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On July 6, Hong Kong SAR Government Financial Secretary Paul Chan said on the 6th that Hong Kong stocks rose by 18% last year, and the momentum will continue to improve in 2025. The number of applications for IPOs in Hong Kong is increasing rapidly. The amount of funds raised in the first half of the year exceeded HK$107 billion, an increase of about 22% over the whole of last year, temporarily ranking first in the world. Paul Chan said that in the past period of Hong Kong stocks rise, funds mainly chased technology stocks, driving a significant increase in the trading of derivatives related to technology stocks. "Exchange Traded Products" (ETPs) linked to different types of assets have become a new force in supporting the liquidity of Hong Kong stocks in recent years, effectively playing the role of liquidity buffer when the market fluctuates.July 6, Lloyds Bank of the United Kingdom believes that the minutes of the Federal Reserves June meeting to be released next Wednesday are not expected to change the markets expectation that interest rates will remain unchanged at the July meeting, and interest rate adjustments are more likely to take place in September. The Feds dot plot is still expected to have two rate cuts this year, but there are clear differences among policymakers, ranging from three rate cuts to unchanged.According to TASS: Russian troops have taken control of Sobolivka in the Kharkiv region of Ukraine and Piddubne in the Donetsk region.According to Nikkei News: Nissan Motor is considering having Foxconn produce electric vehicles at its Oppama plant in Okinawa, Japan.On July 6, the new South Korean Prime Minister Kim Min-seok hosted the first high-level party-government consultation meeting of the Lee Jae-myung government at the Prime Ministers Residence in Samcheong-dong, Jongno-gu, Seoul on the afternoon of the 6th. He pointed out that the current government was born in the "Light Revolution" and there is no handover committee, nor a policy adjustment period. The current cabinet is still under construction. In order to promote national recovery, the government and the ruling party should work together and go all out with the belief of saving the country and the people.

On the back of dismal BOJ Minutes and falling yields ahead of US data, the USD/JPY falls toward 136.00

Alina Haynes

Jul 26, 2022 11:55

 截屏2022-07-26 上午9.54.47.png

 

The USD/JPY pair is retesting its intraday low at 136.30 in Tokyo during the first hour of trading on Tuesday. As a result, the yen pair reverses the corrective loss from the previous day in reaction to falling US Treasury rates and conflicting comments from the minutes of the Bank of Japan's (BOJ) Monetary Policy Meeting.

 

According to the minutes of their rate-setting meeting in June, Bank of Japan officials agreed that ultra-low interest rates must be maintained to support a fragile economy and ensure that rising inflation was supported by higher wages. According to the Minute statement, members agreed that the BOJ must support the economy, which is under pressure from rising commodity prices.

 

The fear of a recession has returned in other areas of the world despite US authorities' efforts to lessen it. Ben Harris, Assistant Secretary for Economic Policy, and Neil Mehrotra, Deputy Assistant Secretary for Macroeconomics, two representatives of the US Treasury, recently voiced hope for a stronger US gross domestic product (GDP). While GDP shrank in the first quarter, aggregate income, which includes wages, business earnings, rental and interest income, continued to rise at an annual pace of 1.8 percent. This is known as gross domestic income (GDI).

 

A second quarter GDP decline would not indicate a recession owing to the underlying strength of the labour market, demand, and other indicators of economic health, according to US Treasury Secretary Janet Yellen, who addressed concerns about a US recession earlier in the week.

 

The Dallas Fed Manufacturing Index for July fell to its lowest levels since mid-2020, posting -22.6 compared to -12.5 forecast and -17.7 previously, which is noteworthy given that the Chicago Fed National Activity Index printed -0.19 in June as opposed to the anticipated -0.03 figure.

 

In addition, Bloomberg's investigation shows that the absence of trade between Australia and China is causing the Chinese recession worries that are weighing on the economic slowdown in the major countries to also be driving down the USD/JPY exchange rate. According to Bloomberg, "China's economic slowdown is spreading to important exporting countries in Europe and East Asia through weakened demand for manufactured goods, forcing Germany and South Korea to declare unusual deficits with the second-largest economy."

 

Wall Street ended with a mixed showing, with the DJI30 and S&P 500 seeing relatively modest gains while the Nasdaq saw only small declines. The 10-year US Treasury rates, on the other hand, broke a three-day downward trend and rose by around 1.75 percent, returning to the 2.81 percent level recently. S&P 500 Futures saw a notable intraday loss of 0.37 percent as of publication.

 

The key indication for intraday change for pair traders appears to be the US CB Consumer Confidence for July, formerly 98.7. As the markets get ready for a 0.75 percent interest rate increase, the Federal Open Market Committee (FOMC) meeting on Wednesday will be crucial.


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