- Chinese state media talking up the yuan: recovering economy will return confidence & calm
- ICYMI - Nvidia CEO Jensen Huang sells $42 mn in shares (but its OK)
- Head of the San Francisco Fed Mary Daly to speak on Friday
- Poll shows analysts split on an ECB rate hike next week
- The People's Bank of China is battling to hold the line on the yuan today
- PBOC sets USD/ CNY reference rate for today at 7.2150 (vs. estimate at 7.3284)
- Morning trade in Hong Kong has been cancelled due to severe weather - Black Rainstorm
- Japanese Fin Min Suzuki says rapid FX moves are undesirable, won't rule out any options
- Heads up for Chinese inflation data due over the weekend - August CPI and PPI
- Japan Q2 GDP revised down to 4.8% from 6%
- Japan July real wages fall 2.5% y/y, and household spending falls 5% y/y
- Fed's Logan says it could be appropriate to skip an FOMC rate hike at September meeting
- On Wednesday next week we get the US inflation data for August - preview
- BNP has flipped its S&P 500 forecast to end 2023 at 4150, from 3400 previously
- UBS says the global economic story is very clear - disinflation pressures being kept alive
- Australian LNG facility plant strikes will begin today, Friday afternoon local time
- HSBC like even more upside for the USD into 2024 - 4 reasons for a higher dollar
- Fed's Goolsbee says inflation is above where we want it, monetary policy is working
- The outlook for the U.S. economy remains uncertain
- China bought a huge swag of gold in August, 10th consecutive mth it added to gold reserves
- Forexlive Americas FX news wrap: Initial jobless claims show employment market still solid
- JP Morgan forecasts USD/JPY to as high as 155 before meaningful BOJ FX intervention
- Investor Alert: Upcoming Earnings Reports and How They Impact Market Sentiment
- Trade ideas thread - Friday, 8 September 2023
- US equity close: Nasdaq down for the fourth day
The People’s Bank of China once again set the USD/CNY reference rate more than 1100 points lower than the modelled estimate. The difference today was that the Bank set the rate above 7.20 as it conceded, just a little, to market pressure on the yuan. The low setting for the onshore yuan prompted a sharp selloff for it and the offshore (CNH) in the market. As I post there have been no sightings of spot FX intervention to support the yuan.
CNY traded to its lowest since December of 2007.
USD/JPY was also a mover on the session. It dropped to lows around 146.60. You’ll note in the bullets above some verbal intervention from Japan’s finance minister Suzuki. These came after the drop, they didn’t trigger it. As it happens USD/JPY recovered its lost ground after Suzuki had made his statement and is back above 147.20 as I update. Feel free to speculate on Japan Inc. front running official remarks ...
Also from Japan today were data including the revised Q2 GDP numbers. The 6% preliminary Q2 GDP (quarterly annualized) was revised down to a still very strong 4.8% y/y. The q/q was revised down from 1.5% to 1.2%. Markdowns came from:
- private consumption at -0.6%
- business spending -1.0%
The external sector remained unchanged with net exports at +1.8%. This is a great result, the buts being:
- headwinds from China may slow exports ahead
- strong exports are masking weak domestic demand
Also from Japan were very poor real wage data (see bullets above).
EUR/USD moved higher during the session. Also a little stronger against the dollar were GBP, AUD (held back by imminent LNG strike action), NZD and CAD. A dribble lower for US yields seems to be the smoking gun for these small moves.
ps. coming up over the weekend:
Asian equity markets:
Japan’s Nikkei 225 -0.94%
China’s Shanghai Composite -0.44%
Hong Kong’s Hang Seng 0% (Hong Kong morning trade was closed because of the Black Rainstorm)
South Korea’s KOSPI -0.56%
Australia’s S&P/ASX 200 -0.34%
USD/CNH hourly:
