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All eyes on BOJ Thursday Policy Announcement

December 18, 2012

LATE UPDATE

GMT 9:53 – (Subscriber) after the data view about pound remain same ?
GMT 9:56 -Yes, view unchanged……………..
GMT 13:42 (Subscriber) as gold 1696.80 should buy at these levels with sl
GMT 13:44 – Yes, I said around $ 1695.
GMT 14:56 – GOLD @ $ 1696 = Square gold position. Could dip to test 4 1690-92….
GMT 14:58 – GBP @ 1.6224 = take profit……..
GMT 15:01 – Though view remain unchanged, but squaring is prefered.
Trading activity will reamin thin as we are approaching year end……
GMT 15:02 – Ok pals, cheers until tomorrow………..

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GMT 3:28 – EURO @ 1.3170 = Mildly positive news is that the two US leaders have started talking in same wave length, which is helping the talks to move in te positive direction. The real problem is that Republicans are not keen to impose heavy tax on the Rich Americans and the Democrats are not keen to compromise on spending slash. This is a USD 600 billion deal that expires in the beginning of January that will lead to recession.
Market is focusing developments in Japan as Shinzo Abe won elections by large margin suggesting that partnering with its ally, LDP may find it easier to obtain the required majority through legislation by overriding the opposition that may hinder its business activity.
Abe favours extremely accomodative and aggressive monetary policy to create inflation to encourage its cash rich savers to spend. He is also interested in purchasing of foreign bonds that could be done by creating money, which should weaken Yen and this strategy will simultaneously help Japan’s export to rise.
BOJ has so far roughly injected Yen 90 trillion, but LDP chief thinks that Japan’s Central Bank did not ease enough and hence, prefers ultra – easing policy. BOJ thinks the other way and feels more fiscal measures are required for economic activity. Let’s see if BOJ opts for policy shift after the conclusion on its its Thursday’s policy meeting. Since this will be 1st BOJ meeting after the election result so market will keenly looking for two announcements that if BOJ goes for further easing and increases its inflation target to 2 pct to meet Shinzo Abe’s demand or will pay no heed to give signal that BOJ is an autonomous institution. However, this will surely put Yen under pressure.
Meanwhile, as we are approaching holidays and year end too, trading volumes and activities will thin down.
GMT 3:28 – EURO @ 1.3170 = Euro should find support around 1.3140-50 levels and break of 1.3205-10 will see a move towards 1.3230-35 zones or else 1.3120
GMT 3:38 – GOLD @ $ 1701.50 = Suspect that $ 1695 will not surrender and could see a move towards $ 1710-12, posssibly test of $ 1715-17 zones
GMT 3:34 – AUD 1.0544 = Buy around 1.0520 STOPS 1.0490 for 1.0570-80
GMT 3:32 – JPY @ 83.99 = Should hold above 83.60 and needs to push beyond 84.25-30 zones for 84.50
GMT 3:32 – GBP @ 1.6210 = Do not see a fall below 1.6160-70 zones and looking for bounce back from 1.6190 levels for 1.6245, break would encourage for more gains.

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