Oct 10, 2022
VOT Research Desk
Key News – Insights and Analysis
Discussion: Points: Japanese Yen, USD/JPY, US Dollar, Treasuries, Crude Oil, and Gold.
In the absence of the Bank of Japan, the Japanese Yen is once more under pressure.
Strong US data support the Fed’s decision to keep interest rates higher for longer.
The US CPI report later this week is eagerly awaited.
Japan is on vacation this week, but it looks like the Japanese yen is sliding quietly.
In the absence of local traders, the USD/JPY traded above 145 throughout the entire Asian trading day, a level that had previously been regarded as a precondition for the Bank of Japan’s intervention.
After Friday’s strong jobs data lifted Treasury yields, the US Dollar gained momentum heading into the weekend. A slew of Fed speakers made it clear last week that interest rates will remain high for some time. Currently, the “big dollar” is generally stronger.
The Australian bond market benefited from this increase in Treasury yields. After falling to 3.64 percent last week, the standard 10-year Australian Commonwealth Government bond (ACGB) is now returning over 3.90 percent.
However, this did little to save the Australian dollar, which fell below 0.6350 for the first time since the pandemic began and has been today’s worst-performing major currency.
Wall Street was undermined by the robust economic data from the United States, which stoked fears of additional massive Fed hikes.
As concerns about the outlook for global growth continue to grow as a result of the impact of additional rate hikes in the majority of countries, APAC equity markets followed suit and all closed in the red.
The WTI futures contract returned to below US$ 92 bbl and the Brent contract was close to US$ 97 bbl on the negative outlook for crude oil.
Under US$ 1,690 per ounce, the price of gold is also under pressure.
Today, a number of speakers from the ECB and Fed will share their thoughts; however, this week’s focus will be on the US CPI, which will be released on Thursday.
