TradeTheNews.com Staff
TradeTheNews.com
General trend
- On Friday night Asia time US Fed Chair Powell gave the markets the message they had been waiting and wanting to hear at Jackson Hole; that US inflation is on a sustainable path to target (2%) and the time has come for policy to adjust. Data will determine timing and pace of rate cuts.
- USD index hit an 8-month low that night, while stocks and currencies rose (JPY +1.3%), along with Gold and Bitcoin.
- Likely to be an increased focus on US jobs going forward as Powell indicated that the dual mandate of the Fed was now squarely in play.
- Following through in Asia today bonds ticked higher in tandem with the rest of the world, while equities were mixed. The Nikkei under-performed -1.3% as the Yen strengthened. Automakers along with other Japanese exporters sold off during the morning in Tokyo.
- Currencies were slightly further up against USD, continuing Friday night’s post-Powell theme, led by JPY +0.3% (was up as much as +0.7%, well into the 143 handle during the Asian morning).
- Over the weekend Robert F. Kennedy Jr suspended his Presidential campaign and endorsed Donald Trump; By taking his name off the ballots in 10 battleground states he likely gives the Trump campaign a boost in the toss-up states that will decide the election, given his appeal to independent voters and some moderate Republicans and Democrats. The magnitude of such a boost is yet to be determined by how many supporters follow him to support the Trump campaign.
- China PBOC left MLF rates unchanged (at 2.3%) on their new monthly MLF operations date of the 25th (delayed one day today due to weekend), with a larger injection than expected. PBOC also injected a further 471B Yuan in regular 7 day reverse repo ops.
- US equity FUTs -0.1% during Asian trading.
Looking ahead (Asian time zone)
- Mon Aug 26th (Mon eve DE Ifo Aug Business Climate, Mon night US July Durable Goods).
- Tue Aug 27th N/A.
- Wed Aug 28th AU July CPI (Wed eve DE GfK Consumer Conf).
- Thu Aug 29th (Thu night DE prelim Aug CPI, US Q2 GDP 2nd est).
- Friday Aug 30th, JP July Industrial Production & Retail Sales, AU Retail Sales, JP Aug Consumer Conf (Friday eve various European prelim Aug CPI, Fri night India Q2 GDP, CA Q2 GDP, US Core PCE, Michigan Consumer Sentiment).
- Sat Aug 31st CN Aug National PMIs.
Holidays in Asia this week
- Mon Aug 26th Philippines.
Headlines/economic data
Australia/New Zealand
- ASX 200 opens +0.1% at 8,030.
- Australia Treasurer Chalmers could visit China ‘within weeks in early Sept’ [would be the first such trip to China in 7 years] – AFR [update].
- Follow up: NZ PM Luxon: We have an energy security crisis; Govt to reverse ban on offshore oil and gas exploration and allow electricity line companies to own generation - financial press.
China/Hong Kong
- Hang Seng opens +0.6% at 17,709; Shanghai Composite opens flat at 2,855.
- AI engineers in China said to be secretly accessing banned Nvidia chips via remote access - WSJ.
- Follow up: China govt said to urge local govts to accelerate special bond sales - Chinese press.
- China bond trading ‘collapses’ amid PBOC crackdown; cites data from CFETS – US financial press [update].
- China PBOC Gov Pan Gongsheng reiterated overall financial system is stable – Press interview [update].
- China PBOC said to be carrying out stress-tests on financial institutions for bond risks - report by PBOC-backed Financial News.
- (US) White House National Security Adviser Sullivan will visit China Aug 27-29th and will meet with Chinese diplomat Wang Yi in China – press [weekend update].
- US govt adds 123 new entities to its 'entity list', includes 63 in Russia and 42 in China [weekend update].
- China Pres Xi: China and UK should strengthen dialogue and cooperation - follows 1st call with UK PM Starmer [weekend update].
- China PBOC conducts CNY300B V CNY275BE in 1-year medium term lending facility (MLF) monthly setting at 2.30% VS. 2.30% prior.
- China PBOC sets Yuan reference rate: 7.1139 v 7.1358 prior (strongest since Jun 13th).
- China PBOC Open Market Operation (OMO): Sells CNY471B in 7-day reverse repos; Net injects CNY419B v net injects CNY242B prior.
Japan
- Nikkei 225 opens -0.5% at 38,156.
- Japan Jun Final Leading Index CI: 109.0 v 108.6 prelim; Coincident Index: 113.2 v 113.7 prelim.
- Japan ruling party LDP's Kono confirms candidacy for leadership contest on Sept 27th - press conference.
- Ishiba is leading in the polling for the LDP leadership elections - ANN Poll; Ishiba and Koizumi are both leading according to an Asahi poll [consistent with prior polls].
South Korea
- Kospi opens +0.6% at 2,716.
- South Korea Central Bank (BOK) Study: South Korean exports would be hit by Trump tariffs on China - Financial press.
- Bank of Korea (BOK) official said the Aug rate decision was ‘difficult’ – Press [update].
- Follow Up: South Korea is planning KRW40T in consumption supporting measures before Chuseok holiday (Sept 16-18th) - Press.
Other Asia
- Singapore July Industrial Production M/M: 10.1% v 5.0%e; Y/Y: +1.8% v -0.5%e.
- World Bank: Forecasts Vietnam 2024 GDP 6.1%; 2024 inflation 4.5%.
North America
- *(US) Fed Chair Powell: Confidence has grown that inflation is on sustainable path to 2%; time has come for policy to adjust - Jackson Hole Symposium [weekend update].
- Robert F. Kennedy Jr (Independent) suspends Presidential campaign and endorses Donald Trump; To take his name off ballots in 10 battleground states [weekend update].
- NSC Reaches tentative five-year collective agreements with four labor unions - financial press [weekend update].
Europe
- (EU) ECB’s Holzmann (Austria, dissenter): Sept rate cut is not foregone conclusion – Press [update].
- (IL) Axios' reporter Barak Ravid: Israeli negotiating team for talks on the hostage deal has returned to Israel from Cairo.
- (EU) ECB's Lane (Ireland, chief economist): The return of inflation to 2% target is not yet secure; Policy must remain restrictive as long as necessary - Jackson Hole (update).
- (UK) BOE Gov Bailey: Second round inflation effects appear to be smaller than we expected, but it is too early to declare victory - Jackson Hole speech [weekend update].
- (EU) ECB’s Centeno (Portugal, dove): We always look at data as a whole; Sept is an easy decision - TV interview [weekend update].
- (EU) ECB’s Centeno (Portugal, dove): We always look at data as a whole; Sept is an easy decision - TV interview [weekend update].
Levels as of 01:20 ET
- Nikkei 225 -1.1%; ASX 200 +0.7%; Hang Seng +0.7%; Shanghai Composite -0.3%; Kospi -0.5%.
- Equity S&P500 FUTs -0.1%; Nasdaq100 FUTs -0.1%, Dax -0.4%; FTSE100 -0.2%.
- EUR 1.1181-1.1202: JPY 143.45-144.37; AUD 0.6773-0.6798; NZD 0.6113-0.6133.
- Gold flat at $2,546/oz; Crude Oil +0.6% at $75.31/brl; Copper -0.1% at $4.2553/lb.
All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.
Recommended Content
Editors’ Picks
EUR/USD stays below 1.1100, looks to post weekly losses
EUR/USD continues to trade in a narrow range below 1.1100 and remains on track to end the week in negative territory. Earlier in the day, monthly PCE inflation data from the US came in line with the market expectation, failing to trigger a reaction.
GBP/USD struggles to find a foothold, trades near 1.3150
GBP/USD stays on the back foot and trades in negative territory at around 1.3150 on Friday. The US Dollar holds its ground following the July PCE inflation data and doesn't allow the pair to stage a rebound heading into the weekend.
Gold retreats toward $2,500 ahead of the weekend
Gold stays under modest bearish pressure and declines toward $2,500 in the American session on Friday. The 10-year US Treasury bond yield edges higher toward 3.9% after US PCE inflation data, causing XAU/USD to stretch lower.
Week ahead – Investors brace for NFP amid Fed rate cut speculation
Here comes another NFP week, with investors eagerly awaiting the results as they try to discern the size and pace of the Fed’s forthcoming rate cuts. The weaker than expected July numbers triggered market turbulence, instilling fears about a potential recession in the US.
Easing Eurozone inflation to back an ECB rate cut in September Premium
Eurostat will publish the preliminary estimate of the August Eurozone Harmonized Index of Consumer Prices on Friday, and the anticipated outcome will back up the case for another European Central Bank interest rate cut when policymakers meet in September.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.