Headlines:
- USD/JPY stays pressured as lower yields weigh
- ECB's Muller: Temporary acceleration in inflation is likely
- ECB's Holzmann: There could be room for another rate cut in December
- ECB's Villeroy: We should continue to reduce gradually and as appropriate
- ECB's Rehn says will continue to base policy decisions on assessment of inflation outlook
- ECB's Vasle: We are not committed to any predetermined rate path
- ECB's Nagel: Core inflation is going in the right direction
- US reportedly finalises steep tariffs on China, with many to begin on 27 September
- China approves the plan to raise the retirement age for the first time since 1978
- Boeing US factory workers vote to go on strike, reject pay deal
- France August final CPI +1.8% vs +1.9% y/y prelim
- Eurozone July industrial production -0.3% vs -0.5% m/m expected
Markes:
- JPY leads, AUD lags on the day
- European equities higher; S&P 500 futures up 0.2%
- US 10-year yields down 3.4 bps to 3.645%
- Gold up 0.4% to $2,567.88
- WTI crude up 1.1% to $69.75
- Bitcoin up 0.1% to $58,225
There weren't any major headlines on the session but there were some decent market moves to be had. In particular, bond yields are staying pressured and that is weighing on USD/JPY again.
10-year yields in the US fell as low as 3.62% and that pulled USD/JPY to a low of 140.36 during the session. Yields are now at 3.64% but still down by over 3 bps, helping to see USD/JPY nudge back a little to 140.70 - still down 0.8% on the day though.
All of this comes after the action from yesterday, as traders step up bets for a 50 bps rate cut by the Fed for next week. In part, that can be attributed to Fed watcher Tsimiraos tossing said idea into the mix.
Looking at the dollar, it is holding more mixed on the session as it trades lower against the Swiss franc and euro but higher against the aussie and kiwi.
ECB policymakers did come out in droves to speak their views after the decision yesterday, but all were mainly echoing what Lagarde already mentioned.
In other markets, equities continue to put on a more positive front with US futures also sitting a little higher again on the day. As for gold, the run higher continues with the precious metal keeping with the technical breakout to fresh record highs yesterday. It is now trading up by another 0.4% to $2,567.