Markets Quiet In Early Session As EU Woes Recede; Yields, Data In Focus

By David Liu,

Weekend Developments
  • US 10 yields rally to 4 month high, other yields tracking
  • Current Greek Finance Minister Venizelos unopposed in PASOK leadership election
  • IMF: Greek setback could require additional bonded debt restructuring
  • ISDA CDS auction to be held on March 19 th , 2012
  • Former East German pro-democracy activist Joachim Gauck elected as new president

With increasingly upbeat data from the United States signaling a possible recovery in the world’s largest economy, the FX markets are seeing a fundamental shift away from being more risk-driven to being data-driven. Recent US dollar performance against all majors especially the yen can be traced to higher yields on US treasuries, spurring increased purchases of US dollars on the open market to fund buys of US government issued debt.

Data Bloomberg

While the docket for US events will remain relatively light for this week, markets will look to the European calendar of events for indications of possible improvements in the European economies, including German producer prices. The Reserve Bank of Australia and Bank of England are also expected to release minutes of their respective rate decision meetings from last week. At the time of writing, FX continues to drift in both directions in pre-Asia trading with no major developments over the weekend.

-By David Liu, DailyFX Research
DailyFX is the forex news and research arm of FXCM, Inc (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.

Original Article: http://www.dailyfx.com/forex/market_alert/2012/03/18/Weekend_03182012_Markets-Look-Beyond-Debt-Yields.html

DailyFX is the forex news and research arm of FXCM (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.