EUR/USD 1.09423
-0.992%
Gold 3036.33
-2.501%
Oil 62.471
-5.781%
USD/JPY 146.825
0.520%
GBP/USD 1.28724
-1.731%
GBP/JPY 189.004
-1.200%
Browse More
  • English
  • 简体中文
  • 繁體中文
  • Tiếng Việt
  • ไทย
  • Indonesia
Subscribe
Real-time News
According to Politico: U.S. House Republican Don Bacon said he plans to introduce a companion bill to bipartisan Senate legislation aimed at restoring Congresss authority over tariffs, becoming the first House Republican to publicly challenge the power Trump has used to launch a massive global trade war.April 5th news, the next meeting of the Federal Reserve will be held on May 6-7. The futures market had raised the probability of the Federal Reserve cutting interest rates at that meeting to about 50%, but after Powells speech, the probability fell to about 30%. Market participants hope to see the so-called Fed Put (Fed Put option), that is, the Federal Reserve calms the troubled market by cutting interest rates, but on Friday, their expectations fell through, causing the stock market to fall. "Powells remarks highlight that we are still a long way from the macro environment and market data that may produce a Fed Put," wrote Krishna Guha, chairman of Evercore ISI. "He is seeking to control expectations to reserve room for rate cuts when unemployment rises sharply. Before that, preemptive action is impossible given the scale of the tariff inflation surge." For Powell, there is no rush now. Guha said: "It feels like we dont need to rush, it feels like we still have time."JPMorgan Chase: Predicts a US economic recession in 2025.On April 5, Federal Reserve Chairman Powell made it clear that the Fed will not rush to respond to the comprehensive tariffs imposed by the Trump administration, nor will it respond to the financial market turmoil caused by concerns about a global recession. Powell said at a conference in Virginia on Friday that tariffs could have a significant impact on the US economy, including slower growth and higher inflation. But he added that Fed officials will wait until these policies are clearer before cutting interest rates. He also emphasized that with inflation still high, the central bank has an obligation to ensure that the temporary increase in prices caused by tariffs does not turn into a more lasting increase. "The Fed cant insure the economy as it did in the trade war in 2018 and 2019 because inflation is too high and above their target," said Julia Coronado, founder of research firm MacroPolicy Perspectives. She believes there will be a recession in the second half of this year. "Even if they conclude that they need to cut interest rates, they may cut interest rates later and slower because we will be in the inflationary impulse."Russian drones carried out a "large-scale" attack on Krivoy Rog, Ukraine, following a missile strike, local Ukrainian officials said, starting fires at four locations.

USD/JPY continues Powell-led declines to fresh 14-week low, BOJ's Kuroda, and US PCE Inflation in the horizon

Daniel Rogers

Dec 01, 2022 15:22

截屏2022-12-01 上午10.12.17.png 

 

As Tokyo opens on Thursday, USD/JPY bears take advantage of the weakening US Dollar to mark the lowest level in more than three months near 137.30. In addition to falling US Treasury bond yields and a risk-on market mentality, the recent depreciation of the Yen could be attributed to a weaker yen.

 

Fed Chair Jerome Powell made his first public appearance since the November Federal Open Market Committee (FOMC) meeting by speaking at the Brookings Institution about the economic outlook, inflation, and employment. The official noted that it makes sense to reduce the rate of interest rate increases and speculated that this might occur as soon as the December meeting. Lisa D. Cook, a member of the Federal Reserve Board of Governors, praised the inflation figures as evidence that the Fed will likely take fewer steps in the future.

 

Following Powell's speech, market bets supporting a 50 basis point (bps) rate hike by the Federal Reserve in December increased from 69.9% prior to the speech to over 75%, resulting in a depreciation of the US Dollar and a rise in Treasury yields, while equities appreciated.

 

As a result, the US Dollar Index (DXY) shattered a three-day uptrend on Wednesday, exhibiting the steepest daily fall in a week and the largest monthly decline in 12 years. Notable is the fact that Wall Street benchmarks responded favourably to Fed Chair Yellen's dovish remarks, while 10-year Treasury bond yields reversed early gains to end November on a negative note near 3.61 percent.

 

In addition to Fedspeak, the poor US statistics and optimism on China's Covid situation also weighed on USD/JPY prices. Among these, the US ADP Employment Change received the most attention, as its November result of 127K constituted the lowest readings since January 2021, compared to the 200K expected and 239K previous results. In addition, China reported just over 38,000 daily cases of Coronavirus on Tuesday, which was reported on Wednesday, indicating the second consecutive day of declining virus levels after the record high was updated. The gradual easing of virus-driven activity restrictions in major cities such as Zhengzhou, Guangzhou, and Chongqing looked to have favored Yen pair sellers.

 

Moving forward, the Fed's favored inflation measure, namely the US Core Personal Consumption Expenditure (PCE) Price Index for October, which is forecasted to increase to 5.0% YoY in October from 5.1% in September, will be key for near-term USD/JPY fluctuations. The US ISM Manufacturing PMI for November will also be significant, with a predicted reading of 49.8 compared to 50.2 earlier. Recent rumors regarding the possible tightening of monetary policy by the Bank of Japan (BOJ) in 2023 are the focal point of Governor Haruhiko Kuroda's address today.


Suggestion