- Federal Reserve FOMC monetary policy statement due Wednesday - quick preview
- More on Bank of Japan Governor Kuroda seeing a chance consumer inflation will approach 2%
- Moody's says Chinese company bond defaults will continue
- China Statistics says economy has continued to improve
- US House has passed a bill to ban goods made with forced labor in China’s Xinjiang region.
- China activity data for November - industrial output beats
- Japan PM Kishida says he is not considering cutting the sales tax
- The Bank of Japan has injected cash into markets for the 3rd day in a row
- China November new home prices -0.3% m/m (prior -0.2%)
- PBOC injects 500bn yuan through 1 year MLF
- PBOC sets USD/ CNY mid-point today at 6.3716 (vs. estimate at 6.3684)
- The PBOC may lower its Loan Prime Rate ahead of the holiday season
- Bank of Japan Governor Kuroda says there's a chance CPI may apporach 2%
- A timely reminder / warning from Bank of America on thin end of year FX markets
- Australia – Westpac Consumer Confidence Index for December -1.0% m/m (prior +0.6%)
- Swiss National Bank should launch a $1tln sovereign wealth fund
- An oil ICYMI - IEA cites market surplus, Omicron demand hit as it lower price forecasts
- FOMC preview: Taper timeline likely to be cut in half
- US Senate votes to increase the federal debt limit
- New Zealand YTD current account balance is -4.6% of GDP (expected -4.5%)
- Private oil survey data shows smaller than expected draw in crude oil inventory
- Trade ideas thread - Wednesday 15 December 2021
- Canada cuts its forecast for 2021/22 deficit citing stronger economic performance
It was a subdued range session today across major FX while we await the decisions out of the US Federal Reserve’s Federal Open Market Committee.
Despite the lack of much net movement there was plenty on the news front.
From New Zealand the economic and fiscal update brought news of an expected return to government budget surplus three years quicker (in 2022/23) than was forecast in the May 2021 budget.
In the US we had the Senate pass the a US$2.5tln debt ceiling increase to make way for US President Biden’s agenda. The bill will head to the lower house where its expected to pass easily.
- Also in the US Congress, the House passed a bill which bans imports made with forced labour in China’s Xinjiang region.
- The White House also issued a statement saying China must be held accountable for genocide and is considering imposing harsher sanctions on China's largest chipmaker SMIC.
US-China tensions will persist for a good while to come ...
Speaking of China there was a barrage of news and developments:
- the previously announced PBOC reserve requirement ratio cut (of 50bps) took effect today
- the PBOC injected 500bn yuan via a one-year medium-term lending facility (MLF), note though this does not fully offset the 950bn yuan that matured today
- Chinese financial media reported the PBOC may cut its Loan Prime Rates (these will be set on the 20th of the month). Speculation of cuts to LPRs never seem to go away, an unchanged rate on today’s MLF seems to indicate a cut next week is not likely.
- Activity data from China for November was mixed (even poor depending on your point of view), the economy is being held back by a worsening property slump and restrictions and disruptions from COVID-19 outbreaks
The Bank of Japan added cash to the banking system for a third consecutive day in an attempt to drive interest rates lower after they crept up due to demand for funds heading towards year-end.
Stay tuned for the FOMC statement at 1900 GMT and Powell's presser to follow at 1930 GMT: