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Will the AUD bullish turn bounce?

Tuesday, September 15, 2015 2:18 PM GMT

 - BoJ Governor Kuroda: ''Virtuous economic cycle working in Japan's economy; inflation expectations rising from a longer-term view.  CPI is also expected to reach around +2% in 1H of FY2016; timing of hitting +2% inflation target depends on oil. BoJ to continue QQE policy until +2% inflation is stable; will check risks, adjust policy as appropriate.'' In general, BoJ ''Voted 8-1 to keep monetary base target unchanged, BOJ's Kiuchi proposed lowering monetary base target to 45T Yen.''

- RBA: Fed rate rise could have significant impact on markets, while an $AUD depreciation is expected to support growth. Increased downside risks to global growth outlook, indications growth in home loans to investors has slowed. Too early to assess impact of global developments, impact of Chinese capital flows on markets could be large.

- Greek PM Tsipras: There will be a government  immediately after elections.

- Will the AUD ‘Turn(s)bull Bounce’ ? So just like that, Australia has a new Prime Minister! Welcome ex Goldman Sachs executive director, Malcolm Turnbull. Whether you agree that it is right for backroom politics to decide to oust a Prime Minister that has been voted in by the Australian people, Forex markets have reacted well to the coup that ousted Tony Abbott, with the Aussie Dollar rising to new weekly highs. As you can see from yesterday’s AUD/USD 5 minute chart, the instability of a leadership challenge caused the Aussie to first sell off, but as it became more and more clear that a change was coming, the buyers came in. Technically, the pair is testing the September high price at 0.7152, and holding (the high reached 0.71508). The 50% of the move down from the August 11 high (at 0.74387) comes in at 0.71677.

- Asian shares traded mixed early Tuesday, as investors digest the Australian leadership change and await a central bank decision in Japan. An unimpressive handover from Wall Street also kept a lid on risk appetite. Major U.S. averages closed down modestly overnight, as investors put off making big bets ahead of the Federal Reserve's highly-anticipated meeting this week. The Dow Jones Industrial Average and the S&P 500 declined 0.4 percent each, while the tech-heavy Nasdaq inched down 0.3 percent. China's Shanghai Composite index declined 1.85 percent, trimming losses slightly after opening down 2.3 percent.

- The epic Janet Yellen cartoon from Bidness Etc welcomes you to September FOMC week! Yes, it’s finally here. Recent market turmoil has meant that markets are now only pricing in a 28% chance that the Fed raises rates on Thursday, but are up at 59% for the Fed to move in December. With Fed policymakers week after week talking up market turmoils and a slowdown in China as reasons for a wait and see approach come Thursday, markets have had plenty of reasons to push out their September bets. USD longs have been cut heading into Thursday’s decision, with the trend change on USDX confirmed with no higher high.

- Oil futures ended lower on Monday, once falling on worries about China coupled with worries about a U.S. interest rate hike from the Fed this week. A pair of economic reports showed weaker-than-expected industrial production in China. That and a persistent glut in supply led Saudi Arabia, Iran and Iraq all to cut their official prices for October deliveries to Asia this month. Traders are also bracing for more volatility and possibly lower oil prices in coming weeks. Goldman Sachs (GS) said last week that U.S. oil prices could fall to as low as $20 a barrel.

- Gold Flat as Market Ready for Fed; Oil, Copper Weak on Economic Woes .

- EUR French CPI EU Harmonized (AUG): +0.4% versus +0.3% expected, from -0.5% (m/m); +0.1% versus +0.2% expected unchanged (y/y).

- $USDJPY fell more than 0.2% after #BOJ retained its annual rise in monetary base at ¥80T...in the time being, settling near session lows near 119.65 amid BoJ's Kuroda's speech on latest monetary policy statement.

- MAJORS (vs GBP): JPY +0.64%; CAD +0.14%; USD +0.14%; CHF +0.06%; EUR -0.07%; AUD -0.28%; NZD -0.33% (15 Sep @ 06:52:55 AM GMT).

- Today’s Upcoming Events:German ZEW, GBP CPI,  US Core Retail Sales.

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