{"id":113873,"date":"2017-10-02T07:12:15","date_gmt":"2017-10-02T11:12:15","guid":{"rendered":"http:\/\/countingpips.com\/?p=113873"},"modified":"2017-10-02T07:03:31","modified_gmt":"2017-10-02T11:03:31","slug":"catalonias-independence-vote-drags-the-euro","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/10\/catalonias-independence-vote-drags-the-euro\/","title":{"rendered":"Catalonia\u2019s independence vote drags the Euro"},"content":{"rendered":"
October 2, 2017<\/div>
\r\n<\/div><\/div>

Article by ForexTime<\/a><\/p>\n

\n
\n
\n

The Euro came under pressure early Monday, falling more than 0.4% against the USD, after preliminary results from the weekend\u2019s Catalonia referendum showed 90% of Catalans are in favor of independence.<\/p>\n

There\u2019s a high chance that Spain may be headed towards a new crisis, especially if Catalonia\u2019s President\u00a0 Carles Puigdemont declares independence, as he has promised to do in the next 48 hours. This will lead to more violence and probably an intervention from EU leaders, who will come under pressure to take action.<\/p>\n

Traders should be monitoring spreads between Spanish and German bond yields in the next couple of days. If spreads widen significantly, investors will be seriously worried about the outcome of the referendum vote, leading to a further selloff in the Euro, but this is not evident yet.<\/p>\n

Catalan\u2019s referendum is not the only reason for the fall in EURUSD. In fact, the dollar is rising across the board, as the U.S. Treasuries yield curve shifted upwards. Given that there wasn\u2019t any new fundamental information released over the weekend, reports that former Federal Reserve governor Kevin Warsh had met with President Trump and Treasury secretary Steven Mnuchin, for a possible nomination to Chair the Fed, is the only explanation for the shift in the yield curve. We do not yet know how Warsh will lead the Fed in a Trump Era, but given the reaction seen in bond markets, investors see him as a more hawkish candidate the Yellen.<\/p>\n

Speculation around the Fed Chair appointment will keep fixed-income traders busy in the days to come, and currency traders will benefit from the moves in yields. However, this speculation should end when the President announces the name of his nominee in two to three weeks.<\/p>\n

The European economic calendar is relatively light this week. Traders will be focusing on PMI data from the U.K., the jobs reports from the U.S. and Canada, and the Reserve Bank of Australia interest rate decision.<\/p>\n

The U.S. NFP is likely to deviate hugely from this year\u2019s average. Economists are currently anticipating a figure less than 100K. However, I do not think this will have a negative impact on the dollar, given that investors know hurricanes Harvey and Irma will distort the data.<\/p>\n

Fed speak will likely continue guiding traders, and Janet Yellen will again appear on Wednesday to deliver the opening remarks at the 21st Century Conference in St. Louis. Fed officials Robert Kaplan, Jerome Powell, Patrick Harker, and Bill Dudley, are all due to speak this week.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

Disclaimer:\u00a0<\/strong>The content in this article comprises personal opinions and should not be construed as containing personal and\/or other investment advice and\/or an offer of and\/or solicitation for any transactions in financial instruments and\/or a guarantee and\/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.<\/em><\/p>\n

\n

\"Forex-Time-Logo\"Article by ForexTime<\/a><\/span><\/strong><\/p>\n

ForexTime Ltd (FXTM)<\/strong> is an award winning international online forex broker regulated by CySEC 185\/12 www.forextime.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Article by ForexTime The Euro came under pressure early Monday, falling more than 0.4% against the USD, after preliminary results from the weekend\u2019s Catalonia referendum showed 90% of Catalans are in favor of independence. There\u2019s a high chance that Spain may be headed towards a new crisis, especially if Catalonia\u2019s President\u00a0 Carles Puigdemont declares independence, […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-113873","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/113873","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=113873"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/113873\/revisions"}],"predecessor-version":[{"id":113884,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/113873\/revisions\/113884"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=113873"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=113873"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=113873"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}