Dollar tenses for data verdict on rate cut risks
Updates at 0450 GMT
By Wayne Cole
SYDNEY, Aug 13 (Reuters) -The dollar was in limbo on Tuesday as investors waited to see how U.S. economic data affected the chance of outsized rate cuts, while a rally in Japanese stocks helped staunch the bleeding in yen carry trades.
The greenback rose 0.33% to 147.72 yen JPY=EBS, having briefly touched a one-week high of 148.23 overnight before profit-taking emerged.
Government sources told Reuters that Japan's parliament plans to hold a special session on Aug. 23 to discuss the central bank's decision last month to raise interest rates.
The euro stood at $1.0938 EUR=EBS, after creeping higher overnight and nearer to resistance at $1.0944 and $1.0963.
Sterling last bought $1.2778, while the dollar index =USD was flat at 103.13.
Producer price figures due later will provide an appetizer for the main inflation report on Wednesday, and could move markets since they feed through to the core personal consumption (PCE) measure favoured by the Federal Reserve.
Forecasts are for a 0.2% rise in both the headline PPI and the core measure.
More important will be the consumer price report and retail sales for July which could have a material impact on whether the Fed eases by 25 basis points or 50 basis points in September.
Currently futures are evenly split on the larger move, having briefly priced it as a dead certainty last week when stock markets were in free fall. FEDWATCH
"A hot CPI and hot sales would be the most volatile scenario, and see the bond market quickly repricing back to a 25bp cut," wrote analysts at JPMorgan in a note.
"A cool CPI and cool sales could ease some concerns about the stagflation risks, but bring renewed recession concerns to the market," they added. "We may see the bond market quickly react to this print pricing in 50bps or more of Sept cuts."
The former outcome would likely lift Treasury yields and support the dollar, while the latter would have the opposite effect. Recession talk, in particular, has tended to boost the yen and Swiss franc as safe havens.
The futures market 0#FF: clearly still sees recession as a risk with 101 basis points of Fed easing priced in by Christmas, and more than 120 basis points for next year.
That seems to sit at odds with much of the economic data which has the influential Atlanta Fed GDPNow estimate of growth running at an annual 2.9%.
"The July CPI annual rates are expected at 3.0% y/y and 3.2% y/y for the core," noted analysts at ANZ. "Although the trend is moderating, inflation is too high for the Fed to justify the market pricing 100bp of rate cuts between September and year-end."
"A material deterioration in the data or intensified disinflation process would be required to deliver that."
In other currencies, the Aussie dollar AUD=D3 rose 0.17% to $0.6597, while the New Zealand dollar NZD=D3 firmed 0.3% to $0.6036.
Data on Tuesday showed Australian wages rose at their slowest pace in a year in the June quarter, falling short of expectations, while softer gains in the private sector suggest the labour market was easing.
Reporting by Wayne Cole; Editing by Sam Holmes
Mga Kaugnay na Asset
Pinakabagong Balita
Disclaimer: Ang mga kabilang sa XM Group ay nagbibigay lang ng serbisyo sa pagpapatupad at pag-access sa aming Online Trading Facility, kung saan pinapahintulutan nito ang pagtingin at/o paggamit sa nilalaman na makikita sa website o sa pamamagitan nito, at walang layuning palitan o palawigin ito, at hindi din ito papalitan o papalawigin. Ang naturang pag-access at paggamit ay palaging alinsunod sa: (i) Mga Tuntunin at Kundisyon; (ii) Mga Babala sa Risk; at (iii) Kabuuang Disclaimer. Kaya naman ang naturang nilalaman ay ituturing na pangkalahatang impormasyon lamang. Mangyaring isaalang-alang na ang mga nilalaman ng aming Online Trading Facility ay hindi paglikom, o alok, para magsagawa ng anumang transaksyon sa mga pinansyal na market. Ang pag-trade sa alinmang pinansyal na market ay nagtataglay ng mataas na lebel ng risk sa iyong kapital.
Lahat ng materyales na nakalathala sa aming Online Trading Facility ay nakalaan para sa layuning edukasyonal/pang-impormasyon lamang at hindi naglalaman – at hindi dapat ituring bilang naglalaman – ng payo at rekomendasyon na pangpinansyal, tungkol sa buwis sa pag-i-invest, o pang-trade, o tala ng aming presyo sa pag-trade, o alok para sa, o paglikom ng, transaksyon sa alinmang pinansyal na instrument o hindi ginustong pinansyal na promosyon.
Sa anumang nilalaman na galing sa ikatlong partido, pati na ang mga nilalaman na inihanda ng XM, ang mga naturang opinyon, balita, pananaliksik, pag-analisa, presyo, ibang impormasyon o link sa ibang mga site na makikita sa website na ito ay ibibigay tulad ng nandoon, bilang pangkalahatang komentaryo sa market at hindi ito nagtataglay ng payo sa pag-i-invest. Kung ang alinmang nilalaman nito ay itinuring bilang pananaliksik sa pag-i-invest, kailangan mong isaalang-alang at tanggapin na hindi ito inilaan at inihanda alinsunod sa mga legal na pangangailangan na idinisenyo para maisulong ang pagsasarili ng pananaliksik sa pag-i-invest, at dahil dito ituturing ito na komunikasyon sa marketing sa ilalim ng mga kaugnay na batas at regulasyon. Mangyaring siguruhin na nabasa at naintindihan mo ang aming Notipikasyon sa Hindi Independyenteng Pananaliksik sa Pag-i-invest at Babala sa Risk na may kinalaman sa impormasyong nakalagay sa itaas, na maa-access dito.
