: Asian equity indices that were open today were mostly higher, with the Shanghai Comp up 2.1%. The Russian Micex fell 2.5%. In Europe, the French CAC is up 0.5% and the UK FTSE up 0.3%, while US futures are up marginally.

Fixed income: Periphery bond yields are mostly higher. Spain and Italy’s 2-year yields are up around 20 bp. The head of Germany’s council of independent economic advisers, Christoph Schmidt, was quoted saying that he sees no need for the ECB to engage in sovereign bond purchases. Meanwhile, Greek 10-year yields are up 15 bps as markets begin to focus on the possibility that neither major party will have an outright majority in the upcoming election.  

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