- Fed's Kashkari recap - Federal Reserve may end up needing to raise rates further
- No Federal Reserve speakers on the agenda for Friday 20 May 2022. BoE and ECB though.
- IMF official says yen decline is in line with medium-term fundamentals
- Australian state of NSW has identified a probable case of monkeypox
- Explosion at a South Korean oil refinery shuts it down - one worker killed
- JP Morgan are looking for even further falls for the S&P500
- PBOC sets USD/ CNY reference rate for today at 6.7487 (vs. estimate at 6.7502)
- PBOC rate setting: 1-year LPR 3.7% (prior 3.70%) while 5-year LPR 4.45% (prior 4.60%)
- Japan chief cabinet secretary Matsuno says monetary policy should be decided by the BOJ
- Barclays on the Swiss National Bank CHF FX intervention questions
- Stephen Roach says US stagflation is his base case
- USD/JPY to 150 is "quite possible" says Mr. yen
- Japan inflation data: Core inflation 2.1% (vs. 2.1% expected)
- UK May consumer confidence comes in at -40 (April -38) - falls to its lowest on record
- New Zealand trade balance for April NZD+584 mn (vs. prior NZD -392mn)
- ICYMI - ECB April meeting minutes show a likely (near certain) July interest rate hike
- Japan's finance minister spoke on the falling yen - "sharp forex moves"
- Hopes are up (again) for rates down today from the People's Bank of China
- US: China replenishing strategic reserves with Russian oil would not contravene sanctions
- Forexlive Americas FX news wrap: USD sells off as traders tilt toward slower growth
- Trade ideas thread - Friday, 20 May 2022
- Fed's Kashkari says doesn't know how high rates need to go
The People’s Bank of China set their one- and five-year loan prime rates today. Despite there not having been any change to the Medium-term Lending Facility (MLF) rate this month the Bank cut the 5-year from 4.6% to 4.45%, leaving the 1-year unchanged at 3.7%. The 5-year LPR is the reference rate used for home mortgages in China. Lowering it is a policy move from the PBOC to assist in lowering home-loan borrowing costs and therefore prompt more economic activity. Lockdowns in China have strained economic growth in the country.
Also in central bank new s, President of the Federal Reserve Bank of Minneapolis Neel Kashkari spoke at the end of the US day. He admitted that because household finances are in some cases in better shape than before the pandemic, the Fed may end up needing to raise rates further to bring inflation under control. There is more in the bullets above.
From Japan we had April inflation data, with significant moves higher for CPI, most notably for the core-core measure, which is the closest to US core CPI:
National CPI excluding Food, Energy 0.8% y/y
- expected -0.9%, prior was -0.7%
There is more in the bullets above.
Major FX moves here were not too large but showed some US dollar strength pretty much across the board. USD/JPY is back above 128.00. EUR, AUD, GBP, NZD are all a little lower against the USD while USD/CAD is little net changed at all.