- The Swiss National Bank will be publishing a report on monetary policy on Wednesday
- BOJ will intervene if USD/JPY threatens break of 150: "intervention ... the last option"
- China industrial profits data for May fall again - NBS cites hit from insufficient demand
- Australian dollar marked lower with the CPI data coming in well under what was expected
- Australian monthly CPI (May) 5.6% y/y (vs. expected 6.1%)
- PBOC sets USD/ CNY mid-point today at 7.2101 (vs. estimate at 7.2092)
- On USD/JPY towards 145: "We are now approaching FX intervention territory "
- Data on Tuesday showed inflation well off its highs in Canada - Bank of Canada implication
- An optimistic take on promises from China’s Premier Li Qiang for stimulus measures
- 145-150 in USD/JPY nominated as the area to watch for Bank of Japan yen intervention
- JP Morgan’s Kolanovic doesn't like stocks for H2 2023: "risk-reward remains unattractive"
- Japan's Kanda (yen intervention guy) says will take appropriate action in excessive moves
- Goldman Sachs raised their Q2 US economic growth tracking estimate due to better data flow
- Wall Street Journal: U.S. Considers New Curbs on AI Chip Exports to China
- US President Biden says the economy is so strong now that he doesn't expect a recession
- It's a FED, ECB, BOJ, BOE bonanaza today - Powell, Lagarde, Ueda, Bailey all speaking
- Barclays says there are "cautious warning signals" the US labor market is cooling
- Forexlive Americas FX news wrap: US consumer confidence jumps
- Private oil survey data shows larger headline crude draw than was expected
- Trade ideas thread - Wednesday, 28 June 2023
The Australian dollar took a hit during the session on the release of May 2023 monthly inflation data. This came in at 5.6%, well below the 6.1% consensus mid-point estimate. Core measures for the month remained above 6% but it was the headline that the market responded to, immediately marking down the AUD. While the monthly CPI print has caveats, the data does not cover the entire ‘basket’ that the quarterly CPI does for example, we don’t get the more reliable quarterly data until late in July. The Reserve Bank of Australia meet next week, July 4, and it would appear the data today is enough for the Bank to leave its cash rate unchanged at this meeting.
While AUD/USD lost ground sharply there losses against the USD also for NZD, CAD, EUR, GBP and CHF, so it wasn’t entirely an AUD story.
From China today we had
- the People’s Bank of China setting the CNY reference rate nearly bang on 7.21, keeping offshore yuan well off its lows of the week
- further slumping industrial profits data, for May. While these were not as weak as in April they were still negative y/y
USD/JPY is little changed on the session. We had some yen-supportive remarks from Japan's Finance Ministry's Vice Finance Minister for International Affairs Kanda. He is the guy who will instruct the BOJ to intervene, when he judges it necessary and is often referred to as Japan's 'top currency diplomat'. USD/JPY dipped under 143.80 but has since traded back up above 144.00.
Earlier in the session the Wall Street Journal reported that the Biden administration is considering new restrictions on exports of artificial intelligence chips to China. This kept NQ well away from the highs it managed on Tuesday, US time, and weighed on tech stocks in China also.
As I post oil prices are firming a touch, with WTI futures heading towards $68. During the US afternoon the privately surveyed inventory data showed a larger than expected headline crude draw.
Asian equity markets:
Japan’s Nikkei 225 +0.9%
China’s Shanghai Composite -0.6%
Hong Kong’s Hang Seng -0.2%
South Korea’s KOSPI -0.5%
Australia’s S&P/ASX 200 +1%
Tracking NQ on Globex:
(This chart is from our charting app, which is free and can be found at this link)
