- Markets await BOJ meeting decisions
- Speculation about second Japanese rate hike this year
The yen rose in Asian trade against a basket of major rivals, extending gains for the second day against the dollar, and on track for touching 2-⅕ month highs amid speculation about another interest rate hike by Bank of Japan this year.
The yen is buoyed by a drop in US 10-year treasury yields ahead of the Federal Reserve’s meeting tomorrow, expected to provide important clues on the future of US interest rates.
The Price
The USD/JPY fell 0.4% today to 153.01 yen, with a session-high at 154.35.
Yen rose 0.1% on Friday against the dollar, resuming gains and moving away from 2-⅕ month highs at 151.94 yen per dollar.
Yen rose 2.35% last week, the fourth weekly profit in a row, and the largest since late April after the rapid unwinding of carry trades.
BOJ
Tomorrow, Tuesday, the Bank of Japan is holding its policy meeting, at which it might raise interest rates by 10 basis points to 0.20%.
The BOJ will likely announce a steep cut in the monthly purchases of government bonds, according to recent data.
The BOJ’s efforts to normalize policies come at a time when most other central banks have already tightened their policies for years and now moved on to rate cuts.
US Yields
US 10-year treasury yields fell 0.4% on Monday, sharpening losses for the third session and plumbing two-week lows at 4.171%, hurting the dollar’s standing.
The developments came ahead of the Federal Reserve’s policy meeting tomorrow, at which it’ll likely provide fresh clues on the odds of a rate cut at the September meeting.
A shrinkage of the Japan-US long-term yields gap would boost the yen’s standing against the dollar and other major rivals.
Ethereum rose on Friday amid mixed performance by high-risk assets following important US inflation data that could have bearing on the future of US monetary policies.
US core personal spending, excluding food and energy, rose by 0.2% m/m in June, and 2.6% y/y, matching expectations.
The US consumer confidence index released by the Michigan University fell 2.6% m/m to 66.4 in July.
There’s now a 23% chance of a 0.5% Fed interest rate cut at the September policy meeting, and a 100% chance of at least a 0.25% rate cut.
Ethereum
Ethereum rose 4.9% on Coinmarketcap as of 21:34 GMT to $3267, while marking a weekly loss of 6.8%.
US stock indices rose on Friday as analysts assess the latest US inflation data released today.
Official data showed core personal spending, excluding energy and food, rose 0.2% m/m in June, and 2.6% y/y, matching expectations.
Investors continue to assess latest earnings results by major corporations for the second quarter of 2024, with both Alphabet’s and Tesla’s results awaited this week.
On trading, Dow Jones rose 1.6%, or 656 points as of 16:44 GMT to 40,591, while S&P 500 rose 1%, or 56 points to 5455, as NASDAQ added 0.8%, or 155 points to 17,337.
- Oil prices about to mark their third weekly loss in row.
- Brent prices dive below $80
- Chinese authorities strive to boost economic performance
Global oil prices fell in American trade on Friday, with US crude approaching six-week lows, while Brent is trading below $80, about to mark the third weekly loss in a row amid mounting concerns about Chinese demand.
China’s oil imports tumbled in June in a time when Chinese authorities are taking aggressive measures to stimulate the economy.
Prices
- US crude fell 2.7% today to $76.22 a barrel, with a session-high at $78.56.
- Brent fell 3.6% to $79.47 a barrel, the lowest since June 10, with a session-high at $82.65.
- On Thursday, US crude rose 1.1%, the second profit in a row away from 2-⅕ month lows at $76.07.
- Brent rose 1.1% back then, the first profit in six days.
Weekly Trades
This week, oil prices are down 3.5% on average, about to mark the third weekly loss in a row.
Chinese Demand
Sudden cuts to China’s interest rates have indicated the gravity of the situation in China, and how far authorities are willing to go to boost the economic performance.
China’s Oil Imports
Official customs data showed Chinese oil imports tumbled by 10.7% y/y in June, while refined imports fell by 32%.
US Stocks
Official data from the Energy Information Administration showed US commercial crude stocks fell by 3.7 million barrels last week, the fourth weekly decline in a row, passing estimates of a 2.6 million barrels drawdown.
Totak stocks have thus fallen to 436.6 million barrels, the lowest since early February, in a positive sign for demand in the world’s largest fuel consumer.
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