The Morning Hark - 22 Aug 2023
Today’s focus... consolidating ranges in a vacuum of data
Slow start to the week, with DXY testing both sides of recent ranges and net displacement limited as EURUSD remains around 1.09, AUDUSD 0.64 and USDJPY back sub-146.00.
CNH implied yield squeeze has stabilised USDCNH sub 7.30 and had a knock-on impact to weaken the USD overnight in G10.
As we wait for JPow, US Fixed income was the focus of Monday’s session with 10yr real yields breaking 2% … (ING: Treasury slide keeps markets nervous)
This took the USD stronger, led by USDJPY testing 146.30-50 as headlines from Reuters reprinted a JPM report indicating 150 maybe the BoJ’s new trigger lvl (Gloval FX: The bearish case for CNY, EUR and JPY)
The WSJ article “How Hard Should the Fed Squeeze to Reach 2% Inflation? “ by Nick Timiraos , supported the Fi sell off. However, he subsequently went on Twitter to indicate JPow will most likely veer away from discussing a higher risk free rate at Jackson hole.
One area of positivity for China in 2023 has been the markets recognition of its growth as a major player in the the nEV market. It’s gaining crucial inroads into Japanese and German market share … MS Thoughts on the Market Global Autos: Are China’s Electric Vehicles Reshaping the Market?
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All times in British Summer Time (BST)
US (15:00): Richmond Fed Index
US (15:00): Home Sales
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