Articles
USD/JPY back in line after yesterday’s jump higher
302084 March 30, 2023 12:09 Forexlive Latest News Market News
Despite bond yields advancing on Tuesday, the pair fell before rebounding in trading yesterday as yields continue to hold higher on the week so far. I outlined that here yesterday, noting that price action is adjusting accordingly to sentiment in the bond market.
After the notable moves in the past two days, USD/JPY is pretty much back in line now and trading back in and around its typical correlation to 10-year Treasury yields.
As such, don’t expect too much outsized moves later in the session ahead unless either the bond market starts to run and/or the US dollar itself finds a reason to stretch out against the rest of the major currencies bloc.
Looking ahead, inflation data in Germany and Spain today will be ones to watch as potential catalysts for rates action. But keep an eye out on flow-based movements as well, with month-end and quarter-end trading in consideration too.
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ForexLive Asia-Pacific FX news wrap: Major FX trades subdued ranges in Asia
302077 March 30, 2023 11:02 Forexlive Latest News Market News
It
was a quiet day for news of any impact and data flow was light also.
From
Australia we had job vacancy data. These recorded their third q/q
fall but remain historically super-high. Also today relevant to
Australian labour markets was the country’s peak trade union body
submitted a proposal for a 7% minimum wage rise. Australia’s
government supports the idea of a minimum wage hike but didn’t
comment on the specific 7% number. A decision on the minimum wage
level is expected in June. There will be a rise, circa 5% seems to be
the expected.
The
RBA will be eyeing the potential for wages boosting inflation.
Speaking of the Reserve Bank of Australia, their meeting is next
week, April 4. Three of Australia’s four big banks are now
expecting a pause with ANZ the hold out at forecasting a +25bp rate
hike.
For
the Australian dollar, it has dribbled lower on the session but got a
minor pop from its low coinciding with reassuring comments from
China’s new Premier Li Qiang at the Boao Forum in Hainan.
Asian
equity markets:
-
Japan’s
Nikkei 225 -0.7% -
China’s
Shanghai Composite -0.4% -
Hong
Kong’s Hang Seng -0.4% -
South
Korea’s KOSPI +0.46% -
Australia’s
S&P/ASX 200 +1.05%
China Premier Li Qiang says wants to keep global supply chains stable, smooth
302074 March 30, 2023 10:40 Forexlive Latest News Market News
China’s Premier Li Qiang is speaking at the Boao Forum, plenty of reassuring comments.
-
To achieve greater success, chaos and conflicts must not happen in
Asia - Otherwise the future
of asia will be lost - We need to implement
the gsi, uphold the vision of comprehensive security and oppose
unilateral sanctions - Oppose taking sides,
forming blocs and new cold war - Further liberalise
global trade and investment - Keep global supply
chains stable and smooth - Inject strong
dynamism into the global economy - Oppose trade
protectionism and decoupling - The issues facing
humanity need to be addressed through consultation with all - We need to send a
positive signal of upholding multilateralism to make global
governance system more just and equitable - In this uncertain
world, the certainty that china offers is an anchor for global peace
and development - No matter how the world’s situation evolves, we will remain committed to reforms and opening up
- The economic situation in March is even better than in January and February
eur
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ICYMI – China’s new premier says policies will boost consumption and investment,
302039 March 30, 2023 08:05 Forexlive Latest News Market News
China will strengthen macro policy adjustments and unleash the potential of consumption and investment, Chinese state radio cited China’s Premier Li Qiang was cited on state media as saying
- will strengthen macro policy adjustments
- will unleash the potential of consumption and investment
Li Qiang’s comments were made at the Boao Forum For Asia in China’s southern province of Hainan on Wednesday.
—
USD/CNH update, the rise driven by month and quarter end flows, and the souring of ‘risk’ attractiveness. these factors are expected to diminish and thus the rally:
UBS like China stocks higher – favour consumer related shares
302025 March 30, 2023 07:40 Forexlive Latest News Market News
Via a note issued by analysts in UBS’ Shanghai office, a snippet:
- “In the near term, the market correction offers a good buying opportunity
- Together with a valuation re-rating, we think this would drive considerable market upside
- We tactically favour sectors that benefit from increased macro and industry policy support, and sectors with marginal fundamental improvements but historically low valuations”
ie UBS like consumer stocks
- leisure, appliances and food and beverage firms
- recovery in the services sector and activity by small and medium-sized companies will underpin household incomes, and the release of excess savings will support consumption
UK car production +13.1% in February – supply chain pressure eased
302020 March 30, 2023 07:09 Forexlive Latest News Market News
Society of Motor Manufacturers and Traders (SMMT) data conveyed via Reuters:
- February car output +13.1%
- first monthly increase in three
- boosted by easing of supply-chain snags and robust output in both domestic
and overseas markets - about 81% of the total produced cars were
exported, mainly to the European Union
Barclays warn of a 2nd wave of deposit outflows from US banks – the ‘sleepy’ depositors
302014 March 30, 2023 06:56 Forexlive Latest News Market News
Barclays says that the ‘first wave’ of the run was related to solvency fears. That wave may be almost over. But ….
- “We think the first wave of outflows may be nearly over. .. But the recent tumult regarding deposit safety may have awakened ‘sleepy’ depositors and started what we believe will be a second wave of deposit departures, with balances moving into money market funds.”
Barclays graph on the upswing of funds into money funds:
—-
You’d have to think that what Barclays is calling a ‘second wave’ will not be an urgent bank run, its not based on solvency fears.
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Goldman Sachs raise its near term forecasts for EUR/USD, 12 month unchanged at 1.10
301987 March 30, 2023 05:40 Forexlive Latest News Market News
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- Goldman Sachs discusses its new forecasts for EUR/USD.
“We are revising up our 3- and 6-month EUR/USD forecasts to 1.05 (from 1.02 previously) to account for the recent deterioration in the US growth outlook and less favorable tightening mix for the Dollar,” GS notes.
“And, we are maintaining our 12-month EUR/USD forecast at 1.10; we expect that still-limited economic slack and rising recession risks cut against more meaningful Dollar downside,” GS adds.
Forexlive Americas FX news wrap: Yen sinks as bank worries fade
301985 March 30, 2023 04:45 Forexlive Latest News Market News
Markets:
- Gold down $10 to $1963
- US 10-year yields down 1 bps to 3.56%
- CAD leads, JPY lags
- S&P 500 up 1.4%
- WTI crude oil down 32-cents to $72.88
In the simplest terms, it was a strong day for risk trades today and that meant yen selling, and ultimately heavy yen selling. US regional banks were generally treading water but it was another day without any of them failing and you have to assume that deposit outflows are slowing.
USD/JPY ends the day up 200 pips to 132.87 as it rapidly chews into the March swoon. It didn’t get much help from the Treasury complex where 2-year yields rose only 3 bps. It was the same across the board as the yen sank.
Otherwise, it wasn’t the straight-forward kind of ‘risk on’ trade you might expect. For one, the antipodeans struggled. AUD and NZD tried the upside early in US trading but both faded. On the other hand, the loonie was able to sustain a bid despite a reversal lower in crude prices.
Cable has generally tracked risk assets but didn’t today as it rose to 1.2360 early in Europe and then gave it all back to finish 20 pips lower. The euro also made a move higher only to fall back and finish flat on the day.
In terms of news, there was nothing meaningful to chew on but pending home sales were another housing data point that beat on the upside. The US auction probably helped USD/JPY as well but it was largely a news-free day of trading with quarter-end flows a much bigger part of the equation.
Fitch Ratings says Sovereign defaults are at a record high
301984 March 30, 2023 04:40 Forexlive Latest News Market News
Via a report from Fitch, in brief:
A record five Fitch-rated sovereigns are in default:
- Belarus, Lebanon, Ghana, Sri Lanka and Zambia.
There have been 14 separate default events since 2020, across nine different sovereigns
- Argentina, Ecuador, Suriname and Ukraine as well as those currently in default
compared with 19 defaults across 13 different countries between 2000 and 2019.
Fitch adds this:
- Further Defaults Likely
Fitch cites sovereign borrowing costs ramping higher.
- Median general government debt-to-GDP ratio climbing to 48% pre-Covid from 31% in 2008, helped by easier access to the eurobond market and financing from China.
- “Against this backdrop, frontier markets with limited buffers were poorly placed to cope with the severe shocks from the pandemic and the impact of Russia’s invasion of Ukraine on food and energy prices, global inflation and the subsequent abrupt tightening in monetary policy”