Asian Session Recap

The major event that was discussed during the Asian session this morning was the victory of Liberal Democratic Party (LDP) Shinzo Abeâ who became the PM of the country after winning a majority of the vote over the weekend. The party also won almost 80% of the lower house seats. This development will ensure that the party head will win his third term without much stress, making him the longest-serving PM in the country’s history.

JPY

The currency started on a lower note after the election results of the weekend and this ultimately led a longer period of easy monetary policies.
The pair of USD/JPY rose from 113.52 to 113.86 before ending the session at 113.76; EUR/JPY also went up from 133.64 to 134.00, settling at 133.89 by the end of the session while GBP/JPY followed suit after rising from 149.67 to 150.16, finally settling at 150.12.

USD

The USD started the session on a very high note, but then risk appetite took over and pushed other currencies ahead of the greenback.

EUR/USD decreased to 1.1751, later coming up to 1.1770 by the end of the session; GBP/USD also went down to 1.3169, recovering much, later on, to stand at 1.3198; USD/CAD initially increased to 1.2642, before dropping down to 1.2623 before the end of the session.

UK Businesses Urge Government To Reach Brexit Transition Deal

Business leaders in the region have notified the British government that they should negotiate a smooth Brexit transition or else lose investment in the region with thousands of people losing their jobs in the process.
This letter was addressed to Brexit Minister David Davis, with five top organizations in the U.K stating that the deal will have to be reached soon so that they can make investments plans for next year.

London/US Session Recap

One of the major events discussed during this session is the Fed Chair which President Trump said he will announce very soon. He made this announcement during an interview with Fox News over the week. His decision is something of a guess as he indicated that is considering retaining Janet Yellen even though Taylor and Powell are the favorite candidates.

USD

The USD was the best performing currency during the London session with no direct catalyst associated with this. Analysts though have indicated that the currency is just continuing its fine form after the Friday session went great.
Some analysts attributed the rise to Shinzo Abe’s victory and the weakness it caused for the Yen.
USD/CHF increased by 25 points at +0.26% to end the session at 0.9866, while the USD/JPY also went up by 9 pips at+0.08%, ending the session at 113.84

GBP

The GBP performed woefully at the London session, ending up as the second worst performing currency of the session after the Swiss Franc. The bad performance was attributed to the political unrest in the U.K.
GBP/USD fell by 31 points at -0.28%, trading at 1.3163, while the pair of GBP/JPY also decreased by 31 pips at -0.21%, ending the session at 149.83,

Major Events of the week of October 23-27, 2017

• UK GDP (first release): Wednesday, 8:30. With the British economy growing at a rate that can only be described as slow, (their 0.3% increase in both the first and second quarter of the month), this data could be pivotal in deciding how the economy and the GBP perform in the coming weeks. With Brexit issues still around, an increase of 0.3% is still expected for the third quarter of the year.
• US Durable Goods Orders: Wednesday, 12:30. This data increased by 2% for the month of August while the core orders went up by 0.5%. These data are very useful to the GDP and they ultimately affect the economy. The data is expected to drop for the month of September with Durable goods order set to increase by 1.1% while core data will remain at 0.5%.
• Canadian rate decision: Wednesday, 14:00, press conference at 15:15. This is a much-anticipated meeting after the Bank of Canada raised its interest rate during the last two meetings, this move has helped boost the CAD among its competitors. It is expected that the Bank of Canada will leave the interest rate at its current level 1%.
• US New Home Sales: Wednesday, 14:00. This is a data that has small transaction rate but the outcome could lead to a wide economic activity. For the month of August. The annual level of sales was at 560k, with 556k expected for the month of September.
• ECB Rate decision: Thursday, the decision is at 11:45, press conference at 12:30. It is almost certain that the European Central Bank will not alter its interest rates, but the future of the QE program might be discussed during the meeting. At the moment, the ECB purchase about 60 billion euros worth of bond, a contract which is set to expire by the end of this year. There has been an indication that the bank will cut the purchase down to a region between 25-40 billion euros and this new contract will last til end of next year.
• US GDP (first release): Friday, 12:30. After the poor start to the beginning of the year, the GDP went up during the second quarter and is now at 3.1% annualized level. For the third quarter, the growth is expected to be slower due to the effect of the hurricanes that left many with no jobs. There is going to be three data released based on this and this is the first one among them, with the other two being currently reviewed. Analysts expect that the annualized level of growth will drop down to 2.7% for the third quarter.