- BOJ to discuss hike to 0.25% - report
- Another Bank of Japan leak says 0.25% is under consideration
- Nikkei reiterates the worst kept secret. BOJ considering hike to 0.25%
- US JOLTS job openings 8.184M vs 8.000M estimate
- US July consumer confidence 100.3 vs 99.7 expected
- US May CaseShiller 20-city house price index +6.8% y/y vs +6.7% expected
- Japan new to FX diplomat: Only natural solution to yen weakness is to improve economy
- Polls and betting markets show a close race for President again
- Dallas Fed July services sector revenue index 7.7 vs 1.9 prior
Markets:
- Gold up $25 to $2408
- US 10-year yields down 3.5 bps to 4.14%
- WTI crude oil down 70-cents to $75.15
- S&P 500 down 0.5%, extends losses after hours
- JPY leads, GBP lags
The yen jumped just hours ahead of the Bank of Japan decision on a trio of reports that officials were considering a 15 bps hike today. Previously the market only contemplated 10 bps or nothing and that kind of hawkish shift would be a surprise with the potential to keep the yen rebound going.
That said, the leak led to a 50 pip decline in USD/JPY that presents two-way risks. The bond market is also a factor as US 120-year yields fell to the lowest since March in the third day of declines.
The market is also sniffing out a Bank of England cut as short-dated gilt yields fell and the pound stayed under pressure even as the dollar declined elsewhere.
The risk mood deteriorated as the day went on and worsened after the close in a 6% drop in MSFT shares after earnings. That was mitigated somewhat by AMD earnings, though it's still early in the earnings-digestion process.
