FX round-up: Traders step aside ahead of ECB meeting
Currency markets were for the most part quiescent on Monday, despite the gyrations seen in the major equity and sovereign debt markets, as traders stood aside ahead of this week’s European Central Bank policy meeting and Friday’s US non-farm payrolls report.
Thus, the euro/dollar edged higher by 0.05% to 1.2689.
Even so, the fact remains that all is not quite well in the Eurozone’s periphery as the social stress inflicted by the financial crisis has left a clear imprint on the local politics.
In that regard, many market watchers were closely following everything related to the bid for independence by nationalists in Spain’s north-eastern region of Catalonia.
Over the weekend the president of Spain’s autonomous region of Catalonia called a 9 November referendum the region.
Any vote would not be legally binding, at least in theory, but even the prospect of one ruffled some feathers in debt markets.
To take note of, the yield on Greek 10-year bonds jumped by 34 basis points to 6.51%, their largest increase in four months, ahead of a meeting between authorities in Athens and the country’s creditors tomorrow.
The flow of economic data Stateside was slightly better than expected. In August personal incomes and spending in the US increased by 0.3% and 0.5%, respectively, on the month, versus consensus estimates for readings of 0.3% and 0.4%, respectively.
In parallel, The National Association of Realtors’ (NAR) index of US pending home sales (PHI) fell at 1% clip month-on-month in August to hit 104.7. The consensus estimate had been for a drop of 0.5%.
However, the previous month’s variation was revised sharply higher, to show a rise of 3.2%.
For his part, speaking to CNBC the President of the Federal Reserve bank of Chicago, Charles Evans, argued the central bank ought to wait until it is sure that the economy can sustain its momentum to carry out its first interest rate increase.
Dollar/yen was to be seen 0.37% higher at 109.53 by the end of the session.