BOJ BRINGS YEN INTO SHARPER FOCUS
Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com.
MORNING BID - BOJ BRINGS YEN INTO SHARPER FOCUS
It was left to the Bank of Japan (BOJ) to end "central banker week" by doing nothing on rates, though it did bring the yen into sharper focus.
BOJ statements can be rather Delphic, so their latest was mercifully brief at five paragraphs of plain prose, including eight uses of "moderate" or "moderately" to describe the economic background.
One notable passage was at the end, where it highlighted financial and foreign exchange markets in a clear reference to recent ructions in stocks and the yen.
It noted that yen movements had become more likely to affect prices, implying a weaker currency would add more to inflation than in the past and, presumably, that might not be welcome anymore.
That was enough to nudge the yen a little higher to 142.18 per dollar, but it's still down large for the week. EURJPY is up 1.8% for the week and the Aussie up 2.6%, so maybe carry trades are back on the menu.
Markets will have to wait until BOJ Governor Ueda's presser at 3:30 p.m. (0630 GMT) to divine more on the outlook for tightening, particularly whether the October meeting is live for a hike.
Markets have just 3 basis points of tightening priced in for October, though that is almost six weeks away so there's plenty of time for things to change. Most analysts polled by Reuters favour December for a hike of 25 basis points, though the market still only has 7 bp in the price. 0#BOJWATCH
The Nikkei was largely unfazed and closed up 1.53%, while much of Asia tracked Wall Street's overnight rally, still basking in the Fed's outsized rate cut.
Earlier, China's central bank surprised markets by not cutting its prime rates, then had to intervene in forex markets to stop the yuan from rising too fast past 16-month highs.
Optimists argued the delay was so rate cuts could be included in a big stimulus package, but there's been talk of such a package in the works since the pandemic and none has materalised. Others suspect the PBOC is more concerned by falling bond yields and bank profit margins and will have to ease reserve requirements first.
And a final word on the yield curve. For two years the inverse curve supposedly signalled certain recession, even as U.S. growth ran above trend.
Now its the dis-inversion of the curve that economic orthodoxy says means a recession is inevitable, even as consumers keep spending, weekly jobless claims hit their lowest since May and the rather reliable Atlanta GDPNow measure points to Q3 growth of 2.9%.
You can't have it all ways, and maybe the curve isn't infallible.
Key developments that could influence markets on Friday:
- UK August retail sales, Canada retail sales, German PPI, EU consumer confidence
- Speech by Catherine Mann, external member of the BoE MPC
- Conversation between ECB President Christine Lagarde and Kristalina Georgieva, Managing Director IMF
- Federal Reserve Bank of Philadelphia President Patrick Harker speaks
- Bank of Canada Governor Tiff Macklem gives speech
(Wayne Cole)
Actifs liés
Dernières actualités
Avertissement : Les entités de XM Group proposent à notre plateforme de trading en ligne un service d'exécution uniquement, autorisant une personne à consulter et/ou à utiliser le contenu disponible sur ou via le site internet, qui n'a pas pour but de modifier ou d'élargir cette situation. De tels accès et utilisation sont toujours soumis aux : (i) Conditions générales ; (ii) Avertissements sur les risques et (iii) Avertissement complet. Un tel contenu n'est par conséquent fourni que pour information générale. En particulier, sachez que les contenus de notre plateforme de trading en ligne ne sont ni une sollicitation ni une offre de participation à toute transaction sur les marchés financiers. Le trading sur les marchés financiers implique un niveau significatif de risques pour votre capital.
Tout le matériel publié dans notre Centre de trading en ligne est destiné à des fins de formation / d'information uniquement et ne contient pas – et ne doit pas être considéré comme contenant – des conseils et recommandations en matière de finance, de fiscalité des investissements ou de trading, ou un enregistrement de nos prix de trading ou une offre, une sollicitation, une transaction à propos de tout instrument financier ou bien des promotions financières non sollicitées à votre égard.
Tout contenu tiers, de même que le contenu préparé par XM, tels que les opinions, actualités, études, analyses, prix, autres informations ou liens vers des sites tiers contenus sur ce site internet sont fournis "tels quels", comme commentaires généraux sur le marché et ne constituent pas des conseils en investissement. Dans la mesure où tout contenu est considéré comme de la recherche en investissement, vous devez noter et accepter que le contenu n'a pas été conçu ni préparé conformément aux exigences légales visant à promouvoir l'indépendance de la recherche en investissement et, en tant que tel, il serait considéré comme une communication marketing selon les lois et réglementations applicables. Veuillez vous assurer que vous avez lu et compris notre Avis sur la recherche en investissement non indépendante et notre avertissement sur les risques concernant les informations susdites, qui peuvent consultés ici.
