ForexLive Asia-Pacific FX news wrap: USD/CNY mid-rate set lowest since September 27

• Federal Reserve speakers Wednesday: Powell, Cook, Williams, Barr, Jefferson
• European Central Bank speakers for Wednesday, 8 November 2023 include head economist Lane
• Baidu ordered artificial intelligence chips from Huawei this year, alternative to Nvidia
• Bank of England Governor Bailey is scheduled to speak Wednesday, 8 November 2023
• BOJ Gov Ueda: Won’t necessarily wait for for positive real wages to exit YCC, neg rates
• Moody’s affirms Japan’s A1 rating, and maintains a stable outlook
• RBNZ’s survey of inflation expectations: 1yrs at 3.6%, 2yrs at 2.76%
• More PBOC Gov: Will resolutely guard against overshooting risks of yuan exchange rate
• BOJ Gov Ueda says its important to raise labour productivity to push real wages up
• PBOC Gov says will keep monetary policy prudent, support stable growth for real economy
• HSBC are forecasting a 15% gain for global equities in 2024
• PBOC sets USD/ CNY mid-point today at 7.1773 (vs. estimate at 7.2839)
• BOJ Ueda says YCC policy side effect risk is of greater market, including FX, volatility
• ICYMI – ECB’s Stournaras said Bank could cut rates if CPI drops under 3% by August 2024
• National Australia Bank forecast a February 2024 RBA cash rate rise (& December is live)
• ICYMI: US could start reimposing oil-focused sanctions on Venezuela
• Japan (Reuters monthly) Tankan, Both manufacturing and services improve in November
• Hedge fund inflows into US equities the largest since June
• Federal Reserve Chair Powell is speaking on Wednesday, 8 November 2023 (Williams too)
• Oil – private survey of inventory shows large headline crude build
• Goldman Sachs on US election year seasonals – weaker than normal equity returns expected
• Forexlive Americas FX news wrap: US dollar climbs even as yields fall
• US Treasury says no major trading partners met criteria for currency manipulation
• Major indices keep winning streak going. NASDAQ index up 8 consecutive days
• Trade ideas thread – Wednesday, 8 November 2023

It
was a relatively small range for most major forex rates. The Chinese
yuan maintained its recent relative strength, and indeed the onshore
yuan reference rate was set at its highest since late in September.
We also heard from People’s Bank of China Governor Pan Gongsheng on
the currency, saying that China will resolutely guard against
overshooting risks of the yuan exchange rate. If you’ve been
following along with the USD/CNY reference rate setting each day
you’ll know the PBOC is already doing this. He added that the yuan
will be basically stable, reasonable and balanced. On the economy and
policy he said he expects China will achieve its annual GDP growth
target of 5% this year and that the Bank will maintain prudent
monetary policy to revive real economic growth. On debt levels in China he said authorities will provide emergency funding to heavily indebted local governments as needed.

While
on central banks, Bank
of Japan Governor Kazuo Ueda said volatile currency moves were among
the side effects the central bank was scrutinizing in maintaining its
bond yield curve
control
(YCC)
policy,
in the wake of the yen’s declines against the dollar once
again (highs circa 150.60 were seen today).
On
policy ahead, Ueda said the Bank won’t necessarily need to wait
until real wages turn positive for exiting YCC and negative
rates. He outlined he’d need to see confirmation on whether the
pass-through of import price rises dissipate, and if the
wage-inflation cycle kicks off as the Bank expects, as conditions that
need to be met to end YCC and negative rates.

The
Reserve Bank of New Zealand’s survey of inflation expectations
showed these falling to their lowest in 2 years. NZD/USD has tracked
a little higher during the session, it’s an outperformer albeit in
a not large range,

Oil
retraced a little after its sharp drop on Tuesday, but only a little.
This was despite the privately surveyed oil inventory data released
late in the US afternoon showing a huge headline build. There is
chatter that the number was leaked early, contributing to the oil
price slump.

Offshore yuan, hourly candles: