ForexLive Asia-Pacific FX news wrap: Gold hit a record high, silver and copper surged also

• Federal Reserve speakers on Monday include Bostic, Barr, Waller, Jefferson
• Iranian state media has confirmed no survivors of helicopter crash
• Saudi Crown Prince postpones his trip to Japan
• ICYMI – China’s benchmark lending rates were held steady: 1 yr LPR @ 3.45% 5 yr @ 3.95%
• PBOC sets USD/ CNY central rate at 7.1042 (vs. estimate at 7.2162)
• China sets 1 and 5 year LPR rates unchanged, as expected
• Bank of England Deputy Governor Ben Broadbent is speaking on Monday
• PIMCO says Federal Reserve and RBA’s next move is more likely a cut rather than a hike
• Weak consumption in Japan may further pressure BoJ to raise interest rates, slow yen fall
• Oil – Morgan Stanley expect demand growth greater than normal
• New Zealand’s RBNZ Monetary Policy Shadow Board recommends cash rate on hold this week
• UBS expect the Federal Reserve to cut rates later this year – here’s why
• Strong evidence suggest significant Chinese FX intervention in April to prop up CNY (yuan)
• A helicopter carrying Iranian president Ebrahim Raisi and other leaders has gone missing
• Trade ideas thread – Monday, 20 May, insightful charts, technical analysis, ideas
• Monday morning open levels – indicative forex prices – 20 May 2024
• Federal Reserve Chair Powell Sunday speech – no comment on monetary policy or the economy
• Weekly Market Outlook (20-24 May)
• Join us in Johannesburg, South Africa this week
• Forexlive Americas FX news wrap 17 May.The price of the DXY index closes below its 100W MA

The
week opened up with ears open for a Sunday (US time) speech from
Federal Reserve Chair Powell. It was a commencement speech at a law
school, which Powell gave remotely via video as he contracted Covid
late last week. Powell did not comment on the economy or policy.

Data
flow was barely existent.

We
did, however, have the Loan Prime Rate (LPR) settings from the
People’s Bank of China. LPRs play a vital role in determining
interest rates for loans and mortgages in China. The PBoC left both
the 1- and 5-year unchanged, as was widely expected, at 3.45% and
3.95% respectively. The last time the 1-year was cut was back in
August last year while the 5-year was cut in February this year.
Expectations are that the People’s Bank of China is still likely to
ease monetary policy further. One compelling reason is that more
liquidity will be needed for China’s banks to purchase government
bonds, including the issuance of ultralong special Treasury bonds
that started last Friday – these bonds are raising cash for
economy-building purposes (stimulus).

On
the news front, a helicopter carrying Iranian president
Ebrahim Raisi and Iranian Minister of Foreign Affairs Hossein
Amir-Abdollahian crashed in a
mountainous area of the East Azerbaijan region of Iran, northwest of
Tehran and bordering Azerbaijan. It took many hours for the downed
chopper to be found and when it was it was just smashed and burned
wreckage. No one aboard survived.

This
has implications, potentially, for the oil price. While there are no
suggestions, yet at least, of foul play, if these surface and perhaps
the blame laid on the US or Israel it’d be an escalation of an already
tense Middle East situation. Which would, at the margin, be
supportive of oil.

In
other news the Saudi King, Salman bin Abdulaziz, will undergo a
treatment programme at Al Salam Palace in Jeddah for a lung
inflammation. Saudi Arabia’s Crown Prince Mohammed bin Salman was due
in Japan from May 20 to May 23. He has postponed the trip. He was to
meet with Prime Minister Fumio Kishida.

The
oil price nudged higher today with both these items out of the Middle
East.

Gold,
silver and copper jumped. Gold to a record high.

USD/JPY
rose towards 156.00 and has once again pulled back from there.
Major FX was mainly bound in small ranges only.

Brent oil, tiny opening gap to begin the week:

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