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Citigroup expects the Bank of Japan to raise interest rates in June 2026, earlier than its previous forecast of July.May 1st - Geely Automobile announced on May 1st that its April sales volume was 235,164 vehicles, of which 135,591 were new energy vehicles, accounting for 58% of total sales.On May 1st, according to an analysis of the Bank of Japans accounts, Japan may have intervened in the yens exchange rate for the first time since July 2024, using approximately $34.5 billion on Thursday. By comparing data from the Bank of Japans accounts with forecasts from currency brokers, the intervention is estimated to be around 5.4 trillion yen. In 2024, Japanese authorities intervened to support the yen four times, averaging about 3.8 trillion yen each time. On Thursday evening, Finance Minister Satsuki Katayama warned that "decisive action" was imminent, after which the yen appreciated sharply. Subsequently, an informed source revealed that the authorities had intervened in the market. Data released by the central bank on Friday showed that due to fiscal factors, its current account is expected to decrease by 9.48 trillion yen next Thursday (the first working day after the Golden Week holiday). This decrease is far greater than the approximately 4.08 trillion yen predicted by currency brokers such as Tokyo Short-Term Fund, Chuo Short-Term Fund, and Ueda-Yagi Short-Term Fund. This is Katayamas first exchange rate intervention since taking office, and the market generally believes that the initial results are significant, pushing the yen to appreciate by more than 3%. However, this battle is far from over. Katayama also cautioned traders to remain vigilant, saying on Thursday that they should not put down their phones during the five-day Golden Week holiday.May 1st - According to the Ministry of Transport, it is estimated that on May 1st, 2026 (the first day of the May Day holiday), the total cross-regional passenger flow will reach 344.1 million person-times, an increase of 55.9% compared to the previous day and 3.4% year-on-year. Among them, railway passenger volume will reach 24.8 million person-times, an increase of 25.3% compared to the previous day and 7.3% year-on-year. Highway passenger flow (including non-commercial passenger car trips on expressways and ordinary national and provincial highways, and commercial passenger transport on highways) will reach 315.24 million person-times, an increase of 59.5% compared to the previous day and 3.2% year-on-year.According to Nikkei: Japan and Australia will prioritize cooperation in the rare earth and nickel sectors.

GBP/USD falls to around 1.2370 as the BoE considers taking swift action ahead of UK inflation and US purchasing managers' indices

Alina Haynes

Apr 17, 2023 13:53

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On Monday morning, the GBP/USD currency pair retested an intraday low of 1.2390 after extending Sunday's decline from a 10-month high. To provoke adverse after breaking a four-week uptrend, the Cable pair explains the most recent concerns emanating from the United Kingdom (UK) and the optimism surrounding the Federal Reserve (Fed).

 

According to the Financial Times (FT), "The Bank of England is considering a major overhaul of its deposit guarantee scheme, including increasing the amount covered for businesses and compelling banks to pre-fund the system to a greater extent to ensure faster access to cash when a lender collapses."  The revelation fuels banking concerns in the United Kingdom and places pressure on the Cable duo.

 

UK Chancellor Jeremy Hunt's concerns about US subsidies may also be exerting downward pressure on the GBP/USD exchange rate as British firms rush to claim benefits before leaving the country. According to the news, "Chancellor Jeremy Hunt warned Sky News that Britain should be wary of any new subsidies, warning that they could undermine the economy and possibly even spark a protectionist trade war."

 

A larger-than-expected decline in US retail sales was unable to offset positive data from US industrial production and the University of Michigan's (UoM) consumer confidence index from the previous day. Despite this, US retail sales decreased by 1.0% in March compared to the predicted -0.4% decline and February's -0.2% decline. As opposed to the 0.2% market consensus and previous reading, Industrial Production increased by 0.4% in the month in question. The preliminary result of the University of Michigan's (UoM) Consumer Confidence Index for April, which increased to 63.5 from 62.0 analysts' expectations and previous readings, was also encouraging. In addition, inflation forecasts for the next year increased from 3.6% in March to 4.6% in April, while inflation forecasts for the next five years decreased by 2.9% during the same month.

 

Notably, Fed officials have recently appeared more hawkish than their BoE counterparts, which has exerted additional pressure on the GBP/USD exchange rate.

 

In this environment, the S&P 500 Futures exhibit modest gains following Wall Street's pessimistic close, while bond yields remain unchanged following weekly increases.

 

Moving forward, the current week is crucial for GBP/USD speculators as it contains a variety of high-quality inflation, employment, and UK PMI data. These data may be used to support the Bank of England's (BoE) officials' waning hawkish inclination and may keep bears in play. However, the US PMIs and Fed discussions should not be disregarded when looking for clear guidelines.

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