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12 Sep 2013
Flash: Lag in the Syria debacle – BMO
FXstreet.com (London) - Stephen Gallo, European Head of FX Strategy at BMO said that the delayed military action is positive for the macro scenario.
Key Quotes:
“The further lag in the Syria debacle, which has delayed military action while we await Damascus’ decision on its chemical weapons stockpile, has been a positive development for the macro scenario”.
“It essentially makes the picture tidy and wipes the slate clean heading into Thursday and Friday’s US data, where we will almost certainly get some further pre-FOMC fluctuation in FX and rates. Taken together, Thursday and Friday should offer the best opportunities for USD/JPY and EUR/USD movement; unless the data are wholly unexciting, the post-NFP adjustment lower in rates and the USD will either extend itself further or get backed out a bit more if the data are very positive”.
“Nevertheless, we expect moves to be rather limited in front of next week’s FOMC. The data are important, but the data tell us a lot less than we would like taken in isolation from the Fed’s language, [revised?] forward guidance and the September tapering amount; all of which we will get next week. We need to whole picnic basket”.
Key Quotes:
“The further lag in the Syria debacle, which has delayed military action while we await Damascus’ decision on its chemical weapons stockpile, has been a positive development for the macro scenario”.
“It essentially makes the picture tidy and wipes the slate clean heading into Thursday and Friday’s US data, where we will almost certainly get some further pre-FOMC fluctuation in FX and rates. Taken together, Thursday and Friday should offer the best opportunities for USD/JPY and EUR/USD movement; unless the data are wholly unexciting, the post-NFP adjustment lower in rates and the USD will either extend itself further or get backed out a bit more if the data are very positive”.
“Nevertheless, we expect moves to be rather limited in front of next week’s FOMC. The data are important, but the data tell us a lot less than we would like taken in isolation from the Fed’s language, [revised?] forward guidance and the September tapering amount; all of which we will get next week. We need to whole picnic basket”.