Markets

Commodities Edge Higher as USD's Rebound Loses Momentum. BOJ Brings Forward Nov Meeting

The rebound in USD loses momentum growth currencies regains some grounds lost over the past few days. The market continues to focus on QE measures from central banks and BOJ's reschedule of the November meeting - to a day after the FOMC meeting- indicates the Fed must announce something new next week. Commodities trade narrowly with a mildly positive tone in European session.

At today's BOJ meeting, Governor Masaaki Shirakawa announced to bring forward the date of the next meeting to November 4-5, a signal that the central bank will accelerate stimulus measures depending on the Fed's move. Moreover, the BOJ said it will buy corporate debts with lower credit ratings than it previously purchased, including BBB rated corporate bonds and a-2 commercial paper.

Now that it's almost certain that the Fed will introduce new easing measures, probably purchases of Treasury bonds, the unknown is how much the Fed will buy. Analysts on the street generally expect the central bank to kick off with $500B while the ultimate size of the program may range from $1-2 trillion. New York Fed President William Dudley reiterated his worry about US' recovery which is likely to be 'long and bumpy' and 'unemployment remains much higher than we would like'. Dudley also repeated that the Fed needs to start another round of easing.

While the Fed may introduce a smaller size of QE than previously expected, the impact on gold should still be positive in the long-term as insufficient QE may raise worries on US growth and spur demand for gold and other precious metals.

Economic data released in the Eurozone signaled continuous growth in the region. Economi confidence improved to 104.1 in October from 103.2 a month ago. Meanwhile the industrial confidence rose to 0 from -2 in September while consumer and services confidence stayed unchanged at -11 and 8 respectively. The US will report initially jobless claims data which probably climbed +3K to 455K in the week ended October 23.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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