ForexLive Asia-Pacific FX news wrap: China considering $142bn bank capital injection

• Federal Reserve speakers on Thursday include Powell and Williams, dissenter Bowman also
• More on China considering a 1 trillion yuan injections of capital into banks
• Bank of America say Sterling has more room to rise
• Reports that China is considering injecting US$142bn of capital into top banks
• RBA says around 2% of owner occupiers in real danger of defaulting
• PBOC sets USD/ CNY reference rate for today at 7.0354 (vs. estimate at 7.0367)
• ECB President Christine Lagarde and key board member Schnabel are speaking Thursday
• Heads up for U.S. Treasury Secretary Janet Yellen speaking on Thursday
• PBOC is expected to set the USD/CNY reference rate at 7.0367 – Reuters estimate
• BOJ July minutes – Calls for further gradual, but timely, interest rate increases
• Reserve Bank of Australia consumer forecasts are too optimistic, December rate cut likely
• BCA suggest that the stimulus announced from China is 1990s Japan all over again
• US politics: Senate passed the bill to fund the government through until December 20
• Japanese consumers face rising costs across the board as inflation pressures persist
• Eyes on China to boost the … euro
• UBS analysis predicts market support from October stimulus; Renminbi hedging recommended
• Fed’s Kugler gives guidance on Non Farm Payrolls numbers to watch
• US politics: House just passed resolution to fund the government through until December 20
• Forexlive Americas FX news wrap: US dollar storms back
• More from Fed’s Kugler – We do not want the labour market to weaken further
• UBS is forecasting Brent crude oil back to US$87 (by year end)
• Dow string of four record closes is snapped
• Fed’s Kugler says she strongly supported 50 bps rate cut
• Trade ideas thread – Thursday, 26 September, insightful charts, technical analysis, ideas

Stimulus
proposals continued out of China, the latest today being news that
Chinese authorities are considering a 1 trillion yuan (142bn USD
equivalent) injection of capital into their biggest state banks to
increase their capacity to support the stumbling economy.

Equities
in China found support on the news. More broadly, EUR, AUD, GBP all
ticked a little higher against the US dollar. Ranges were small only.

From
the Bank of Japan today we had the minutes of the July meeting.
You’ll recall short term rates were raised again at that meeting,
in a bit of a surprise decision. Or, it would have been a surprise if
it hadn’t been leaked all over the place the day before. The
minutes didn’t contain much that wasn’t already known, members
are looking to gradually adjust rates higher ahead.

USD/JPY
dripped a little lower on the minutes but soon gained it all back to
test to highs around 144.95. Its not too far from those highs as I
update.(ps. Check out the chart below, its making a liar out me 😉 )

Coming
up during US time today are a barrage of speakers from the US Federal
Reserve, including NY Fed head Williams and Chair Powell. Governor
Bowman will also speak on the economy and policy. Bowman was the lone
dissenter at last week’s meeting, favouring a 25bp Fed Funds rate
cut over the 50bp cut that won the day.

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