- OPEC secretary-general Haitham Al Ghais says Russian oil production is 'resilient'
- ECB's Wuncsh speaking tonight, add in President Lagarde and also Panetta
- Report that Australian mint sold "doped" bullion to China, then tried to cover it up
- More from Citadel's Griffin - “We have the setup for a recession unfolding,”
- Morgan Stanley eyeing the US nonfarm payroll report coming on Friday - FOMC implications
- PBOC sets USD/ CNY mid-point today at 6.9525 (vs. estimate at 6.9551)
- El-Erian on Powell induced volatility- could risk economic well-being, financial stability
- USD/JPY has hit its highest in nearly 3 months
- US is finalising plans to lift COVID-19 testing travel restrictions from China
- Citadel's Griffin says the mixed messaging from the Federal Reserve is counterproductive
- US yield curve inversion, the recession indicator, is its deepest in 40+ years
- Crypto-focused bank Silvergate in talks with FDIC about how to keep the firm in business
- While the focus was on Powell Tuesday there were also remarks from the ECB and SNB
- RBA Lowe says if the data suggest a pause prior to the next meeting, will do that
- BlackRock says Federal Reserve could hike rates to 6%, hold for an extended time there
- RBA Gov Lowe: Closer to point of pause for rate hikes
- Report: US House Republicans taking steps to prepare for a possible debt ceiling default
- Forexlive Americas FX news wrap 7 Mar: Powell leans toward an acceleration toward 50 bps
- Oil - private survey of inventory shows headline draw vs small build expected
- US equities take a beating as rate hike expectations rise after Powell
- Trade ideas thread - Wednesday, 8 March 2023
Forex markets saw a small degree of follow through for the US dollar upmove during the session here today. Ranges were small compared to the huge swing higher for the dollar on Tuesday in US time as Powell shifted a little more hawkish. Regional stocks declined, as you’d expect.
Contrasting with Powell’s move Reserve Bank of Australia Governor Lowe spoke today following his shift to a touch less hawkish at yesterday’s monetary policy decision. If you recall it was an as expected +25bp rate hike with a softer tone in the Statement. Lowe elaborated on this less hawkish tone in today’s comments. In summary (this from earlier):
- Lowe has pointed out that the data on jobs, retail spending, business surveys, along with PCI, are all important considerations. If those data suggest a pause is needed then the Board will pause its rate hikes. If not, then it'll be another hike. Lowe said more aggressive rate hikes were considered and that this would bring CPI back closer to target prior to 2025 the bank currently forecasts, but this would come at a big cost in unemployment.
- Also, total required mortgage payments are expected to reach around 9.5% of household disposable income as fixed rate loans roll off and refinanced. This would be close to a record high and would trim demand in the economy.
On the data front we had Japan recording a record current account deficit, and trade deficit, in January. The global slowdown and China's Lunar New Year holidays were cited in reasons. As a consolation prize, the primary income balance, another element of the current account, rose 350 bn yen from a year earlier to a 2.29 trillion yen surplus in January, driven by higher interest payments received from its investment in foreign securities.
News flow otherwise was very light indeed.
Asian equity markets:
China’s Shanghai Composite -0.5%
Hong Kong’s Hang Seng -2.5%
South Korea’s KOSPI -1.4%
Australia’s S&P/ASX 200 -2%