Key Points and Outlook for August 20th!!
8/20 (Monday)
Turkey market early close (13:00)
21:15 BOCWilkins BOC Deputy Governor speech
8/21 (Tuesday)
Turkey market closed (Eid al-Adha)
00:00 USDBoositori (Boert) Atlanta Fed President speech
01:00 EURWeidmann Germany Federal Reserve President speech
07:00 AUDLow RBA Governor speech
10:30 AUDRBA minutes release(August 7 release)
◎ Today’s Highlights
Last weekCPI exceeded 3.0%,Pay attention to Wilkins BOC Deputy Governor’s remarks.
Big Surprise‼ Canada CPI 3.0% announced on August 17!
Boos-Tic Atlanta Fed President Wilkins also has a voting seat in 2018.
In particular, the Fed has priced in a September rate hike. However, for December it is not fully priced in, sowe should watch for statements that could push December rate hike back.
Regarding the RBA, there is likely no big surprise from Governor Lowe or minutes release.
However,we should monitor where the Australian (RBA) is focusing and what needs to improve for a rate hiketo occur.
Turkey, a market with high interest, is closed early today and will be closed for the rest of the week starting tomorrow.
However, being closed does not guarantee headlines will be absent, so stay cautious.
What to watch regarding Turkeylong-term yields in Turkey, Germany, Italy, and Spain.
If German yields fall, it signals uneaseand risk-off behavior.
If other countries’yields rise sharply, that countryreflects risk and capital outflow.
Interest yields are a gauge to monitor.
Turkey 10-year yield chart
Germany 10-year yield chart
Italy 10-year yield chart
Spain 10-year yield chart
◎ Positions held and today’s strategy
EUR/USD Short remains held. Stop set at ”1.1450”.
If it resumes dropping, I would like to add more positions.
EUR/USD Daily chart
EUR/USD Hourly chart
CAD/JPY Long entered last Friday.
Plan to hold until either September 5 or October 24 policy rate release.
Big Surprise‼ Canada CPI 3.0% announced on August 17!
CAD/JPY Daily chart
CAD/JPY Weekly chart
USD/JPY watch for risk factors.
If risk-off, yen strengthens!
If risk-on, yen weakens!
However, both scenarios are unlikely to move much.
Expect trading to remain in a narrow range..
USD/JPY Hourly chart
1) Headlines related to US-China tariff/trade war
Note: some reports mention a summit; if realized, expectations for resolution rise and risk-on.
2) Renminbi weakness against the USD
Renminbi has fallen to new lows.
Watch Renminbi price closely.
USD/Renminbi Weekly chart
3) Turkey situation
If Turkey shocks calm down, risk-on.
4) Other headlines
Especially Trump tweets.
Brexit talks have resumed since last week, so headlines on negotiations are in focus
Today is the start of the week, so I plan to stay cautious and observe.
◎ Weekend Key Speakers
Lowe - Reserve Bank of Australia (RBA) Governor
“Australian economy is moving in the right direction”
“Next move likely to be a rate hike, not a cut”
“Keep the cash rate on hold for now”
“A weaker Australian dollar will help”
“A somewhat softer decline could help”
“I believe Turkey will overcome its economic difficulties”
“China hopes to resolve disputes through dialogue”
“China supports cooperation between Chinese and Turkish companies based on market rules”
German Finance Ministry
“No discussion of IMF support during a telephone with Turkey’s finance minister”
Turkish Central Bank
“CPI expected 16.45% at end-2018 (previous survey: 13.88%)”
“Dollar/Turkish Lira expected at 5.9663 by the wait period in 2018 (previous survey: 4.8328)”
“2018 GDP growth forecast 3.9% (previous survey: 4.2%)”
Hasan Seba (CEA) Chair
“Positive signs expected from next week's talks with China”
“Progress in EU-Mexico trade negotiations”
