ForexLive Asia-Pacific FX news wrap: Awaiting the Bank of Japan

• Hamas leader Ismail Haniyeh was killed in Tehran
• Here’s a forecast for a 25bp RBA rate hike next week – citing inflation not falling
• China Vice Finance Minister says will strengthen fiscal policy adjustments
• Other Australian data: Retail sales for June 0.5% m/m (expected +0.2%)
• Other Australian data: Private sector credit (June) 0.6% m/m (expected +0.4%)
• AUD/USD has dropped under 0.6500 after core inflation comes in lower than expected
• China June 2024 Official Manufacturing PMI 49.4 (expected 49.4)
• Australian Q2 core inflation +0.8% q/q (expected 1.0%)
• PBOC sets USD/ CNY central rate at 7.1346 (vs. estimate at 7.2419)
• New Zealand business confidence, July 2024: 27.1 (prior 6.1)
• Nasdaq equity index futures, NQ, have risen in US evening (Globex) trade
• Japan Industrial Production (preliminary, June 2024) -3.6% m/m (expected -4.8%)
• Japan June 2024 Retail Sales +3.7% y/y (expected +3.3%)
• US Vice President Harris says will ‘take on’ price gougers, bring down costs
• OPEC meeting (JMMC) coming up this week
• New Zealand Building Permits (June 2024) -13.8% m/m (prior -1.7% )
• “Bank of Japan to outline bond taper plan, debate rate hike timing”
• Deutsche Bank says late (US) summer is often a ‘difficult time’ for equities
• “A cheat sheet for the July Fed meeting”
• Bank of America expect a Bank of Japan rate hike today … see USD/JPY to (eventually) 145
• ICYMI – Goldman Sachs CEO David Solomon expects one or two Fed rate cuts in 2024
• Private survey of oil inventories shows larger headline crude draw than expected
• Economic calendar in Asia Wednesday, July 31, 2024 – BOJ day, China PMIs, Australian CPI
• Trade ideas thread – Wednesday, 31 July, insightful charts, technical analysis, ideas

From
Australia we had the Q2 inflation data, which was of intense focus.
Interest was centred on the ‘trimmed mean’ core measure, with
much speculation in the market that if it came in higher than the 1%
q/q it was expected there would be another Reserve Bank of
Australia rate hike next week at the August 5 and 6 meeting. The
trimmed mean came in below expected at 0.8% q/q, which means the Bank
will not raise its cash rate at this meeting. AUD/USD was marked
lower immediately, back under 0.6500.

NZD/USD
spiked higher (selling of AUD/NZD cross). Earlier from New Zealand
was a huge jump in business confidence in July (see bullets above for
the data) as the potential for a Reserve Bank of New Zealand rate
cut rises.

Other
data from Australia today showed a mixed result for retail sales. The
m/m beat but q/q and y/y were very poor. The consumer remains not
overly keen to spend.

From
China we had the National Bureau of Statistics (NBS) official PMIs.
The Manufacturing PMI remained in contraction. The Services PMI
dropped to 50.2 from 50.5 the previous month. China’s economy
continues to struggle.

Oil
traded higher. News was out that Hamas leader Ismail Haniyeh was
killed in Tehran.

As
I post we are still awaiting the Bank of Japan decision. USD/JPY has
fallen on the session. Lows were under 152.25 and its bounced back to
153.00, and then down to 152.75 as I post. Liquidity was poor today,
of course.

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