EUR/usd
It's a funny thing: already today the debt ceiling negotiations should come to the end otherwise default will occur already tomorrow, but for all that the markets manage to see the positive in the news from Washington. They are merely denying the problem. From the psychological point of view, the markets are just at the first stage – denial – and they still have to go through anger, bargaining, depression and acceptance. Yet, the other stages will scarcely be favourable for stock indices and the US dollar. Now the most probable way out is seen in another compromise with the debt ceiling increase for a few weeks amid the government shutdown. The decrease in government spending, which has lasted for almost three weeks already, is sure to tell badly on employment and household spending. Apparently, fomc's cautiousness in September was based on the fears that lawmakers' would reach these very results. Even on the basis of the preceding data we expected that the curtailment of the bond-buying programme would begin not until December. However, now it is quite possible that it will start under the reign of Janet yellen, that is after January. Now even the Fed's members have to provide comments regarding the CB's ability to ease the chaos should default in the USA occur rather than regarding the stimulus rollback. Fisher, who said this, is ‘very sure' that it will be possible to evade default, but the train is rushing to the edge of the gulf, across which no bridge is seen. The dollar even managed to appreciate against the euro yesterday. The pair slipped from 1.3570 down to 1.3480, but then bulls got the situation under control, bringing eurusd back above 1.3500. This afternoon may prove to be quite stormy for the market as eventually one of the parties should gain the upper hand. As a result, the pair will come out of the 1.3480-1.3600 channel, where it's been for about a month.
GBP/USD
In the absence of other economic data the market reacted too violently to the news that the annual consumer inflation rate remained at 2.7%. Over September the prices grew by 0.4%, which is a bit above the expected 0.3%. The message about a deeper drop of producer prices could have counterbalanced the situation, but the markets first reacted to consumer prices, which provoked growth of gbpusd by 30pips, albeit not for long. Soon bears pushed the pair down to the lower bound of the 1.5915-1.6000 channel. Today there will be, in our opinion, more interesting statistics for the markets, that is on the labour market.
USD/JPY
Uncertainty of the US politicians doesn't allow the yen to make a step up. The market's confidence in the successful outcome helps the pair remain at the upper bound of the channel, where it has been trading since the beginning of the week. Anyway, to start growing the pair needs a signal from the US government that default won't occur tonight.
gold
Holding within the downtrend, Gold is trying to rise to the upper bound of the channel. Now the latter is at 1300, but at the end of the week it will already be close to 1293. It will be interesting to see if the downtrend will persist or not. The probable growth of the dollar may help here. However, the metal looks a bit oversold.
