- Japan data: October Industrial Production (final) +1.3% (prior +0.5%)
- Barclays expect 3 FOMC rate cuts in 2024 (vs. prior one)
- USD/JPY hits 141.00
- USD/JPY decline ahead of Bank of Japan meeting, downside beyond meeting is uncertain
- Japan's ruling party introduces income tax breaks to alleviate the impact of price hikes
- USD/JPY under 142.00
- Berkshire Hathaway buys another half billion $ of Occidental Petroleum shares
- Deflation threat looms in China as GDP deflator contracts for second consecutive quarter
- 175bp of rate cuts forecast from the Federal Open Market Committee (FOMC) in 2024
- PBOC sets USD/ CNY reference rate for today at 7.1090 (vs. estimate at 7.1566)
- Nasdaq system error causes stock chaos, orders cancelled
- Australian dollar a little higher after the very strong jobs report
- Australia Nov. Employment change +61.5K (expected +11K) Unemployment rate 3.9% (exp 3.8%)
- Australian Consumer Inflation Expectations for December: 4.5% (prior was 4.9%)
- Japan October Machinery orders +0.7% m/m (vs. expected -0.5%)
- Some Federal Reserve officials changed their forecasts half way through the FOMC meeting
- USD/JPY is extending its losses, on approach to 142.00
- UBS analysts expect only a modest upside for US and global equities in 2024.
- Fed's more aggressive easing path ignites speculation on timing of rate cuts
- New Zealand dollar marked lower after data shows the economy is in contraction
- New Zealand Q3 GDP -0.3% q/q (vs. +0.2% expected)
- Brazil's central bank cut its Selic rate by 50bp, as expected
- Is the Bank of Japan planning to exit negative rates sooner than expected?
- Asian Economic Calendar: Key Events and Consensus Expectations for 14 December 2023
- Trade ideas thread - Thursday, 14 December, insightful charts, technical analysis, ideas
- Forexlive Americas FX news wrap: 2024 dot falls further. No pushback from Powell.
The US dollar lost further ground during the Asian session following on from the bombshell pivot from the Federal Open Market Committee (FOMC) and Federal Reserve Chair Powell on Wednesday.
EUR, AUD, NZD, GBP, CHF, CAD; all gained further ground vs. the big dollar.
But the star of the show was JPY. Exiting US trade it was just below 143.00, and quickly dropped towards 142.00 with only New Zealand and Australian markets active. This is an especially thin liquidity time of the 24-hour forex cycle and is often a venue for over-extended capitulation moves. Not today, though. After a brief respite when USD/JPY rose back near 143 Tokyo, Singapore and Hong Kong all weighed in, sending the pair briefly under 141.00 as the session progressed. All yen crosses followed a similar pattern, all have been smashed lower on the day. helping it lose ground today was the media report speculating that a BOJ pivot could come as early as January , (see the "Is the Bank of Japan planning to exit negative rates sooner than expected?" post above).
Markets are, of course, eyeing the convergence of Japanese vs. elsewhere monetary policies as Japan readies to unwind its super-easy policy while other DM central banks prepare to ease back from their tightening. There is much yen-carry trade to undo. As for timing, that is uncertain but, today at least, markets were happy to get in early.
While the follow-through from the FOMC was the focus, a few items from the region shifted around rates.
- New Zealand Q3 GDP was a shocker, a huge miss on estimates and an economic contraction. NZD/USD was marked down on the data. It spent some time languishing around 0.6175 before rallying back to rise above 0.6230.
- From Australia we had the November employment report. This showed a huge beat in jobs added, up over 61K vs. +11K expected, but a miss on the unemployment rate, 3.9% vs. 3.8% expected. The participation rate was higher, a record high as it happens. There is more in the posts above, including RBA implications. The TL;DR on this, IMO, is that the February (5th and 6th) meeting remains live pending the quarterly CPI report due on January 31. AUD/USD climbed higher, briefly to 0.6725 and its not a lot down from there as I post.
Still ahead for Thursday are the policy decisions from the Swiss National Bank, Bank of England, and European Central Bank. The fun has barely begun!
- This snapshot from the ForexLive economic data calendar, access it here.
- The times in the left-most column are GMT.
- The numbers in the right-most column are the 'prior' (previous month/quarter as the case may be) result. The number in the column next to that, where there is a number, is the consensus median expected.
