- Goldman Sachs estimate +149K for US non-farm payrolls
- Japan finance minister Suzuki says sudden FX moves are undesirable
- Russia's Novak will announce his crude oil output plans next week
- Federal Reserve officials speaking Friday include Bostic and Mester
- China data: Caixin/S&P Global August 2023 Manufacturing PMI: 51.0 (expected 49.3)
- Australian data: July home loans -1.9% m/m (expected -1.0%)
- AUD, NZD, JPY all higher following the PBoC FX RRR cut, the first since September 2022
- PBOC sets USD/ CNY reference rate for today at 7.1788 (vs. estimate at 7.2967)
- People's Bank of China to cut FX RRR from 6% to 4% from September 15
- UBS forecasts the S&P 500 to 5200 if AI proves to be a game changer (& 2 other factors)
- Japan Jibun final August PMI: Manufacturing 49.6 (prior 49.6)
- Forecast for the European Central Bank to pause hiking in September
- South Korea August exports dropped 8.4% y/y, imports down also
- Further rate cuts in China - Bank of China cuts yuan deposit rates
- Japan data: Q2 Corporate Capital spending +4.5% y/y (vs. expected +5.4%)
- Goldman Sachs now expect only a 20% chance of a US recession in the next 12 months
- Australia Manufacturing PMI final for August: 49.6 (prior 49.6) & strongest since February
- The Hong Kong exchange opening has been delayed due to approaching super typhoon
- JP Morgan revise their Q3 US real GDP forecast to 3.5% (from 2.5%)
- New Zealand data - August consumer confidence 85.0 (vs. prior 83.7)
- New Zealand's main opposition party wants to quickly remove the RBNZ's dual mandate
- Goldman Sachs says new China property buying rules could give a 'modest' growth impulse
- China to cut home-buyers' minimum down payment, and mortgage rates
- Forexlive Americas FX news wrap: US dollar backs off ahead of non-farm payrolls, oil jumps
- ICYMI - China's Industrial Bank cuts yuan deposit rates
- ICYMI: China's State Council announced an income tax reduction aimed at consumption boost
- US equity close: Late selling leads to a mixed day
- Trade ideas thread - Friday, 1 September 2023
- Non-farm payrolls preview: Why August jobs are likely to disappoint
China announced a cut in its FX Reserve Requirement Ratio by 200 basis points (bps) from 6% to 4% from September 15th. What this means is that China reduced the amount of foreign currency deposits banks are required to hold as reserves. It last did so in September of 2022 when the yuan was also being subject to a bout of weakness. The cut is a visible step to free up dollar liquidity and prop up the yuan. Last week Nomura nominated the move as one that the People’s Bank of China could take to support the yuan:
The announcement prompted buying of yuan, and also AUD, NZD and JPY. AUD and NZD have unwound the move while USD/JPY is still lower on the session. USD/CNH is back to more or less unchanged also.
The FX RRR cut was the big news of the session. We also had an upside surprise for the Caixin/S&P Global August manufacturing PMI. It leapt into expansion vs. the contraction that had been expected. Other manufacturing PMIs from the region registered contraction for the month.
Following deposit rate cuts announced by some Chinese banks on Thursday more followed on Friday.
The Hong Kong Exchange closed due to the impact of Super Typhoon Saola
Asian equity markets:
Japan’s Nikkei 225 +0.6%
China’s Shanghai Composite +0.3%
Hong Kong’s Hang Seng 0% (Closed, see above)
South Korea’s KOSPI -0.1%
Australia’s S&P/ASX 200 -0.4%
Offshore yuan rose (USD/CNH dropped) on FX RRR cut announcement and then retraced:
