Asia Session: We will have a bank supervisory agency for the Eurozone, we just don’t know when
Asia Session
Updated Oct 19, 2012 12:29:12 AM Written by Chris Tedder
All
eyes were on the EU summit, with officials meeting to discuss numerous
things, from banking supervision to the overall effectiveness of
measures aimed at restoring confidence in Europe. But sadly not a
possible Spanish bailout. The fact that officials didn’t even discuss
the latter was not surprising. Chatter over the last few days made it
fairly obvious it wasn’t on the agenda. Thus, price action was not upset
by the lack of talk on Spain. In fact, throughout the press conference
that followed the first day of talks in Brussels price action across the
board was fairly stable.
Bank supervision on the agenda in Brussels
Before the summit investors were on the lookout for details about European bank supervision, and EU officials delivered…sort of. It was announced that the ECB will supervise all Eurozone banks. But there is still no definite confirmation on when it will be implemented, all we got was an indication it should take place during 2013 and the objective is to have the legal framework finished by January 1. The announcement is, however, a step in the right direction. Germany hasn’t been a fan of the idea of a single bank supervisor for all of the Eurozone as it is wary of using taxpayer money to prop-up struggling banks in other countries, something which would likely happen if the Eurozone pushes towards a full banking union.
Chinese FDI falls once again
In other news, China’s FDI continued to fall in September, sliding by 6.8% y/y. The data represents the 9th straight month of declines, and emphasises the attitude of economies’ throughout the world that are looking within their own borders. Whilst recent GDP data out of China isn’t suggestive of a hard landing for the world’s second largest economy, it does highlight the problems facing Beijing as they attempt to balance inflation concerns with growth.
Data watch
In New Zealand, the only headline data release of the session was credit card spending. Official data showed that credit card spending increased 1.5% y/y to September. The figures weren’t market moving however, thus the kiwi was largely unaffected.
Price action
NZDUSD held fairly steady throughout the session, as did the other majors. EURUSD bounced off support around 1.3055, whilst AUDUSD managed to spend most the session above 1.0360. The biggest mover was in fact gold, which fell below USD1740 early in the session and continued on towards USD1735, before finally coming to a stop around 1736.
China’s FDI
Bank supervision on the agenda in Brussels
Before the summit investors were on the lookout for details about European bank supervision, and EU officials delivered…sort of. It was announced that the ECB will supervise all Eurozone banks. But there is still no definite confirmation on when it will be implemented, all we got was an indication it should take place during 2013 and the objective is to have the legal framework finished by January 1. The announcement is, however, a step in the right direction. Germany hasn’t been a fan of the idea of a single bank supervisor for all of the Eurozone as it is wary of using taxpayer money to prop-up struggling banks in other countries, something which would likely happen if the Eurozone pushes towards a full banking union.
Chinese FDI falls once again
In other news, China’s FDI continued to fall in September, sliding by 6.8% y/y. The data represents the 9th straight month of declines, and emphasises the attitude of economies’ throughout the world that are looking within their own borders. Whilst recent GDP data out of China isn’t suggestive of a hard landing for the world’s second largest economy, it does highlight the problems facing Beijing as they attempt to balance inflation concerns with growth.
Data watch
In New Zealand, the only headline data release of the session was credit card spending. Official data showed that credit card spending increased 1.5% y/y to September. The figures weren’t market moving however, thus the kiwi was largely unaffected.
Price action
NZDUSD held fairly steady throughout the session, as did the other majors. EURUSD bounced off support around 1.3055, whilst AUDUSD managed to spend most the session above 1.0360. The biggest mover was in fact gold, which fell below USD1740 early in the session and continued on towards USD1735, before finally coming to a stop around 1736.
China’s FDI
Source: Bloomberg
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