Selling Pressure Shifts to Yen and Swiss Franc, Dollar Recovers on Fed's Hawkish Remarks
| Action Insight Daily Report 5-17-24 |
Selling Pressure Shifts to Yen and Swiss Franc, Dollar Recovers on Fed's Hawkish Remarks |
Yen's selloff resumed after brief recovery yesterday and continued to weaken throughout Asian session. Markets largely ignored comments from former BoJ chief economist Toshitaka Sekine, who suggested the next rate hike could happen as soon as in June. The general understanding is that BoJ will at least wait for Q2 data to confirm if Q1 GDP contraction was merely a temporary setback before making any policy changes. However, downside risk for Yen appears limited, given the likelihood of intervention by Japanese authorities if Yen approaches the critical 160 level against Dollar. Conversely, Dollar recovering broadly today, supported by hawkish comments from several Fed officials. Overnight, the record run in US stock indexes stalled, with minor decline, while 10-year Treasury yield saw a recovery. Despite encouraging April inflation data, one month of data is insufficient to confirm a sustained disinflation trend. But given recent market reactions, risk would be skewed to the downside for Dollar for the near term... |
GBP/JPY Daily Outlook Daily Pivots: (S1) 195.66; (P) 196.29; (R1) 197.54; More... GBP/JPY's rebound from 191.34 resumed after brief recovery and intraday bias is back on the upside. Rise from 191.34 is seen as the second leg of the corrective pattern from 200.53. Sustained break of 197.07 will pave the way to retest 200.53. On the downside, firm break of 195.02 will argue that the third leg has started, and target 191.34 support and possibly below. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 22:45 | NZD | PPI Input Q/Q Q1 | 0.70% | 0.60% | 0.90% | | 22:45 | NZD | PPI Output Q/Q Q1 | 0.90% | 0.50% | 0.70% | | 02:00 | CNY | Retail Sales Y/Y Apr | 2.30% | 3.80% | 3.10% | | 02:00 | CNY | Industrial Production Y/Y Apr | 6.70% | 4.60% | 4.50% | | 02:00 | CNY | Fixed Asset Investment YTD Y/Y Apr | 4.20% | 4.60% | 4.50% | | 09:00 | EUR | Eurozone CPI Y/Y Apr F | 2.70% | 2.70% | | 09:00 | EUR | Eurozone CPI Core Y/Y Apr F | 2.40% | 2.40% |
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