- US seeks to buy 6mn barrels for its oil reserve by Jan. At $79. Price can't be serious?
- Federal Reserve officials, Harker and Mester, speak later on Friday
- India is rejecting pressure from Russian oil suppliers to pay for crude imports in yuan
- China tightens restrictions on some graphite exports
- Bank of Japan Governor Ueda is speaking soon - 0635 GMT
- PBOC sets USD/ CNY reference rate for today at 7.1793 (vs. estimate at 7.3055)
- PBOC Loan Prime Rates (LPR) remain unchanged at today's rate setting, as expected
- Japan's Suzuki: Important for currencies to move in stable manner, reflect fundamentals
- ICYMI: New York Fed's Weekly Economic Index rose to its highest since November last year
- BOJ will extend 5-year loans to financial institutions, effort to contain elevated yields
- ICYMI - Japan's Mr. Yen threatened to use the intervention stick again
- US/Coalition airbase in Iraq targeted by rocket attack
- Japan September Inflation:Headline inches lower than in August, still above 2% BOJ target
- More from Fed's Logan: Tighter financial conditions desired, will slow the economy
- Fed's Logan says is not yet convinced we are moving to 2% inflation
- Musk on the economy: “I’m not saying things will be bad. I’m just saying they might be."
- Morgan Stanley says Anti-obesity drugs have trimmed market value by $258bn
- New Zealand data: September exports and imports slightly lower m/m
- Fed's Bostic says he hasn't seen a wage-price spiral
- Fed Harker says data is a little stronger than his forecasts, supports more hikes if need
- ICYMI: Powell’s comments have given a green light to further selling US Treasuries
- Germany adds to chorus of countries advising citizens leave Lebanon
- Moody's has placed Israel's A1 rating on review for downgrade
- Forexlive Americas FX news wrap: Powell pop faded hard as Gaza invasion feared
- Trade ideas thread - Friday, 20 October 2023
Middle East news was fairly quiet during the session here. Speculation is rife that the ground moves on Gaza will commence this weekend, perhaps the eerie quiet is support for this. US Treasuries rose a little during the session (i.e. yields dipped). If there are moves on the ground into Gaza a market ‘flight to safety/liquidity’ response should play out, I expect further gains for USTs as we get closer to the weekend.
The FX space was fairly quiet. AUD and NZD dipped but have retraced to be barely changed on the session as I update. GPB and EUR followed a similar pattern. Current favourite CHF (another perceived safe haven) is also little changed.
USD/JPY was interesting. After Japanese inflation data (more on this to come) USD/JPY ticked higher towards 150, again. Japanese Finance Minister Suzuki dropped a few verbal intervention remarks into play. These were nothing out of the ordinary. Were they effective? USD/JPY has dribbled back under 149.85 so, on the face of it, perhaps yes.
With little news crossing the attention turned to data, with Japan CPI data for September published. Japan's core inflation, which excludes volatile fresh food costs, rose 2.8% in September from a year earlier, slowing below 3% for the first time in over a year. Obviously, that is well above the Bank of Japan target at 2%, and has been for 18 months now.
The core-core index, which strips away fresh food and fuel costs and is the closest to the US measure of core inflation rose 4.2% in September from a year earlier, from a 4.3% gain in August.
On the central bank front, we had some blunt comments from Federal Reserve Bank of Dallas President Lorie Logan, including her view that she is not yet convinced the US is moving to 2% inflation.
A little later, from the People’s Bank of China, we had the monthly setting of Loan Prime Rates (LPRs). Both the one- and five-year remained unchanged at 3.45% and 4.2% respectively. The PBOC set the USD/ CNY reference rate for today on the 7.17 big figure, again. Of note was that the net 733bn yuan injection on the day in Open Market Operations was the biggest ever on record. Combine that with the chunky 789bn yuan Medium-term Lending Facility (MLF) earlier in the week (500bn matured), which was the largest since December 2020. Some easing via these tools, albeit limited, this week from the PBOC.
In news for oil markets, the US Department of Energy is seeking to buy 6 million barrels of crude oil for delivery to the Strategic Petroleum Reserve in December and January. Please put down your cup of coffee or tea now. You ready? The department hopes to sign purchase contracts for the oil at $79 a barrel or less. Good luck with that.
Yields dipped back a little:
