- The RBA hiked its cash rate this week by 25bp vs 50 consensus - slower pace ahead expected
- Japan's PM Kishida verbal yen intervention - recent sharp, one-way moves are undesirable
- A heads up for data coming from China over the weekend - services PMI
- Deutsche Bank bump their rate hike forecasts from the BoE a little lower
- More on Goldman Sachs raising its oil price forecast - OPEC+ output cut 'very bullish'
- Nonfarm payroll (NFP) preview - Société Générale look for headline +280K
- Goldman Sachs are estimating +200K for the nonfarm payroll headline
- Reserve Bank of Australia says the risks to financial stability have increased globally
- FX option expiries for 07 October 2022 10am New York cut
- Crypto exchanges says "Your funds are safe. "
- More from Mester - The Federal Reserve will not be cutting rates at all in 2023
- USD/JPY not showing much response to the data, straddling 145
- Japan data - August Overall Household Spending +5.1% y/y (expected 6.7%)
- Japan data - August Labor Cash earnings 1.7% y/y (expected 2.5%)
- RBA Financial Stability Review is due soon - is likely to be scrutinized closely
- Fed's Mester: Right now the Fed needs to be focused on getting inflation down, not jobs
- Goldman Sachs likes a short NZD against CAD - likes CAD generally on crosses
- Waller (more) - The Fed needs to be aggressive to get inflation down to target
- More from Fed's Waller - chance of a soft landing falls the more aggressive Fed has to be
- Guggenheim’s Minerd says the Fed is going to keep raising rates until something breaks
- Trade ideas thread - Friday, 7 October 2022
- Fed's Waller wants continued rate hikes until meaningful, persistent progress on inflation
- Major US stock indices close lower for the 2nd consecutive day
- Forexlive Americas FX news wrap: USD moves higher ahead of the US job report
- US looking at OPEC options over oil cut: break up the cartel, WTO charges, asset seizure
Major FX rates traded in subdued ranges for the session here, waiting for the US nonfarm payroll report the excuse du jour.
Despite this there were three interesting points to come out of the session. Two of them were officials from the Federal Reserve speaking:
- Christopher Waller, a member of the Federal Reserve Board of Governors
- then Federal Reserve Bank of Cleveland branch President Loretta Mester
Both stuck to the mantra of further rate hikes to come from the Federal Open Market Committee (FOMC) without pause in order to bring the US inflation rate back towards its 2% target. Waller gave a nod to data-dependence while Mester was more assertive, going as far as ruling out any rate cuts right through 2023.
Also today we had yen intervention remarks from Japanese Prime Minister Kishida. USD/JPY was above 145 early in the session and spent much of it straddling the figure. Wheeling out the PM to comment on the currency is a step up from having the finance minister make statements. Kishida hit intervention warning words in his script, talking of:
- sharp moves
- one-sided yen moves
- speculative FX moves
These are clear warnings that actual yen-buying intervention is not too far away (see the post above for links to further information on what to watch for imminent yen buying by the Bank of Japan). Above 145.70 was the trigger for yen buying last time around, we are not too far from there. USD/JPY, like other major FX, has not had a wide range on the session, its currently just under 145.00 as I update.
