It was a Japanese holiday today, markets were closed. As I post there has been no sign of Bank of Japan intervention nor any comments to support the yen from officials.

Over the weekend US Treasury Secretary Yellen spoke, not sounding too supportive of Japan’s intervention to send the yen higher. Yellen was not unsupportive, she was just lukewarm. This should be no surprise as we were given clear clues last week on this.

From opening lows around 152.85 or so in very early Asian trade USD/JPY has moved higher through the session to be circa 153.95 as I post.

In other weekend news, Saudi Aramco raised the June official selling price of Arab Light crude for customers in Asia. This has offered some support to oil prices in futures trade to open the new week.

And, the weekend news is not done. On Saturday Warren Buffett’s Berkshire Hathaway released its first-quarter earnings report. In this was the bombshell that the firm had cut its Apple stake in Q1 by 13%. This weighed on Nasdaq futures (NQ) trade somewhat.

As for Asia news and data flow, news was of little impact and data flow was notable only really for another solid expansion for China’s Caixin Services and Composite PMIs. The services PMI has registered expansion now for 16 consecutive months. Other PMIs from China for April have all been shown to be in expansion also, further evidence of the developing economic recovery in the country.

Chinese markets reopened after being closed on Wednesday, Thursday and Friday. We had the first People’s Bank of China USD/CNY reference setting since Tuesday last week, the PBOC lifted the CNY to its highest in 3 weeks (ie lowest for USD/CNY). The reference rate that was set was more than 1130 pips from the Reuters estimate. The PBOC has been setting the rate a huge distance away from the estimate, an effort to hold the yuan from devaluation (ps. I prefer the term devaluation for the yuan rather than depreciation, which I keep for floating currencies. Given the huge manipulation efforts the PBOC direct at propping up the yuan every single day its clearly a managed currency, not floating. Whataboutism comments welcome, whatever floats yer boat - pun intended ;-) ).

Further on the central bank front, European Central Bank Chief Economist gave an interview to Spanish media, dropping pretty clear hints about a June rate hike coming up, but not guaranteeing it.

Australian Treasurer Chalmers dropped pretty clear hints also, about a budget surplus coming up this month from his government. Chalmers is under pressure to trim fiscal stimulus given sticky high inflation, and take some pressure off the RBA. We had a private survey of inflation in Australia published today, showing inflation dribbling a little lower; the y/y headline at 3.7% is a two-year low, while the core trimmed mean measure at 3.2% y/y, is its lowest since June of 2022.

AUD and other major FX apart from the JPY maintained small ranges only.

usdyen Monday, 6 May 2024 wrap yellen 2