It was another day of subdued market movement across major FX as traders digested the hawkish Federal Open Market Committee (FOMC) & Powell, and
It
was another day of subdued market movement across major FX as traders
digested the hawkish Federal Open Market Committee (FOMC) & Powell, and waited
for SNB, BoE, and ECB decisions.
The
movement we did have was for a slightly higher USD against most major FX. In small ranges. For such minor moves explanations are
often superfluous/wrong but if you go with the hawkish Fed raising
recession fears I guess I can live with that. It fits with regional
stocks trading a little softer also. I wouldn’t marry that
explanation though, a reversal of the small moves could change it
quite quickly (there are arguments derived from market pricing that
the Federal Reserve will cut rates in the back half of next year, for
example).
On
the data front
- Australia produced another strong jobs report (see
bullets above). - Japan’s
trade balance showed the sixteenth straight month of trade deficits
(higher energy import costs key to this, but not exclusively).
Japan’s exports were strong y/y but were swamped by the big imports
bill. - Of
more focus was the ‘activity’ data from China which showed misses
on industrial output, fixed investment and a terrible retail sales
number (again, see bullets above).
Central
bank activity – the People’s Bank of China added funds to its
banking system. A medium term lending facility (MLF)
of 500bn yuan matured and was more than offset by a 650bn MLF
operation. There is more in the bullets above on the reasons for the
cash injection.
Elon
Musk was in the news again, he sold a large chunk of Tesla shares.
The fourth hefty sale from him this year as he seeks to cover his
debt bleed.
In
metals, ANZ raised its end-2023 gold price target to USD 1,900/oz.
Oil
lost some ground. Fed hawkishness and a partial reopening of some
sections of the Keystone pipeline cited.
news.google.com