11, June 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

The weak data makes markets focus on government policies as the main source of salvation. The news is important, but mostly only to the extent that hinted at a new policy of the central bank or government policy.

Virtually all the world's commercial asset markets continued to move on speculation of official policy. Rumors about possible Fed's quantitative easing program closing remain in the focus for the markets.

Increasing volatility on May 22, when Bernanke and the Fed meeting confirmed these rumors, confirmed the primacy of QE sentiment for the week ahead and beyond.

We continue to see examples of bad U.S. economic data, increased appetite for risk, as fears of contraction are reduced. For example, on Monday, U.S. stocks moved up strongly, as the markets have come to the conclusion that the disappointing manufacturing data suggest that the Fed will postpone plans to minimize the QE. On Tuesday, the Nikkei jumped 2.05% on the same news.

Market reaction to the official monthly jobs report in the U.S. proved that speculation on the QE lowering is the main driver of the market.

Official policies in Europe and Japan also had an impact on the movement of the market last week.