- People's Bank of China is expected to cut loan rates next week
- ECB's Lane will be speaking Friday, 18 August 2023 on Inflation - live link
- TD like NZD/CAD a lot lower, could fall to 0.7670
- PBOC sets USD/ CNY reference rate for today at 7.2006 (vs. estimate at 7.3065)
- UBS expect US dollar upside to be limited from here - their most preferred is the euro
- Citigroup forecasts Brent oil as low as $68, say to short oil after summer is over
- Chatter about that US regulator is set to approve Ether-Futures ETFs
- Japan core-core CPI data comes in above 4% again, hits 4.3% in July
- Barclays slashed their China GDP forecast to 4.5% (prior 4.9%)
- Coinbase says it has system issues but funds are secure. Meanwhile BTC extending lower.
- Brent oil price forecast higher - UBS not expecting the recent slip lower to persist
- Bank of Japan watch - MUFG says USD/JPY in the danger zone for intervention
- ICYMI - further intervention from China to support the yuan overnight
- China's 2nd largest property development group has filed bankruptcy protection in the US
- Note for diary & preview - Powell to speak at 10 am ET on Friday August 25 - Jackson Hole
- Forexlive Americas FX news wrap: Yields rise further but US dollar gives some back
- Trade ideas thread - Friday, 18 August 2023
- Nasdaq leads the way to the downside for the 3rd consecutive day
The dribble lower for US yields was a factor weighing on the US dollar in Asia trade today. Major FX rose against the dollar pretty much across the board. Even the yen added to its Thursday gains, albeit not by too much.
China was one again a focus. The People’s Bank of China set another aggressive reference rate for the onshore yuan. On Thursday the rate was 10 big figures from the modelled estimate, and it was the same again today. This is forthright signalling from the PBOC that they do not want the rapid decline in the yuan to continue. The market response was subdued, the yuan added a few points but as I update its off its session high. USD/CNH (offshore yuan) is circa 7.3 (just under) as I update.
On the data agenda we had July inflation data from Japan. The underlying ‘core-core’ rate (CPI excluding food and energy, and the closest to the US ‘core’ inflation measure) rose higher than June to 4.3%. The yen added a few points, but more as a reflection of lower US yield than any solid expectation the Bank of Japan will pay the inflation data too much attention. The Bank continues to insist that the current high (for Japan) rates of inflation are transitory and that they expect it to fall from around September/October.
Asian equity markets:
Japan’s Nikkei 225 -0.2%
China’s Shanghai Composite +0.1%
Hong Kong’s Hang Seng -0.6%
South Korea’s KOSPI -0.4%
Australia’s S&P/ASX 200 +0.3%
In the crypto space, ETH was extra volatile. The jump came on news on the likely approval of a futures ETF for the coin (see bullets above).
(This chart is from our charting app, which is free and can be found at this link)
