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On July 10th, New York Fed Open Markets Account Manager Perry stated that there is no predetermined path for reserve management purchases, and the New York Feds open market trading desk can adjust the purchase volume upwards or downwards based on money market conditions. Furthermore, Perry indicated that the trading desk is prepared to implement any changes and interest rate control frameworks that the committee may decide to pursue, coinciding with Fed Chairman Warshs appointment of a working group on the Feds balance sheet. The Fed began reserve management purchases last December due to anticipated rapid reserve outflows in April, driven by tax revenue inflows into the Treasurys general account. When the Treasurys bank account balances at the Fed increase, bank system reserves decrease.European Central Bank President Christine Lagarde stated her willingness to discuss the joint EU borrowing proposal put forward by Spain, emphasizing that the digital euro will not replace cash. Negotiations are still ongoing.European Central Bank President Christine Lagarde: I will not run for the French presidential election.July 10th - As of 2:30 PM closing, the Shanghai Gold futures contract rose 1.31% to 902 yuan/gram, the Shanghai Silver futures contract rose 3.22% to 14,693 yuan/kilogram, and the SC Crude Oil futures contract fell 3.22% to 465 yuan/barrel.July 10th - As of 2:30 PM closing, the Shanghai Gold Futures main contract rose 1.31%, the Shanghai Silver Futures main contract rose 3.22%, and the SC Crude Oil main contract fell 3.22%.

USD/JPY falls to 146.00 as the DXY weakens and interest in BOJ policy rises

Alina Haynes

Oct 27, 2022 15:28

 截屏2022-10-27 上午10.02.34.png

 

During the Asian session, in response to negative signals from the US dollar index, the USD/JPY pair plunged below 146.00. (DXY). Following Wednesday's low of 146.22, the asset's two-day downward trend has extended. The main index is reaching the bottom of Monday's knee-jerk reaction near 145.77 as it continues to decline.

 

The dollar bears are facing a severe sell-off due to the positive market sentiment. The risk-sensitive currencies have benefited from an increase in risk appetite. The US dollar index (DXY) has struck a new monthly low of 109.56 and is anticipated to stay volatile until the release of crucial US economic data.

 

The increased demand for U.S. government bonds has resulted in a decline in yields. This is due to the global markets' increased confidence. The yield on 10-year United States Treasury notes has decreased to 4%.

 

According to estimates, the Gross Domestic Product of the United States expanded by 2.4% in the third quarter. Despite the ultra-hawkish monetary policies of the Federal Reserve (Fed) and the previously disclosed 0.6% fall in growth, forecasts indicate a positive growth rate.

 

In addition, US Durable Goods Orders data will continue to be a key point. Compared to a reduction of 0.2%, it is projected that economic statistics will increase by 0.6%. Notable is the increase in core inflation, which includes oil and food prices. In spite of this, the predicted increase in demand for durable goods in the United States demonstrates healthy household demand.

 

Investors in Tokyo are anticipating the Bank of Japan's (BOJ) interest rate decision on Friday. In view of the shocks to foreign demand, BOJ Governor Haruhiko Kuroda will continue an ultra-loose monetary policy to stimulate the outlook for economic development. In addition, Japanese policymakers are anxious that the inflation rate could go below 2%; hence, an extremely liberal policy is the best alternative.

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