- ANZ say the high Nov month CPI result lessen the likelihood of a pause from the RBA in Feb
- BoA say US federal government will forced to default on a portion of its daily obligations
- Japan chief cabinet secretary Matsuno says he welcomes firms raising wages
- Foxconn's plant in Zhengzhou is back to operating at full capacity
- Moscow says US training Ukrainian troops on Patriot systems confirms participation in war
- China's Global Times: "Chinese companies resume Australian coal imports"
- PBOC sets USD/ CNY mid-point today at 6.7756 (vs. estimate at 6.7776)
- Uniqlo operator to boost annual pay in Japan by up to 40%
- Australia November 2022 retail sales data: +1.4% m/m (prior +0.4%)
- Australian data - Job vacancies for November 2022 -4.9% q/q (prior -2.1%)
- Australia Monthly Consumer Price Index indicator, November 2022: 7.3% y/y (prior 6.9%)
- Oil - private survey data showed a huge build, now awaiting official US government data
- New Zealand commodity price index for December -0.1% m/m (prior -3.9%)
- China state financial media says there is room for lower interest rates, lower RRR
- Japan senior MoF official says interest rates will not remain low indefinitely
- 5 reasons to be bullish EUR/USD
- Forexlive Americas FX news wrap: The forex market has a quiet day as traders await CPI
- Despite a 20 big figure fall yen remains undervalued (MUFG sees USD/JPY towards 120)
- Trade ideas thread - Wednesday, 11 January 2023
- Oil - private survey of inventory shows a very large headline build (vs. draw expected)
It was a subdued range day here in major FX. USD/JPY has ticked up a little, to above 132.50. The only news of note from Japan during the session was a retailer (admittedly a big one!) saying it was raising wages. The news was greeted with approval from Japan’s chief cabinet secretary Matsuno.
From Australia today we had job vacancies data, retail sales data, and monthly CPI data. While retail sales came in solid, and job vacancy numbers remained historically elevated, the most focus was on the jump in headline and core CPI. The data was for November 2022. The monthly CPI releases from Australia are incomplete, the monthly numbers include updated prices for only between 62 and 73 per cent of the weight of the quarterly CPI basket; thus its the quarterly CPI that is the most focus. Nevertheless, rising headline and core CPI is not something the RBA will just shrug off. Reserve Bank of Australia Governor Lowe has made specific mention of monthly CPI rates in his statements previously. The next RBA policy meeting is February 7, a +25bp rate hike is the consensus analyst expectation at this stage. Keep in mind that the December monthly and Q4 quarterly CPI will be published prior to the February meeting, on January 25 and may prompt changes to expectations and market pricing.
AUD/USD popped a few points on the data but soon retraced to be, as I update, barely changed on the session.
Speaking of the South Pacific down here. We had data from ANZ NZ on New Zealand commodity export prices. Unless you are into Kiwi $ fundamentals you may not pay much attention to this report. The ‘but’ is, though, that as part of this report ANZ take a look at global shipping prices, which is, of course, much more widely applicable than just to the NZD. Today they noted:
- Global shipping prices have fallen sharply and are nearing pre-pandemic levels.
- Demand for container shipping has also fallen as consumer demand for manufactured goods eases.
- Ship operating costs have reduced due to lower fuel prices, as well as fewer delays at ports as congestion dissipates.
- Shipping demand is expected to remain weak until after the Chinese New Year holiday period, with the volume of goods traded globally throughout 2023 forecast to remain subdued
ANZ have been on top of falling shipping prices for well over a year now. Separately, note that an online freight marketplace is showing that the cost of shipping a 40-foot container from China to America’s west coast is now US$1,400, down 93% from its peak of $20,600 in September 2021.
Oil lost some ground. The private survey of inventory (See bullets above) reported a huge weekly build, contributing to the softer price.
Asian equity markets:
Japan’s Nikkei 225 +1%
China’s Shanghai Composite +0.2%
Hong Kong’s Hang Seng +1%
South Korea’s KOSPI +0.1%
Australia’s S&P/ASX 200 +0.9%
USD/CNH relatively subdued also:
