ForexLive Asia-Pacific FX news wrap: USD/JPY jumps 100 pts

• Federal Open Market Committee (FOMC) speakers on Monday include NY Fed’s Williams
• ECB’s Lane says Confidence on getting inflation lower is improving
• China’s services PMI expansion slowed a touch in April, but remains solid – recap
• OECD says the Reserve Bank of New Zealand has limited space for rate cuts this year
• Australian Treasurer Chalmers says “within reach” of budget surplus
• Heads up for European Central Bank President Lagarde speaking Monday
• China Caixin Services PMI for March 52.5 (expected 52.5, prior 52.7)
• Australian job vacancies April 2024 +2.8% m/m (prior -1%)
• PBOC sets USD/ CNY reference rate for today at 7.0994 (vs. estimate at 7.2127)
• Australian TD/MI monthly inflation April 2024: 0.1% m/m (prior 0.1%)
• New Zealand data: ANZ Commodity Price Index for April 2024: +0.5% m/m (prior -1.3%)
• Swiss National Bank (SNB) Jordan speaks on CBDC on Monday
• PBOC is expected to set the USD/CNY reference rate at 7.2127 – Reuters estimate
• RBA meet this week – “History suggests a rate increase is plausible”
• HSBC on the yen, “weaker for longer” may be needed
• ICYMI – Warren Buffett’s Berkshire Hathaway cut its Apple stake in Q1 by 13%
• JP Morgan trim back estimates for ECB rate cuts in 2024 to 75bp, from 100 previously
• Saudi Arabia raised the price of its crude oil (all grades) to Asia, 3rd straight month
• Reminder – it’s a national holiday in Japan on Monday, 6 May 2024. Markets are closed.
• Weekend – “Yellen counsels caution on currency intervention after surge in yen”
• Trade ideas thread – Monday, 6 May, insightful charts, technical analysis, ideas
• Gaza ceasefire hopes dwindle
• Weekly Market Outlook (06-10 May)
• Newsquawk Week Ahead: Highlights include RBA, BoE, BoJ SOO, Canada Jobs, UK GDP
• Forexlive Americas FX news wrap 3 May: US jobs report weaker than expectations this month.

It
was a Japanese holiday today, markets were closed. As I post there
has been no sign of Bank of Japan intervention nor any comments to
support the yen from officials.

Over
the weekend US Treasury Secretary Yellen spoke, not sounding too
supportive of Japan’s intervention to send the yen higher. Yellen
was not unsupportive, she was just lukewarm. This should be no
surprise as we were given clear clues last week on this.

From
opening lows around 152.85 or so in very early Asian trade USD/JPY
has moved higher through the session to be circa 153.95 as I post.

In
other weekend news, Saudi Aramco raised the June official selling
price of Arab Light crude for customers in Asia. This has offered
some support to oil prices in futures trade to open the new week.

And,
the weekend news is not done. On Saturday Warren Buffett’s
Berkshire Hathaway released its first-quarter earnings report. In
this was the bombshell that the firm had cut its Apple stake in Q1 by
13%. This weighed on Nasdaq futures (NQ) trade somewhat.

As
for Asia news and data flow, news was of little impact and data flow
was notable only really for another solid expansion for China’s
Caixin Services and Composite PMIs. The services PMI has registered
expansion now for 16 consecutive months. Other PMIs from China for
April have all been shown to be in expansion also, further evidence of the developing
economic recovery in the country.

Chinese markets reopened after
being closed on Wednesday, Thursday and Friday. We had the first
People’s Bank of China USD/CNY reference setting since Tuesday last
week, the PBOC lifted the CNY to its highest in 3 weeks (ie lowest
for USD/CNY). The reference rate that was set was more than 1130 pips from
the Reuters estimate. The PBOC has been setting the rate a huge
distance away from the estimate, an effort to hold the yuan from
devaluation (ps. I prefer the term devaluation for the yuan rather
than depreciation, which I keep for floating currencies. Given the
huge manipulation efforts the PBOC direct at propping up the yuan
every single day its clearly a managed currency, not floating.
Whataboutism comments welcome, whatever floats yer boat – pun
intended 😉 ).

Further
on the central bank front, European Central Bank Chief Economist
gave an interview to Spanish media, dropping pretty clear hints about
a June rate hike coming up, but not guaranteeing it.

Australian
Treasurer Chalmers dropped pretty clear hints also, about a budget
surplus coming up this month from his government. Chalmers is under
pressure to trim fiscal stimulus given sticky high inflation, and
take some pressure off the RBA. We had a private survey of inflation
in Australia published today, showing inflation dribbling a little
lower; the y/y headline at 3.7% is a two-year low, while the core
trimmed mean measure at 3.2% y/y, is its lowest since June of 2022.

AUD
and other major FX apart from the JPY maintained small ranges only.

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