- Yen weakens on BoJ hike as two dissents temper hawkish read Alt headlines:
- Bank of Japan (BOJ) raises policy rate by 25bp, as expected
- Re Airbus, Pratt & Whitney: French airline has grounded a newly upgraded aircraft
- Goldman keeps $5,400 gold forecast intact despite Fed hike
- UBS sees two more RBA hikes to 4.85% terminal rate after Bullock’s comments
- Bullock: RBA weighing whether policy is tight enough as oil pressures build
- US sanctions Iranian crypto exchange BitBank over IRGC Hormuz bitcoin transfers
- PBOC sets USD/ CNY reference rate for today at 6.7521 (vs. estimate at 6.7065)
- Seven ways to value Bitcoin, from network adoption to stock-to-flow
- Yen slips, Aussie firms as BoJ data softens and Bullock flags RBA hike
- Bullock says upside inflation risks are materialising as Middle East bites
- Japan August inflation: Headline CPI 1.9% y/y (expected 2%)
- JPMorgan says Bitcoin could get more support than gold as ETF hedges unwind
- New Zealand data, food price inflation in August same as in July
- Fed’s unanimous hike stirs debate over how long high inflation persists
- ICYMI: Trump tells Axios he’s nearing a big decision on resuming Iran war
- ICYMI: JP Morgan sees oil market lacking a clear endgame six months into Iran war
- Another tanker struck in Strait of Hormuz as Iran missile threat widens war
- investingLive Americas FX news wrap 17 Sept
Summary:
- Iran struck an oil tanker under US Navy escort in the Strait of Hormuz’s southern Omani corridor, near Khasab, Oman, following a series of anti-ship ballistic missile launches from southern Iran; UKMTO confirmed the attack and said the crew is safe
- The US Treasury’s OFAC sanctioned Iranian crypto exchange BitBank, alleging it moved hundreds of millions of dollars in bitcoin to the IRGC as part of a wider crackdown on financier Babak Zanjani’s sanctions evasion network
- Oil prices eased slightly on the session; gold rallied above $4,360 before easing back
- Japan’s August national CPI undershot forecasts across the board, with headline at 1.9%, core at 1.7% and core-core at 1.7%, prompting a modest weakening in the yen ahead of the Bank of Japan’s decision
- The BoJ raised its policy rate to 1.25%, a 31-year high, from 1%, a move that met market expectations; two dissents on the vote point to a somewhat less hawkish outcome than some had anticipated, and USD/JPY has risen to around 157.00 from around 156.25
- RBA Governor Michele Bullock told a parliamentary committee that upside inflation risks flagged in August are now materialising, driven by Middle East oil prices, the AI investment boom and extreme weather; markets now price a 93% chance of a hike to 4.6% at the RBA’s September 28-29 meeting and see rates reaching 4.85% by early 2027, with AUD/USD edging higher
- Air Corsica has grounded four of its seven ATR turboprops after pilots reported fumes leaking into the cockpit and cabin, causing migraines, with ATR and engine maker Pratt & Whitney investigating, according to The Wall Street Journal
Iran struck an oil tanker transiting under US Navy escort in the Strait of Hormuz’s southern Omani corridor on Thursday, near Khasab, Oman, following a series of anti-ship ballistic missile launches from southern Iran. UKMTO confirmed the attack and said the vessel’s crew are safe. Separately, the US Treasury’s Office of Foreign Assets Control sanctioned Iranian crypto exchange BitBank, alleging the platform moved hundreds of millions of dollars in bitcoin to the Islamic Revolutionary Guard Corps as part of a broader crackdown on the sanctions evasion network run by financier Babak Zanjani. Oil prices were a touch lower on the session, while gold rallied above $4,360 an ounce before easing back.
In Asia, Japan’s national consumer price index for August undershot forecasts across every measure ahead of the Bank of Japan’s policy decision. Headline CPI came in at 1.9% year on year, flat versus July and below the 2.0% expected, while core CPI printed at 1.7%, down from July’s 1.8% and short of the 1.8% forecast. The core-core measure also came in at 1.7%, well below the 2.0% expected. The softer print prompted a modest weakening in the yen, as it raised doubts over how hawkish the Bank’s outlook would be even with a rate hike still widely priced.
The Bank of Japan subsequently raised its short-term policy rate to 1.25%, a 31-year high, from 1%, a level set at the June meeting. The decision matched market expectations, and USD/JPY has since risen to around 157.00 from around 156.25. Two dissents on the vote suggest a somewhat less hawkish outcome than some market participants had been positioned for.
In Australia, Reserve Bank Governor Michele Bullock told a parliamentary committee that upside inflation risks flagged in August are now materialising, citing Middle East oil prices, the artificial intelligence investment boom and extreme weather, even as growth slows and unemployment holds at 4.5%. The RBA held its cash rate steady at 4.35% for a second consecutive meeting in August, but had singled out the Middle East conflict and a global data centre investment boom as key risks to inflation at the time; both have since moved in an inflationary direction. “Developments since then suggest that although growth in the Australian economy is slowing, some of these upside risks to inflation appear to be materialising,” Bullock said, adding that the labour market remains tight and that a period of subdued demand growth is needed to bring inflation back down. Her comments were widely read as signalling that the RBA is likely to raise its cash rate at its September 28-29 meeting, and markets now imply a 93% probability of a fourth hike this year, to 4.6%, with rates seen reaching 4.85% by early 2027. AUD/USD moved a little higher on the remarks.
China’s offshore yuan, CNH, hit its strongest in four years. Trump and XXi are set to meet next week.
In corporate news, French carrier Air Corsica has grounded four of its seven ATR turboprop aircraft after pilots reported fumes leaking into the cockpit and cabin, with some crew experiencing migraines. ATR and engine maker Pratt & Whitney are investigating the cause, according to The Wall Street Journal. ATR is a 50-50 joint venture between Airbus and Italy’s Leonardo.
This article was written by Eamonn Sheridan at investinglive.com.