Highlights and Outlook for August 15
8/16 (Thursday)
08:50 JPYTrade Balance
10:30 AUDChange in Employment / Unemployment Rate
17:00 NOKNorway Policy Rate Announcement
17:30 GBPRetail Sales
18:00 EURTrade Balance
8/17 (Friday)
07:30 NZD Quarterly PPI
08:30 AUDRBA Governor Low’s Testimony (Semiannual Parliamentary)**
※ are予定 for indicator trades
◎ Today’s Focus
There are four points to watch.
1) First, Japan and Europe trade balance.The trade balance result could become a new spark, so it is important to monitor.
Current trade tensions and tariffs are under close watch.
The results of the trade balance could become a new source of fire, so be attentive.
2) Second, today and tomorrow there are major events for AUD.
Australia is under pressure from the US-China trade war and Chinese stock prices, causing AUD to decline.
On the weekly, daily, and intraday AUD/USD charts, the trend is downward.
AUD/USD Weekly Chart
AUD/USD Daily Chart
AUD/USD Hourly Chart
Today’sEmployment Statistics are important, but tomorrow’sLow RBA Governor’s Parliamentary Testimonyis especially important.
Watch what tone they set regarding the AUD’s weakness.
“Australia is a resource-exporting, tourist nation. A weaker currency is welcomed.”
“When currency is strong, there are concerns about it.”
“Inflation target around 2%””
“The next move is a rate hike.”
“The timing of a rate hike is undecided.”
That has been the traditional stance of the RBA.
3) Third, pay attention to the headlines US vs Turkey.
This is currently the market’s most concerning factor.
Turkey announced retaliatory tariffs and additional duties on the US.
Contents include: passenger cars 120%, alcoholic beverages 140%, imported tobacco 60%. Other items such as cosmetics, rice, coal, etc., doubled.
The total amount is projected to be about 5.33 billion dollars.
Turkey could not concede to the US, so it sought support from China, Russia, and Europe.
Yesterday,Qatar announced direct investment of $15 billion (about 1.6 trillion yen) in Turkey.
Even with many negative factors for Turkey,the news of direct support prompted Turkish lira buying (risk reassessment).
USD/TRY Hourly Chart
Turkish lira strengthened to around 1 USD = 6 lira
However, yesterday and the day before, statements from Turkey and retaliatory tariffs emerged, but Trump remained quiet.
The response from President Trump and the US is a focus.
4) Fourth, the renminbi approaching the lowest levels against the US dollaris a key development.The US condemns currency devaluation.
The yuan is approaching its lowest level against the dollar.
Watch the evolution of the renminbi and the US response.
USD/CNY Weekly Chart
◎ Positions Currently Held and Today’s Strategy
EUR/USD Short remains held.
EUR/USD Daily Chart
Today, with a focus on Turkey, the US-China trade war, Iran, Saudi, Europe, and UK geopolitical risk, I would like to trade if there is a suitable opportunity.
However, the market is quiet, so I will avoid reckless trading.
Also, note the franc.
Swiss franc is a currency allowed to be intervened.
Global risk-off centered on Turkey is driving safe-haven franc buying.
Yesterday alsoconcern about franc strength and intervention remarksappeared.
Pay attention to levels against the euro.
EUR/CHF Daily Chart
Dollar-Yen remains capped on the upside.
Qatar’s support for Turkey offered some risk relief but did not last long.
As risk eased slightly, the yen weakened, but soon reverted.
The upside remains heavy, and the downside seems solid, suggesting a range-bound market.
USD/JPY Hourly Chart
Another point to watch is long-term yields; they should be checked closely.
Among them, the US-Japan yield gap, Germany-Italy yield gap, and Turkey long-term yields are crucial.
US 10-year yield Chart
Germany 10-year yield Chart
Italy 10-year yield Chart
Turkey 10-year yield Chart
◎ Yesterday’s Key Officials’ Remarks
Taro Aso, Deputy Prime Minister and Finance Minister
“Daylight Saving Time is not a bad idea in many respects.”
“There hasn’t been much movement in the yen or the euro.”
“We must monitor the Turkish lira decline.”
Katai-Turkish Vice President
“The US administration raised tariffs on some American-made products in response to economic aggression.”
South Africa Reserve Bank (SARB)
“The main inflation risk is currency weakness, with high crude oil prices and wage increases exceeding inflation.”
Zurich / Swiss National Bank (SNB) Vice Chairman
“The current strength of the franc indicates that the FX market remains fragile.”
“Unstable conditions lead to franc buying as a safe haven.”
“Current conditions prove the need for negative rates or FX intervention.”
Turkish President’s Spokesperson
“We hope for further rebounds in the Turkish lira.”
“We expect Turkey’s economy to normalize.”
Moody’s, Rating Agency
“South Africa’s fiscal reforms are gradual, but medium-term targets remain attainable.”
Scholz, German Finance Minister
“Regulatory easing for the euro, consideration by the European Commission as well.”
