A rumor from the CBS new program 60 Minutes says that Federal Reserve Bank Chairman has hinted that he will do more than the original $600 billion quantitative easing(U.S. Treasury purchases) in an interview with the television show. The show is scheduled to air on Sunday December 5th, 2010.
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December 3, 2010 11:05 ET: USD FALLING ON POOR US figures may appear to be an unusual dynamic in currencies considering the laws of risk aversion of the past 3 years. Nonetheless, these dynamics have changed after the Nov 4 announcement of QE2, when positive US data started to help USD on the rationale that improved economy reduces the likelihood of completing the entire $600 bln in asset purchases. The disappointing US November jobs report (+39K NFP vs. +145K consensus and +0.2 pt increase in unemployment rate to 9.8% vs. 9.6% consensus) adds to expectations of full QE2, thereby sending US 10 year yields back below 3% and weighing on the USD across the board. On the positive side, the Nov jobs report showed the first back-to-back monthly increase in jobs since April-May. EURUSD makes a vital rebound above $1.3350, lifting 3.2% off this weeks 3-month lows of $1.2980. Next weeks Irish budget may be among the remaining obstacles for EUR sentiment, followed by Spain auctions (Dec 14-16). In order for EURUSD to break off its 5-week downtrend, it must attain a close above $1.3420-30 next week, which coincides with the important 55-week MA as well as the lows of Nov 15-16 and the low from Sep 28. Subsequent technical barriers for the euro stand at $1.3660.
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The BLS will release the November Employment Report at 8:30 AM tomorrow. The consensus is for an increase of 145,000 payroll jobs in November, and for the unemployment rate to stay steady at 9.6%. Note: Bloomberg is listing the consensus as 168,000 payroll jobs, and an increase in the unemployment rate to 9.7%.Read more at http://www.calculatedriskblog.com/Read more…
