Currency markets may yield a limited response to minutes from November’s BOE minutes and the US data set as liquidity drains before the Thanksgiving holiday.

Talking Points

Japanese Yen, US Dollar Diverge on Mixed Sentiment Cues in Asian Trade
BOE Meeting Minutes Unlikely to Yield Follow-Through from British Pound
S&P 500 Futures Point to Flat Risk Trends as Markets Settle for US Holiday

The Japanese Yen underperformed in overnight trade, down against all of its major counterparts, as Asian stocks advanced and sapped demand for the regional safe-haven currency. The newswires chalked up the cautious advance to another supportive set of US housing data released earlier in the day. While such outcomes buoy the outlook for Asian exporters sensitive to US demand, overall landscape was far from positive. Eurozone finance ministers failed to reach an agreement on Greek bailout funding while reports of below-the-surface tension between US officials working to avoid the so-called “fiscal cliff” began to make the rounds. This duality perhaps explains the advance in the likewise safety-linked US Dollar, where global jitters seemed to matter more than Asian growth prospects.

Looking ahead, the spotlight is on the Bank of England as it releases minutes from November’s monetary policy meeting. Barring a particularly sharp pivot in the voting pattern on the rate-setting MPC, the report seems likely to carry less weight than usual this time around considering much of what is likely to emerge was already telegraphed in the quarterly inflation report released last week. The final revision of November’s University of Michigan gauge of US consumer confidence as well as October’s Leading Indicators print headlines the docket in North American hours, but follow-through is likely to prove lacking as liquidity thins ahead of the Thanksgiving holiday. S&P 500 futures are trading flat, offering little guidance on the direction bias behind risk sentiment trends.

Asia Session: What Happened

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