29 ordspråk av Derek Halpenny
Derek Halpenny
A banking crisis is a more realistic view than at any time in the last few years.
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A consensus reading is not going to continue to support the dollar.
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Any shift in policy on Thursday from the BOJ is very likely to be accompanied by a strong commitment to maintaining zero interest rates. There is no trade more obvious than selling the yen against the dollar.
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Any shift in policy on Thursday from the BOJ is very likely to be accompanied by a strong commitment to maintaining zero interest rates. Yield is still very important for Japanese investors and it's nearly a guaranteed event that we'll see a pick up in purchases of foreign assets.
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Following previous moves by the Federal Reserve, the market pretty much immediately looked ahead and had a confident view on the interest-rate outlook for the next two meetings. That's been a supportive factor for the dollar. Now it seems to be different.
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Fukui has said nothing new, he has pretty much repeated what the market already knows and hasn't changed the timing of a shift on quantitative easing.
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Given that the employment report will be released on Friday, the appetite for selling the dollar may be limited especially with the consensus for non-farm payrolls gradually creeping higher from the original reading of 200,000.
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Given the rhetoric we've seen from the government today, the pressure, beyond moving away from quantitative easing will be very, very much on the BOJ to maintain a zero interest rate structure.
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His number one objective will be to stress continuity. Continuity means more interest rate increases, so that means the dollar can keep going up.
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I think it's inevitable that Governor Fukui will indicate we're that bit closer to the end of quantitative easing but I still think the message will be one of relative caution.
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I think the fact that every time we've gone below 114 yen (on dollar/yen) we've bounced back higher, is beginning to become a bit of a concern for those playing the short-term market by trying to push dollar-yen lower.
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One subject he may tackle is that maybe short-term rates need to be that bit higher.
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Overall sentiment hasn't changed significantly, obviously we've had a reversal and the selling has ceased temporarily... But the strength of the dollar has been relatively modest.
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Rising oil and gasoline prices are negative for the dollar.
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The broader picture for the yen's decline is down to the continued deterioration in Japan's trade surplus.
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