EUR/usd
Almost all the economists surveyed by Bloomberg (48 out of 49) expect expansion of the QE programme. Many believe that this measure will compensate the size of the expiring Operation Twist. It means that the market is now in anticipation of the asset purchase programme being extended from $40bln up to $85bln monthly. This turn of events is quite possible and we spoke about that before (remember our comments after the payrolls), however it has already been built into the rates and therefore is of little interest now. There is one more variant, also worth of considering. A couple of weeks ago the Fed's members commented that Operation Twist of 45bln a month was equal to the net asset purchases to the balance sheet in the size of 20-25bln for the same time span. Taking into account that some US indicators look pretty well and the economy is expected to grow in the coming quarters, we believe that the probability of further extension of the progarmme by 20-25bln in December is 50%. It would be more reasonable to stand aside the market until the Fed announces its decision and, just in case, to be ready to sell risky assets. The single currency is growing well this week. Yesterday the pair also was going up, but noticeably slowed down around 1.30. Apparently, traders put off the major battle for this psychological level until today. Now the pair is trading at 1.2997 against the high of 1.3014 yesterday evening.
EUR/GBP
The lull in the British statistics ended end today with the employment release, which actually proved to be better than expected. Most economists expected the further increase in claimant count by 6K, however this indicator declined by 3K. Anyway, Claimant Count Rate stayed at 4.8% for the fifth month in a row. Only the data on the employed population of the country favourably stands out of the general background. The number of the employed (3m/3m) was growing particularly fast since April, but even this indicator has failed and slowed down significantly in the last two months. In August-October the index grew just by 40K against 100K on July-September. The highest rate was in May-July. The decrease in the number of the jobless helps the sterling keep attacking the local highs today.
EUR/CHF
There are few things that can stir up EURCHF. There was one of them yesterday. UBS has announced the introduction of fees on franc deposits for financial institutions. It means that the negative interest rates are again coming into reality. It already happened in the 70s, when Switzerland had to deal with the significant capital inflow into its reliable banks. Credit Suisse did it even earlier, at the beginning of the month. It tells badly on the franc rate. EURCHF grew above 1.21 yesterday. Probably, today we will see some further growth.
USD/JPY
The cunning yen again played a trick on the technical analysis. The triple top didn't work. The purchases of usdjpy resumed on the growth of stock exchanges. Asia has been growing for 10 days in a row, so the yen came under additional pressure. The pair is again trading at 82.70, for the fourth time in the last three weeks. So we were right when recommended to abstain from selling the pair. Now we should look attentively if there is another reversal forming or not.
