According to Patrick Bennett, BOJ seemed to have missed a trick today. They appear to be putting/drawing a line in the sand and putting pressure back on PM Abe to deliver. But surely their confidence in that is paper thin. Therefore, they should respond. They are after all there to do the best for the economy. Telling everyone the economy is recovering and inflation will rise is no more than optimistic guess work. BOJ must of course know what the impact on the Jpy would be. However, caution on talk of intervention, as that is the responsibility of MOF
Our trader Jon said he will be cautious about being short UsdJpy at these levels. Other colleague Sam highlighted that we have broken the 200-Weekly SMA of 106.11. Last time we crossed that line was Dec 2012.
Australia’s May jobs data was rather muted, adding 17.9k, these come from the part times sector. AudUsd jumped to 0.7445 high then fell back when revision showed April’s employment up 0.8k versus 10.8k. AudUsd back to the 0.74-teens. The 100-Day SMA seats at 0.7400 and there is a Aud800mio option strike at 0.7425 maturing today NY cut.
Yields of 10-year Aussie bonds continue down, hitting record below 2%.
BOJ decision sent AudNzd lower, at same time we had RBA Assistant Governor Christopher Kent talking in Brisbane that a depreciating Aussie dollar acts as a buffer for negative events. AudNzd reached low 1.0444.
UsdCad seen following Aud and Nzd, paying no attention to oil futures. We have seen some prop accounts buying near 1.2900-05 area. BOJ decision, Aud weakened and UsdCad was up to 1.2944.
There is something serious above this 1300 level in spot Gold. The precious metal revisited 1300 twice today and has corrected back. I suspect the sellers are mining companies’ hedging.
Overall Usd was weak in EM space.
Yesterday’s MSCI delay sent speculators buying USDCNH up to 6.6151. Then selling pressure from the onshore USDCNY dragged USDCNH lower. Usd weakness post-FOMC, today’s fix at 6.5739 was in line with trader’s call.
MAS survey shows that private sector economists have again cut 2016 Singapore GDP growth forecasts. They see full year growth at 1.8% versus previous 1.9% in March.