News flow was light today. Eyes are on Shanghai. Today we had reports that the easing of restrictions for the city flagged to begin next week (Monday) are likely to go ahead as China's largest city recorded the third consecutive day of no Covid infections outside of quarantine.

On the central bank front we had comments from Bank of Japan Deputy Governor Amamiya. He didn’t surprise us, restating (yet again) that the BOJ will be maintaining its easy monetary policy.

While speaking about central banks we had the minutes of the Reserve Bank of Australia May 2022 meeting published today. The May meeting was the occasion of the first RBA cash rate hike in over 11 years. There was nothing at all in the minutes to suggest the path ahead is not for more rate hikes. The June meeting (the 7th) is expected to give us the next rate hike, likely of 40bps to take the cash rate target to 0.75%.

Major FX rates moved in minor ranges only, characterised by a touch of weakness for the US dollar almost across the board. USD/JPY did rise a little.

Regional equities mainly traded a little higher. China flagged a little more support for the tech sector, launching a conference to promote the development of the digital economy. Japan’s government is expected to pass an extra budget before June, more fiscal support for the country's economy.

As I said earlier, minor FX moves only. EUR/USD ticked a little higher and has now retraced much of it .... making a liar out of me it is!

eur usd wrap 17 May 2022