Major FX rates showed little net change for the session here to open the new forex week. And what a packed week ahead it is. We have policy meetings, and rate hikes, coming up from the Federal Reserve’s Federal Open Market Committee (FOMC), the Bank of England’s Monetary Policy Committee, the Swiss National Bank, and others. We also have a policy meeting at the Bank of Japan, where no change to monetary policy is expected.

In China, the cities of Chengdu and Dalian lifted their lockdowns today. Staying with China, the People’s Bank of China cut the rate on its 14-day open market operations reverse repos from 2.25% to 2.15%. The 7-day RR rate was left unchanged at 2.0%. Coming up on Tuesday, the 20th, the PBOC will set one- and five-year loan prime rates. Given the MLF rate remained steady last week there is no change expected to the LPRs tomorrow.

The USD/CNY reference rate crept further towards 7 again today.

Again on China, but from a geopolitical perspective, US President Biden in an interview on US TV, 60 minutes, said US forces would defend Taiwan in the event of a Chinese invasion. This contradicts current official US policy on the island. Stay tuned to this for White House withdrawals of the remark/’clarification’ of the remark/all-round muddying of the waters on the remark. Its getting difficult to pass off such comments from Biden as ‘gaffes’, he has said the same before and he is a wily character indeed.

While on the 60 Minutes TV show, it also featured an interview with Iran’s President Ebrahim Raisi. His comments were not indicative of any speedy agreement on the nuclear deal with the US. Oil rose on the session but has since pulled back to be little changed.

Japanese markets were closed for a holiday today. UK markets will also be closed today for the burial of Queen Elizabeth II. Today marks the final day of the official national mourning period. The absence of UK markets will thin out interest and liquidity during the European/UK timezone.

oil wrap chart 19 September 2022