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On March 8th, four sources familiar with the matter told Reuters that Saudi Arabia has informed Iran that while it supports a diplomatic solution to the conflict between Iran and the United States, it may take appropriate measures in response if Iran continues to attack Saudi Arabia and its energy sector. The sources revealed that two days prior, the Saudi Foreign Minister met with the Iranian Foreign Minister and clearly articulated Riyadhs position. The sources indicated that Saudi Arabia is willing to accept any mediation approach aimed at de-escalating the situation and reaching a solution through negotiations. They also emphasized that Riyadh and other Gulf states have never allowed the United States to use their airspace or territory to launch airstrikes against Iran.On March 8th, local time, on the evening of the 7th, Iranian Islamic Revolutionary Guard Corps spokesman Naini stated that in the first week after the outbreak of the conflict, the Iranian armed forces implemented a multi-layered offensive strategy. Statistics show that Iran conducted 600 missile strikes, using various types of solid and liquid-fueled ballistic missiles and cruise missiles. In addition, Iran conducted 2,600 drone operations. During these operations, more than 200 sensitive targets located at US military bases and key Israeli facilities were precisely targeted and destroyed. Naini emphasized that the scale of Iranian firepower projection in the first three days of the conflict was equivalent to the total firepower deployed during the entire "12-Day War." Naini also stated that 17 ships belonging to the United States, Israel, and their allies have been attacked.Local news agencies, citing sources from Irans oil ministry, reported that fuel depots in three regions, including Karaj, west of the capital Tehran, were attacked.Irans Supreme National Security Council Secretary Larijani: The United States is already mired in its own miscalculation.Irans Supreme National Security Council Secretary Larijani: Regional countries have realized that the United States can no longer guarantee their security.

USDJPY rises 1.0% to offset US inflation-driven fall above 142.00; US Michigan CSI expected

Alina Haynes

Nov 11, 2022 17:57

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During the Asian session on Friday, USDJPY bounces at the intraday high near 142.50 as it consolidates the worst daily decline since October 1998. In doing so, the yen pair takes signals from the market's slightly bearish sentiment and the lack of movement in US Treasury yields during the day.

 

Nonetheless, fears of coronavirus return as Beijing, China reports the highest daily spike in covid infections in over a year. For the first time in seven months, the number of daily coronavirus cases exceeded 10,000 at the national level. Aside from this, 10-year US Treasury rates remain quiet near the monthly low near 3.81%, which was flashed on Thursday after the sharpest decrease since the start of December 2021.

 

Bond market inaction may be related to U.S. and Canadian bank holidays, as well as the market's demand for greater confirmation of the Federal Reserve's decision to suspend rate hikes (Fed).

 

It should be highlighted that increased fears of Japan's involvement in the currency market to defend the yen, the Bank of Japan's (BOJ) defense of the cheap money policy, and optimism for an economic recovery in the next years all contribute to the USDJPY resurgence.

 

Thursday, the US Consumer Price Index (CPI) for October surprised markets by slipping to 7.7% YoY, the lowest level since March of last year, compared to forecasts of 8.0% and a previous reading of 8.2%. Importantly, the Core CPI fell to 6.3% from 6.5% and earlier readings of 6.6%.

 

The president of the Dallas Federal Reserve, Lorie Logan, indicated that the October CPI inflation report is a welcome respite and that it may soon be time to slow the rate of rate hikes. Patrick Harker, president of the Federal Reserve Bank of Philadelphia, told Reuters on Thursday that the US Federal Reserve may slow its rate hikes in the coming months. Esther George, president of the Federal Reserve Bank of Kansas City, Loretta Mester, president of the Federal Reserve Bank of Cleveland, and Mary Daly, president of the Federal Reserve Bank of San Francisco, have all recently advocated for moderate rate hikes at upcoming meetings.

 

As a result, the CME's FedWatch Tool shows an 80% chance of a 50 basis point (bps) rate hike in December, up from about 55% shortly after the Fed's meeting last week.

 

Given recent forecasts for an easy Fed rate hike in December and the BOJ's preference for dovish monetary policies, the USDJPY pair is likely to continue falling. The initial readings of the US Michigan Consumer Sentiment Index (CSI) for November, which is expected to be 59.5 compared to 59.9 in October, will precede the meeting between US President Joe Biden and Japan's Prime Minister (PM) Fumio Kishida on Sunday in order to provide clear direction.

 

Due to the oversold RSI conditions, USDJPY bears are challenged by an ascending support line from early March and the 100-day moving average (DMA) in the vicinity of 141.00-140.85. The comeback must surpass the late-October swing low of 145.10 to impress buyers.

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