Read on the Trading Floor - 17 April 2024
Today’s focus… BoJ watch, BoE cuts, Tariffs = Inflation, and much more
Macro Themes At Play
Theme 1 - Intervention Watch
Theme 2 - BoE can still start cutting in June...?
Theme 3 - "as long as needed"
Theme 4 - Tariffs + Sanctions + Food prices + Commodities = Inflation
Theme 5 - Waiting for a response
Further reading and listening of note
Theme 1 - Intervention Watch
Another day, another session watching and waiting for Japanese authorities. The pressure has reduced on the JPY as US10s settle around 4.65% for now, and many feel 155-156 will be the trigger level. We should probably get used to the standoff as the absence of any key US data this afternoon makes it seem unlikely today will be the day. Watch for a weak 20yr auction to weigh on US curve but without meaningful top tier data it could be another few days/weeks before we see MOF supplying USD if at all. In fact why would they sell USD into a strong US economy????? In 2022 the US economy dipped when they intervened.
Nikkei Asia - Strong dollar poses question over timing of Japan intervention
Brent Donnelly am/FX - My USD view plus much moar (including an MOF Intervention Playbook)
Across The Spread by Weston Nakamura - JPY’s Long, Slow Death
USDJPY vs US10s
Source: tradingeconomics.com