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Forex Flash: US market recap, more than meets the eye – Deutsche Bank

Amidst the background of the G20, the US session was far more interesting than the closes suggested. Despite the S&P500 (+0.07%), Dow Jones (+0.07%) NASDAQ (+0.06%) and CDX IG (+0bp) indices all closing virtually unchanged on the day, there was a lot to digest. The opening bell saw the S&P 500 trade 0.4% lower after euro area GDP disappointed (-0.6% QoQ vs -0.4% expected) with Germany, Italy and France all coming in lower than expected.

According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “Our economists note that together with the earlier -0.7% QoQ figure for Spain, these make Q4 the worst quarterly GDP print since H1 2009 for the EMU4 countries.” US equities spent the rest of the day recovering from the lows as sentiment took on news that Berkshire Hathaway was joining with an investment firm in acquiring Heinz in a transaction valued at $23B in a massive blockbuster. Additionally, markets digested the falling prices of gold and precious metals.

Fundamental Morning Wrap: EUR, BoJ & Fed QE in focus

As the G20 meeting in Moscow kicks off, we have taken a look across institutional research and can see a few distinct (and unsurprising) themes at play; EUR, JPY and the Fed. There is a suspicion that the latest Euro dip is little more than a correction, but serious questions still need to be addressed in the region. Secondly, a new BoJ Governor looks set to be appointed and he may not be as radical as many had suspected. Finally, there is a growing belief that the US will look to gradually start scaling back its monetary easing during the year, providing that economic conditions
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Forex: USD/JPY pressured by G20, closer to 92.00

Having weakened to 92.25 low on risks of Japan policy intentions being publicly condemned by the G-20 and speculation about a less radical incoming BoJ Governor, the USD/JPY attempt to erase losses didn't last long as European officials talked down exchange rate policies and called for focus on reforms. This second downward momentum found its low at 92.23, and the market is currently erasing losses.
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