Manic Monday, Turnaround Tuesday and hopefully an ordinary Wednesday. The focus this week has been Japan and overnight that didn't change the Nikkei is up 2% and USDJPY opens at 147, the BOJ'S Uchida said 'we won't raise rates when the market is unstable' and the Deputy Governor comments emerge in the wake of efforts by Japan’s government and central bank to show a united front to restore calm to markets, amid growing criticism of last week’s abrupt monetary tightening.
USD/JPY is now trading close to the 147.00 level. This is a long way from Monday’s low of 140.25 and even further from the July high, close to 161.95. The sheer size of the moves seen in USD/JPY make it hard for the market to find the new trading band. Market pricing is still suggesting that the Fed could cut rates aggressively by the end of the year, remember there are only 3 more meeting. Whilst the US economic calendar is relatively thin this week, next week brings US PPI and CPI inflation data in addition to retail sales numbers. The following week brings the Jackson Hole symposium. We expect that by then the market will have a clearer view of Fed rate cut risks through to the end of the year and presently there is over 1% of cuts priced in.
In other markets Bitcoin rose 0.7% to $56,942.75, Ether rose 1.1% to $2,517.47, the yield on 10-year Treasuries advanced two basis points to 3.91%, Japan’s 10-year yield declined one basis point to 0.875% and Australia’s 10-year yield advanced seven basis points to 4.09%. In commodities, West Texas Intermediate crude rose 0.3% to $73.43 a barrel, Spot gold opens at $2395. On the data front we are very light with US consumer credit data the highlight and the BoC Summary of Deliberations.
**For professional investors only** Any opinions, news, research, analyses, prices, or other information contained in this blog is provided as general market commentary and does not constitute (and should not be construed as containing) investment advice or an investment recommendation, or an offer of, or solicitation for, a transaction in any financial instrument. Some of this information may have been provided by third-party sources and, although believed to be reliable, it has not been independently verified and its accuracy or completeness cannot be guaranteed. No representation or warranty, expressed or implied, is made or given by or on behalf of iSAM Securities or its directors or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this blog, and no responsibility or liability is accepted for any such information. As a result, any person acting on any information does so entirely at their own risk. iSAM Securities will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
