Not Much Relief, After All

Relief that came with the news of a temporary avoidance of a potential government shutdown remained short lived. Sentiment in stocks markets turned rapidly sour, both in Europe and in the US, while the US treasury yields didn’t even react positively to the no shutdown news in the first place. The selloff in the US […]

Japanese Yen Tries to Withstand Laws of Gravity

Japanese yen tries to withstand the laws of gravity, but we’re likely only minutes/hours away from a push beyond USD/JPY 150 which could trigger interventions by the MoF/BoJ. Unless the BoJ profoundly changes its monetary policy stance, we believe that any interventions will eventually be in vain. Strong underlying trade dynamics are likely to remain at play today (higher real rates, stronger dollar and equity weakness).

RBA Governor Bullock Left Rates Unchanged at Her First Meeting

Governor Bullock has made absolutely minimal changes in her first Statement despite evidence of higher inflation in the September quarter. She is likely to make her mark in November when the staff refreshes their forecasts for growth and inflation.

Australian Dollar Falls as RBA Leaves Interest Rates on Hold for a Fourth Month

The Australian dollar softened this morning after the RBA opted to leave the Cash Rate at 4.1% but warned some further tightening may be required.

Swiss Franc Slips as Inflation Falls

Major central bankers have their hands full as they continue to battle stubborn inflation. The Swiss National Bank is also concerned about inflation, but other central bankers would love to have the SNB’s problem, as inflation remains within the SNB’s target range of 0%-2%.

Crypto Fails to Accelerate But Sticks to an Uptrend

Crypto market capitalisation fell by 2.5% to $1.09 trillion. The market failed to accelerate but remains in an uptrend despite the general decline in demand for risk assets.

Dollar Traders Lock Gaze on US Nonfarm Payrolls

With the US economy proving more resilient than other major ones and inflation rebounding on the back of rallying oil prices, the Fed raised its rate-path projections at its latest gathering, although it did not press the hike button. Specifically, policymakers forecasted one more quarter-point increase before the end of this year, while they saw interest rates ending 2024 at 5.1%, up from June’s projection of 4.6%.

Brent Crude – Oil Pares Gains in Risk-Averse Trade

Oil prices have rallied strongly on the back of supply restrictions and the economy failing to live up to expectations was always going to be one of the primary counter-risks for the price.

Australia: August Monthly CPI Indicator

The Monthly CPI lifted 0.6% in August as expected. Inflation was restrained by various government energy rebates but there is still an upside risk to both our CPI and Trimmed Mean forecasts.

Dollar Rally

FX: Another strong day for the USD, with USD/JPY challenging new highs and EUR/USD moving further below 1.06. Thus far into the week however, SEK outperforms rest of G10 (inc. USD) and USD/SEK broke below 11.00 yesterday, despite another sour day for risk. Neighbouring NOK does not follow suit however, and instead EUR/NOK continues to trade within the 11.40-50 interval.