- Goldman Sachs is warning that multiple US government shut downs are possible
- If you are eyeing the European Central Bank meeting today, it's a non-policy meeting
- China state banks intervening to sell USD/CNY
- China August Industrial Profits -11.7% YTD y/y (prior -15.5%)
- Australian August monthly inflation data 5.2% y/y (vs. 5.2% expected)
- People's Bank of China says it'll accelerate macro policy adjustments
- PBOC sets USD/ CNY central rate at 7.1717 (vs. estimate at 7.3103)
- EUR/USD has hit a 6-month low under 1.0560
- BOJ minutes - discussed if wage hikes would continue while profits weak for many firms
- Japanese Finance Minister Suzuki says again he is watching FX with a sense of urgency
- If it wasn't for the fear of intervention, Fed's Kashkari would've sent USD/JPY above 150
- A PSA: Members of the US Congress still get paid, quite a lot, during government shutdowns
- US bank economists expect credit conditions to weaken over the next six months
- JP Morgan says rising oil prices could lead to demand destruction - headwind for stocks
- ANZ expect a more hawkish tone from the Reserve Bank of New Zealand next week
- There is rising speculation that Japanese Prime Minister Kishida may call a snap election
- Goldman Sachs have lowered their forecasts for GBP/USD, have a "tactically bearish view"
- ING says oil prices above $100 / barrel not sustainable. Hit to demand, political pressure
- JP Morgan CEO Dimon is floating the risk of 7% rates: "worst case is 7% with stagflation"
- Forexlive Americas FX news wrap: Bonds slump spills over into stocks, dollar firms
- Oil - private survey of inventory shows a build vs. the small draw that was expected
- US stocks close sharply lower
- Trade ideas thread - Wednesday, 27 September 2023
The People’s Bank of China is continuing to hold the CNY (and therefore the CNH also) from falling in value further. The Bank set the USD/CNY reference rate on the 7.17 big figure again today. The modelled estimate for the mid-rate was above 7.31 but yet again the PBoC set it much, much lower.
In addition to this Chinese state banks were in the spot market selling USD/CNY. This is an intervention effort at the behest of the PBoC. It had two impacts:
1. it drove USD/yuan lower for a time
2. it gave USD/yuan bulls an opportunity to scoop some up at a better rate
As I post USD/CNY is back to little changed for the session.
China published August Industrial Profits today. The headline figure for this is the YTD y/y, which came in at a slower drop around -11.7% compared to around -15.5% in July (see bullets above for more on this). However, the change for August alone (not YTD, just the change during August from July) was a much more encouraging +17.7% y/y.
From Australia today we had monthly CPI for August. It came in at 5.2%, well above the 4.9% y/y in July. The trimmed mean measure remained stuck at 5.6% y/y. A bright point was another measure of underlying inflation, ie. the August CPI excluding Fruit and vegetables, Automotive fuel, and Holiday travel and accommodation came in at 5.5% y/y, down from 5.8% in July.
The Australian dollar had popped a little going into the Australian CPI and China IP figures (both were release simultaneously) but soon dripped back towards little net changed on the day. NZD/USD traded a similar pattern but its net lost some ground on the session. The range is small though.
Small ranges across most other major FX prevailed also with only minor, if any, net change.
Asian equity markets:
Japan’s Nikkei 225 -0.5%
China’s Shanghai Composite +0.3%
Hong Kong’s Hang Seng +0.6%
South Korea’s KOSPI -0.3%
Australia’s S&P/ASX 200 -0.2%
USD/CNH:
