- European Central Bank meeting today, Wednesday 18 May 2022 (not on monetary policy)
- More from Goldman Sachs on US recession talk
- China April house prices -0.2% m/m and +0.7% y/y. Both down from March.
- AUD drops a few ticks after the lower than expected Australian wages data
- Australian wages index for Q1 2022: 0.7% q/q (vs. expected 0.8%)
- PBOC sets USD/ CNY mid-point today at 6.7421 (vs. estimate at 6.7456)
- More Fed's Evans: Expects transition to talking about 25bp hikes by July or September
- Here's why the Reserve Bank of Australia will hike the cash rate by 40bps to 0.75%
- Japan economy minister Yamagiwa: Economy to pick up but uncertainty due to Ukraine
- Australian data - Westpac leading index for April -0.15% m/m (prior +0.3%)
- China has halted daily updates of bond trading data for foreign institutions
- Japan GDP preliminary for Q1 2022: -0.2% q/q (vs. expected -0.4%)
- More from Fed's Evans - short-term neutral rate may be higher than long-run rate
- Reuters Tankan shows Japan Manufacturers Index halving in May, lowest since Feb. 2021
- European Commission to outline 210bn EUR plan to end its reliance on Russian fossil fuels
- Fed's Evans calls to raise interest rates to 2.25% - 2.5% quickly
- Morgan Stanley bullish bias on the USD into the northern Summer
- ICYMI - Powell: “We need to see inflation coming down ... Until we do, we’ll keep going.”
- Magnitude 5.1 earthquake, north east Japan coast
- UK Chancellor Sunak considering bringing forward the 1p income tax cut (yes 1, just 1, p)
- Trade ideas thread - Wednesday 18 May 2022
- NZDUSD is up for the 3rd consecutive day despite the poor dairy auction on Tuesday
- Private oil survey data shows surprise headline draw in crude oil inventory
- Tech stocks rebound and so do banking shares in a broad rally
- NZDUSD holds onto most of gains today and stays above the 200 hour MA
The Australian dollar was a mover during the session here today. AUD/USD tested higher in the Sydney morning, ahead of wages data due at 11.30am Sydney time. The Wage Price Index data for Q1 of this year came in below central expectations on both q/q and y/y (see bullets above). AUD/USD dropped in response, albeit not within a very large range. Expectations of a 40bp rate hike from the Reserve Bank of Australia at the June (7 th ) meeting were trimmed in response to the data.
USD/JPY has also been a mover, down from highs just over 129.50 to be lows circa 129.10. Lower AUD/USD and lower USD/JPY of course translates into a heavy AUD/JPY. Other yen crosses dropped also.
EUR, GBP, NZD, CAD had all gained a little against the USD early in the session and all have given back this, to a greater or lesser extent. USD/CAD is up 30+ points from its early lows under 1.2800.
WTI popped above $114 but is back under as I update
Apart from the Australian data we had the preliminary reading for Japanese economic growth in the first quarter (January-March) of 2022. GDP contracted (see bullets above). We also had data on Chinese house prices in April. These fell m/m for the first time since December 2021 and recorded their slowest y/y gain since October 2015.
On the central bank front had extended remarks from Charles Evans, President of the Chicago Federal Reserve branch. Evans did not depart from the current Fed chorus warning of rapid rises for Fed Funds in the near term, and that the Fed would do more if needed. He did express his expectation, though, that he sees a return to 25bp hikes from July or September.
The People’s Bank of China raised the CNY at the daily USD/CNY reference rate setting. CNY was moved higher by 440+ pips to 6.7421 against the USD. This is the third consecutive day for a higher CNY against the USD at the central rate setting.
AUD drop on the wages data - arrow
