- Australian Treasurer Chalmers says inflation expected to peak in Q4 2022 at 7.75%
- RBNZ says Funding for Lending Programme (FLP) working as planned, will stay 'til December
- US Treasury Secretary Yellen on the speaking circuit on Thursday, 28 July 2022 - 2 events
- USD/JPY update - continued its post FOMC drop to nearly 135.00
- BOJ Deputy Governor Amamiya: BOJ must support economy with monetary easing
- Australia Q2 export prices +10.1% q/q (expected +19.7%) & import prices +4.3% (exp 1.9%)
- Australia retail sales for June +0.2% m/m (expected +0.5%)
- PBOC sets USD/ CNY mid-point today at 6.7411 (vs. estimate at 6.7425)
- NZ July business confidence -56.7 (prior -62.6)
- "Traders are talking about chance of between-meetings rate hike by Fed in August"
- 40 vessel backup of container ships off one of the U.S. East Coast’s busiest ports
- Fed cracked open the door to fewer rate hikes this year - there is a massive risk-on bid
- UK car production rose 5.6% y/y in June - supply chain snags began to ease
- Hong Kong's central bank raises its base rate by 75bps (follows Fed higher)
- TD forecast 100 bp of rate hikes from the Bank of Canada ahead
- IMF chief economist supports a weaker yen
- ICYMI: Australia has cut its economic forecasts, citing high inflation, slow global growth
- US politics/economy - Inflation Reduction Act to be submitted, deficit reduction, energy
- Australian retail sales and terms of trade data is due today, Thursday, 28 July 2022
- South Korea's manufacturing outlook has fallen to its lowest in over 18 months
- White House says we are not currently in a recession, or pre-recession
- Trade ideas thread - Thursday, 28 July 2022
- ServiceNow beats on EPS but Revenues fall short
- Forexlive Americas FX news wrap: Powell hints at slower pace of rate hikes
Sessions following Federal Open Market Committee (FOMC) statements see the Asia timezone digesting both the Fed’s decision and the comments from the following press conference by the Chair, Powell. That played out in Asia as usual today, but what was not usual was the continued drop in USD/JPY (which impacted yen crosses alongside, of course).
USD/JPY fell after the FOMC and went into early Asia trade circa 136.50 before dropping down to trade just above 136.00 before stabilising somewhat. Then another large down-draft of selling hit it, taking the pair to lows just over 135.00. There was no fresh news of note. A speech from Bank of Japan Deputy Governor Amamiya reiterated the Bank's commitment to staying the course on its loose monetary policy.
There was little news otherwise. US politics saw an agreement between Senators Schumer and Manchin to advance Biden’s plans, the main points being touted:
- increase corporate taxes,
- reduce the national debt,
- invest in energy technologies
- and lower the cost of prescription drugs
We’ll see, but for now it appears on track. Manchin has been a roadblock since Biden took office, getting him on board is a new step.
As for data, we had Australian retail sales, these increased at the slowest pace this year. Consumer sentiment has been weak while sales have been strong, a dichotomy that could not be sustained and it appears to be cracking now.
Separately, Australia’s Treasurer Chalmers issued his inflation forecast, says it’ll peak at 7.75% in Q4. This is above his department’s previous forecast (shared by the RBA) of 7%. The Reserve Bank of Australia meets next on August 4, a 50bp rate hike is as good as baked in.