ForexLive Asia-Pacific FX news wrap: Awaiting the Federal Open Market Committee (FOMC) cut

• A JP Morgan strategist says a Federal Reserve rate cut is not needed
• Australia CPI preview – CBA expect “Headline inflation in August back within RBA’s target”
• FOMC forecasts from 28 bank analysts. Forecasts for today’s cut, dot plots, 2024 and 2025
• People’s Bank of China will be setting interest rates this week and next
• Australian August Monthly CPI preview – Westpac expect 2.7% y/y for the monthly read
• PBOC sets USD/ CNY reference rate for today at 7.0870 (vs. estimate at 7.0828)
• Australia leading index in August shows still very slow growth ahead
• El Erian cites ‘The Economist’ – Fed rate cuts “may disappoint “
• Japan August data shows a big miss for both exports and imports – recap
• Japan Machinery orders for July 2024: -0.1% m/m (expected +0.8%)
• Japan August exports +5.6% y/y (expected +10.0%) & imports +2.3% y/y (expected +16.6%)
• Asian markets holidays reminder – Hong Kong is closed today
• JP Morgan CEO Dimon says FOMC rate cut today is “not going to be earth-shattering.”
• New Zealand data – Current account deficit for Q2 comes in larger than expected
• A 50bp Federal Reserve rate cut coming today? History says ‘No’.
• Bank of Canada Rogers still sees work to do on inflation, but core shouold decline
• North Korea has fired off another ballistic missile
• US to buy 6 million barrels of oil for its Strategic Petroleum Reserve
• Most analysts expect a 25bp interest rate cut from the Federal Reserve today
• New Zealand data – Q3 consumer confidence 90.8 (prior 82.2)
• RBA Assistant Governor (Financial System) Jones speaking today, Wednesday, September 18
• Oil – private survey of inventory shows a headline crude oil build vs. draw expected
• Forexlive Americas FX news wrap: USD/JPY rebounds on solid US retail sales
• S&P squeezes out a small gain for the 7th consecutive higher close
• Trade ideas thread – Wednesday, 18 September, insightful charts, technical analysis, ideas

USD/JPY
swung lower through the session, retracing around 50% or so of its
gain on Tuesday during Europe and US time. We had data from Japan
that missed expectations but the yen strengthened regardless. The
move lower for the USD was reflected across some of major FX, albeit
in smaller ranges. EUR, AUD, NZD all gained a few tics.

Bank
of Canada’s Senior Deputy Governor Carolyn Rogers spoke
late in the Canadian day. She said while the yearly headline
inflation rate has come back to target officials at the Bank want to
see even more progress
on inflation. USD/CAD
has done little through the session.

Mainland
China returned from holidays today (Hong Kong was out). The People’s
Bank of China set the USD/CNY reference rate at its strongest (for
CNY) since January, and injected a hefty 568bn yuan into the banking
system. However, this was more than offset by 487 bn yuan of reverse repo and
591 bn yuan of MLF loans expiring today for a 500bn+ yuan net drain.

Still
to come today is the rate cut from the Federal Reserve’s Federal
Open Market Committee (FOMC). Most analysts expect a 25bp rate cut
while market pricing is leaning towards a 50bp rate cut. The
announcement is due at 1800 GMT, 1400 US Eastern time.

This article was written by Eamonn Sheridan at www.forexlive.com.