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Overview of the main economical events of the current day - 12/06/2013
The Bank of Japan disappointed the market participants
The dollar fell by almost 3% against the yen on Tuesday having shown the biggest daily decline since May, 2010. After the 2-day meeting that was over on Tuesday the Bank of Japan kept the monetary policy line without changes having abstained from extra economic support measures including the expected prolongation of credit operation period which is used to decrease the volatility at the debt security market. The market participants had some hopes that the Bank of Japan would approve credit operations for at least one year.
However the central bank didn’t meet the market expectations. As a result the yen rose sharply. An extra factor of the dollar decline was the result of the auction for the sale of 3-year U.S. Treasury notes, which showed a rather weak result. Securities yield rose to 0.581% from 0.354% the previous month, which is higher by more than 58%. The US Treasury 2-year and 3-year securities are traditionally popular for purchases from Japanese investors. The analysts of the Bank of America believe that further scale back of USDJPY positions can push it into 91 area.
The dollar crash against the yen weakened the dollar against other major currencies: euro, pound and franc. Commodity currencies managed to compensate its fall by the end of the day and closed almost at zero. EURUSD exceeded the level of 1.33 on the back of the German constitutional court meeting about the legitimacy of ECB peripheral bonds purchase program (OMT). The ECB representative Asmussen said at the hearings that the ECB was ready for unlimited purchases of government bonds by the OMT; and that “the financial markets need a strong signal that the OMT program is unlimited”.
The pound rose on Tuesday and exceeded the level of 1.56 despite rather mixed industrial production statistics. According to the Office for National Statistics survey the production in the manufacturing industry of the country decreased by 0.5% in April in annual terms while a drop by 0.3% was forecasted. However the base industrial production indicator turned out better than expected as in April it rose by 0.1% vs March while the reading was not expected to change. RICS House Price Balance in May was better than expected.
The franc rose amid the publication of SECO economic forecasts. The Swiss government raised the forecast of the GDP growth in 2013 up to 1.4% from 1.3%. Meanwhile NFIB Small Business Index in May grew up to its high for a year having exceeded the expectations; and inventories at wholesalers in April increased by 0.2% as expected.
The Australian dollar updated an annual low against the dollar on Tuesday after the release of business confidence data in Australia but by the end of the day leveled almost all losses. According to the National Australia Bank data released on Tuesday the business confidence in Australia remained at the negative territory in May and was minus one point as the prior month. Negative indicator means that the number of pessimists is higher than the number of optimists. The biggest pessimism was found among mining companies.
The Bank of Japan disappointed the market participants
The dollar fell by almost 3% against the yen on Tuesday having shown the biggest daily decline since May, 2010. After the 2-day meeting that was over on Tuesday the Bank of Japan kept the monetary policy line without changes having abstained from extra economic support measures including the expected prolongation of credit operation period which is used to decrease the volatility at the debt security market. The market participants had some hopes that the Bank of Japan would approve credit operations for at least one year.
However the central bank didn’t meet the market expectations. As a result the yen rose sharply. An extra factor of the dollar decline was the result of the auction for the sale of 3-year U.S. Treasury notes, which showed a rather weak result. Securities yield rose to 0.581% from 0.354% the previous month, which is higher by more than 58%. The US Treasury 2-year and 3-year securities are traditionally popular for purchases from Japanese investors. The analysts of the Bank of America believe that further scale back of USDJPY positions can push it into 91 area.
The dollar crash against the yen weakened the dollar against other major currencies: euro, pound and franc. Commodity currencies managed to compensate its fall by the end of the day and closed almost at zero. EURUSD exceeded the level of 1.33 on the back of the German constitutional court meeting about the legitimacy of ECB peripheral bonds purchase program (OMT). The ECB representative Asmussen said at the hearings that the ECB was ready for unlimited purchases of government bonds by the OMT; and that “the financial markets need a strong signal that the OMT program is unlimited”.
The pound rose on Tuesday and exceeded the level of 1.56 despite rather mixed industrial production statistics. According to the Office for National Statistics survey the production in the manufacturing industry of the country decreased by 0.5% in April in annual terms while a drop by 0.3% was forecasted. However the base industrial production indicator turned out better than expected as in April it rose by 0.1% vs March while the reading was not expected to change. RICS House Price Balance in May was better than expected.
The UK industrial production index
Source: ons.gov.uk
![apr_uk_ind_pr.gif](/proxy.php?image=http%3A%2F%2Fmasterforex.com%2Fuseruploads%2Fimages%2Fapr_uk_ind_pr.gif&hash=867ed4e4064c8ef54f1f4d8a03c1a65d)
Source: ons.gov.uk
The franc rose amid the publication of SECO economic forecasts. The Swiss government raised the forecast of the GDP growth in 2013 up to 1.4% from 1.3%. Meanwhile NFIB Small Business Index in May grew up to its high for a year having exceeded the expectations; and inventories at wholesalers in April increased by 0.2% as expected.
The Australian dollar updated an annual low against the dollar on Tuesday after the release of business confidence data in Australia but by the end of the day leveled almost all losses. According to the National Australia Bank data released on Tuesday the business confidence in Australia remained at the negative territory in May and was minus one point as the prior month. Negative indicator means that the number of pessimists is higher than the number of optimists. The biggest pessimism was found among mining companies.