ForexLive Asia-Pacific FX news wrap: China’s CPI slows, PPI plunges

• China’s consumer inflation picked up but was below expectations … limp demand
• Oil prices up since opening for the week – potential hurricane getting narrative love
• China August 2024 CPI +0.6% y/y (expected +0.7%)
• PBOC sets USD/ CNY reference rate for today at 7.0989 (vs. estimate at 7.0951)
• Japan chief cabinet secretary Hayashi cites BOJ’s Ueda saying more rate hikes ahead
• RBC expect the RBA to cut its cash rate in February 2025 (previously forecast May 2025)
• Goldman Sachs forecasts 25bp Fed rate cuts in September, November and December
• Japan (revised) Q2 GDP +0.7% q/q (preliminary was +0.8%)
• Monthly UK jobs market report showed a significant slowdown in August
• China’s Xi and Russia’s Putin both compliment North Korea
• NATO members Romania and Latvia say Russian drones violated their airspace
• Yellen says no red lights flashing for financial risks, & US economy reached soft landing
• BlackRock warns that a 50bp FOMC rate cut might signal worries, not confidence
• Oil traders heads up – NHC issues forecast Gulf of Mexico hurricane
• JP Morgan Chief US Economist Feroli thinks a 50bps FOMC rate cut ‘the right thing to do’
• Bank of America expect an extended series of Federal Reserve and Bank of Canada rate cuts
• Weekend – China to remove restrictions on foreign investment in the manufacturing sector
• Trade ideas thread – Monday, 9 September, insightful charts, technical analysis, ideas
• Monday morning open levels – indicative forex prices – 09 September 2024

Weekend:

• China’s central bank didn’t buy any gold in August
• Newsquawk Week Ahead: Highlights include China & US CPI, ECB rate decision, UK GDP
• Weekly Market Outlook (09-13 September)
• Did a flawed Goldman Sachs report roil the market on Friday?

USD/JPY
was a mover once again, from early lows around 142.00 to as high as
around 143.00 before retracing a touch. News and data flow was quiet. Yen doesn’t need much of either to carry on its volatility as
speculation continues to swirl of Fed rate cuts and BoJ rate hikes
and liquidity providers remain nervous. We did get comments from
Japan’s
chief cabinet secretary Hayashi and
also data revising Q2 GDP growth a touch slower.

Oil
prices rose, bouncing a little from the reopening of futures trade
for the week. Narratives pointed to a potential developing hurricane
in the Gulf of Mexico. Given the downtrend in oil I wouldn’t be
surprised if this is shrugged off soon (assuming its actually been
shrugged on).

From
China today we had disappointing CPI data and cratering PPI data. The
CPI missed estimates by a touch but did record a seventh consecutive
month of rising. PPI, factory-gate prices, meanwhile, fell for a 23rd
straight month of contraction, at a much faster than expected pace.
USD/CNH rose on the session. At the margin the weaker inflation
figures is a negative for the yuan.

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