- European Central Bank monetary policy meeting preview - guidance should be less definitive
- Chinese Industrial Profits data for June 2023: -8.3% y/y (prior -12.6%)
- Australian terms of trade data: Export prices -8.5% q/q, Import -0.8%
- PBOC sets USD/ CNY reference rate for today at 7.1265 (vs. estimate at 7.1468)
- Bank of Japan meet Friday. BNP is expecting the BOJ to widen YCC to +/- 100 bps (from 50)
- Federal Open Market Committee (FOMC) response - Fed Funds peak is in, 1st cut in March '24
- Nomura still expecting another Reserve Bank of Australia rate hike, but not until November
- UK car output rises for fifth straight month in June - SMMT data
- Big changes at the Reserve Bank of Australia - policy meeting dates for 2024 announced
- JP Morgan on the 'stealth stimulus' supporting the US economy even after rapid rate hikes
- European Central Bank policy meeting Thursday, 27 July 2023 - preview -
- Goldman Sachs lowered their terminal RBA rate forecast to 4.6% (previously at 4.8%)
- Forexlive Americas FX news wrap 26 Jul: Fed raises rates by 25 bps to 5.5%. 22-year high.
- ICYMI - NAB changed forecast for RBA next week to 'on hold' (prior was +25bp rate hike)
- US equity close: Dow extends winning streak to 13 sessions
- Trade ideas thread - Thursday, 27 July 2023
The US dollar lost further ground during Asian trade as I post. All major FX posted gains against the big dollar. The People’s Bank of China wil be happy with the weaker dollar, the Bank has been defending the yuan and it rallied further today. While on China, data from there showed Chinese industrial companies' profit fell 16.8% y/y in H1 of 2023, compared with an 18.8% fall in January – May.
NZD, AUD, EUR, GBP, CAD and CHF all added points against the US dollar. As for USD/JPY it was a mover also, falling to lows under 139.50. Its just above there as I post. USD/JPY implied volatility drive strongly higher also, jumping to highs not seen since 9 March. The Bank of Japan is meeting today and tomorrow and the jump in volatility may be indicative of market perception that some sort of change or tweak is coming from the Bank. I should caveat this by saying volatility has jumped in the days and hours ahead of meetings this year. The, at the time, Governor of the Bank of Japan Kuroda’s December yield curve tolerance band ‘tweak’ surprise has driven complacency from BOJ meeting expectations. Nevertheless the surge today is bigger than usual.
Asian equity markets:
Japan’s Nikkei 225 +0.2%
China’s Shanghai Composite +0.5%
Hong Kong’s Hang Seng +1.6%
South Korea’s KOSPI +0.7%
Australia’s S&P/ASX 200 +0.8%
