- Taiwan Stock Stabilisation Fund says it will activate to intervene in the market if needed
- Several Chinese warplanes fly close to median line of Taiwan Strait Tuesday morning
- Taiwan will strengthen its combat readiness through to Thursday 4 August
- China's Communist Party leaders say the GDP goal is guidance, not a target
- Federal Reserve speakers coming up on Tuesday 02 August 2022 - Evans and Bullard
- Japan fin min Suzuki says recent yen moves have been rapid
- Australian home loans data for June, lower on the month
- Australian data - June Building Permits -0.7% m/m (vs. expected-5.0%)
- PBOC sets USD/ CNY central rate at 6.7462 (vs. estimate at 6.7478)
- Chinese state media says China will conduct military drills in the South China Sea
- USD/JPY is plunging - again! Under 131.00.
- Speculation that China has sent 2 of its 3 aircraft carriers to the Taiwan Strait
- The key takeaway from China's July data - firms reluctant to invest, borrow or hire
- RBA meet today with its cash rate currently at an "excessively stimulative" level
- US President Biden speaking - confirms strike over the weekend killed top Al Qaeda leader
- RBA meeting today - surprise incoming? TD: "a 65bps hike cannot be ruled out"
- South Korean July CPI hits its highest y/y since November 1998
- Unnamed sources says Saudis will push OPEC+ to increase oil production on Wednesday
- Central bank intervention continues in Asia
- Japan's hike to the minimum wage now appears to have risen to 31 yen
- RBA due today, then on Friday the Bank issues updated forecasts in its quarterly statement
- Goldman Sachs EUR/USD forecast is wishy-washy. Gyrations around parity.
- US President Biden will address the nation at 7:30 pm ET (2330 GMT)
- IYCMI - Pelosi will visit Taiwan (market casts nervous eyes at AUD)
- Trade ideas thread - Tuesday, 2 August 2022
- China's Communist Party UN envoy: Pelosi visit to Taiwan would undermine relations with US
- ICYMI - Moody's says it expects the FOMC to persist with front-loaded rate hikes ahead
- US stocks snapped it's a 3 day win streak
- Forexlive Americas FX news wrap: ISM prices paid made a big improvement
The post-FOMC unwind of long USD/JPY carried on further again in Asian morning trade on Tuesday. USD/JPY dropped hard and fast, to lows (briefly) under 130.50. Japanese finance minister Suzuki made comments decrying the ‘rapid yen moves’. He, and other Japanese officials, had been very vocal indeed about not wanting such rapid yen FX moves when the currency was weakening but its taken 700-odd points of fast USD/JPY decline for Suzuki to make a similar remark as yen has gained back some strength. USD/JPY is probably around an acceptable level for Suzuki and the government at current levels, hence his commens today trying to stem the drop. I don’t think what the Japanese government wants from the exchange rate is of much importance right now though. They certainly showed their worthlessness on the way up for USD/JPY.
The focus of the session was on geopolitics, specifically the likely visit to Taiwan by US House Speaker Nancy Pelosi. Media reports are saying Pelosi is expected to arrive in the country on Tuesday evening. China has objected, in strenuous terms, to the visit. The Taiwanese military have said they have increased their combat readiness but have not raised their alert level. So far China has flown its warplanes close to Taiwanese airspace and sent its warships close also.
Regional stocks are shaky, lower on the session. The Hang Seng, Nikkei, Shanghai Comp, China A50, Australia, KOSPI, all lower.
On the central bank front we had intervention again from the Hong Kong Monetary Authority to prop up the HKD (its fallen to the weak end of its trading band). Still to come is the Reserve Bank of Australia decision, due at 0430 GMT. A 50bp rate hike is widely expected, there are previews in the points above.