9 Dec 2013
Flash: Strong US Data - Now What? - TD Securities
FXstreet.com (Córdoba) - The TD Securities analyst team, the USD retains a somewhat softer undertone—continuing the softer trend that emerged early in November in terms of the DXY index—despite solid economic data reports last week (GDP, survey data, NFP) that support market expectations of an early start to the Fed tapering asset purchases.
Key Quotes
"US 10-year yields pushed through 2.90% last week but rising long-term rates failed to support the USD to any significant extent".
"We doubt that the Fed is ready to accept the tapering invitation this month, however, and we note that the upward creep in short-term Eurozone interest rates suggests an ongoing degree of stress in funding markets ahead of the year-end there which may explain why the EUR remains so well supported (ignoring the weaker than expected German IP data)".
"We think tapering is more likely to start early in the New Year and that the USD rally will have to wait until January when EUR funding pressures should ease".
Key Quotes
"US 10-year yields pushed through 2.90% last week but rising long-term rates failed to support the USD to any significant extent".
"We doubt that the Fed is ready to accept the tapering invitation this month, however, and we note that the upward creep in short-term Eurozone interest rates suggests an ongoing degree of stress in funding markets ahead of the year-end there which may explain why the EUR remains so well supported (ignoring the weaker than expected German IP data)".
"We think tapering is more likely to start early in the New Year and that the USD rally will have to wait until January when EUR funding pressures should ease".