- Monday’s Federal Open Market Committee (FOMC) speakers include New York Fed’s Williams
- ECB President Rehn says confidence in falling inflation is improving
- China’s services PMI expansion slowed slightly in April but remains strong – Summary
- OECD says Reserve Bank of New Zealand has limited room to cut interest rates this year
- Australia’s Treasurer Chalmers says a budget surplus is ‘within reach’
- European Central Bank President Lagarde to speak on Monday
- March China Caixin Services PMI 52.5 (expected 52.5, previous 52.7)
- Number of job openings in Australia April 2024 +2.8% from previous month (previous -1%)
- PBOC sets today’s USD/RMB base rate at 7.0994 (expected value is 7.2127)
- Australian TD/MI monthly inflation rate for April 2024: 0.1% m/m (was 0.1%)
- New Zealand data: April 2024 ANZ Commodity Price Index: +0.5% m/m (previously -1.3%)
- Swiss National Bank (SNB)’s Jourdan speaks on CBDC on Monday
- People’s Bank of China expected to set USD/RMB benchmark rate at 7.2127 – Reuters estimates
- This week’s RBA meeting – ‘History suggests rate hikes are plausible’
- HSBC says “long-term yen weakness” may be necessary for the yen
- ICYMI – Warren Buffett’s Berkshire Hathaway reduced its stake in Apple by 13% in the first quarter.
- JP Morgan lowers forecast for 2024 ECB rate cut from 100bp to 75bp
- Saudi Arabia raises crude oil prices (all grades) for Asia for third consecutive month
- Please note – Monday, May 6, 2024 is a public holiday in Japan. The market is closed.
- Weekend – “Chairwoman Yellen advises caution against foreign exchange intervention after yen surge”
- Trade Ideas Thread – Monday, May 6th, Insightful Charts, Technical Analysis, and Ideas
- Hopes for Gaza ceasefire fade
- Weekly market outlook (May 6th to 10th)
- Newsquawk Week in the Week: Highlights from RBA, BoE, SOO Bank of Japan, Canadian jobs, UK GDP and more
- Forexlive Americas FX News Wrap May 3: This month’s US jobs report was reported to be weaker than expected.
Today is a Japanese holiday and the market was closed. As of the time I’m posting, there are no signs of BOJ intervention, and no comments supporting the yen from officials.
Over the weekend, Treasury Secretary Janet Yellen did not offer much support for Japan’s intervention to push the yen higher. Yellen wasn’t uncooperative, just lukewarm. This is not surprising as we were given a clear clue about this last week.
From a low that started at around 152.85 very early in Asian trading, USD/JPY has risen throughout the session and is at around 153.95 as of my posting.
In other weekend news, Saudi Aramco increased the June official selling price of Arab Light crude oil for Asian customers. This provided some support for oil prices in futures trading as the new week begins.
And they don’t do weekend news. On Saturday, Warren Buffett’s Berkshire Hathaway announced its first quarter results. This included the bombshell that the company cut its stake in Apple by 13% in the first quarter. This put some pressure on Nasdaq futures (NQ) trading.
In terms of Asia news and data flows, there was little news impact, with data flows only notable for the solid expansion in China’s Caixin Services and Comprehensive PMI. Services PMI has now recorded 16 consecutive months of expansion. All of China’s other PMIs for April also showed an expanding trend, providing further evidence that the country’s economic recovery is underway.
Chinese markets have reopened after being closed on Wednesday, Thursday and Friday. This is the first time the People’s Bank of China has set a benchmark for USD/RMB since last Tuesday, when it raised the renminbi to a three-week high (i.e., the lowest USD/RMB). The set benchmark rate was 1,130 pips higher than Reuters forecast. In order to suppress the devaluation of the renminbi, the People’s Bank has set interest rates far from expectations, and this is an effort to suppress the devaluation of the renminbi. I prefer the term devaluation to devaluation (I use that term for floating currencies), as the central bank directly supports the renminbi every day. However, it is clear that it is a managed currency rather than a floating currency. Whatever the changes, comments on Whataboutism are welcome. It’s just a joke ;-)).
Furthermore, on the central banking front, the European Central Bank’s chief economist gave an interview to Spanish media, giving a pretty clear indication that a rate hike in June is imminent, but not guaranteeing it.
Australian Finance Minister Chalmers also dropped some pretty clear hints about the government’s budget surplus this month. Chancellor Chalmers is under pressure to scale back fiscal stimulus and take some pressure off the RBA in light of persistently high inflation. A private survey of inflation in Australia released today showed inflation has fallen slightly. The headline year-on-year rate of 3.7% is the lowest level in two years, while the average core trimming rate is 3.2% year-on-year, the lowest level since June 2022.
Major currencies other than the Australian dollar and yen remained within narrow ranges.
