Attention events and highlights on August 22!!
8/22 (Wednesday)
Turkish market holiday(Eid al-Adha)
U.S.-China deputy-level trade talks
12:10 AUDDebelle, RBA Deputy Governor remarks
21:30 CADRetail sales
23:30 USD Crude oil inventories
Turkish market holiday(Eid al-Adha)
U.S.-China deputy-level trade talks
Kansas City Fed hosted Jackson Hole symposium
U.S.-China ($16 billion) additional tariffs planned
03:00 USDFOMC minutes (August 1)
Today’s economic indicators and events are all important.
1）Resumption of U.S.-China trade talks(deputy-level)
“This week’sdon’t expect much from China in the trade talks”
“There is no deadline to settle the trade frictions with China”
It seems progress is hard to expect soon.
Key point might bethe yuan’s depreciationI think.
China has countered the yuan depreciation, but the content lacks credibility!
“The yuan rate is mainly determined by market supply and demand”
“Do not use the yuan as a weapon in trade frictions”
“The flexibility of the yuan and market-driven moves are rising”
“China’s economic fundamentals are solid, and the yuan can be stabilized at a reasonable level”
The remarks are repetitive of the usual content.
Since remarks have been exchanging since the day before negotiations, pay attention to headlines until the 23rd during the talks period.
Also,this trade talks are deputy-level, not leaders; therefore, tomorrow’s additional tariffs are unlikely to be avoidedI think.
USD/JPY
2) FOMC minutes release
Yesterday’s remarks by Atlanta Fed President Bostic: “one more rate hike this year”
Awaiting the minutes’ contents.
3) Michael Cohen, former Trump lawyer, under judicial bargain
Trump’s personal attorney,Michael Cohen, enters into a judicial bargain.
“He violated election laws under the directive of a candidate”
Thereafter,former campaign chief Manafort convicted. Information as well!
Dow, Nikkei, and USD/JPY plunge sharply.
For President Trump, a tough headline before the midterms.
USD/JPY 5-minute chart
Dow average 5-minute chart
Nikkei 5-minute chart
◎ Positions held and today’s strategy
CAD/JPY daily chart
CAD/JPY hourly chart
Long CAD/JPY currently held.
Rumblings ofrate hikes heard here and there.
If pricing in rate hikes, picture the blue dotted line on the daily chart.
However, it hasn’t risen much, so we are watching closely.
Canada’s retail sales will be released today as well.
Hope it provides motivation.
GBP/USD daily chart
GBP/USD hourly chart
Yesterday’spositive headlines for Brexit negotiationsemerged.
Personally, I think it will rebound, sois considered.
USD/JPY daily chart
USD/JPY hourly chart
Dollar-yen remains range-bound.
My view suggests more downside pressure.
August sees U.S. debt repayment and interest payments, likely to push dollar lower.
Trump risk.
One more rate hike chance this year.
These are the negative factors standing out.
However,the downside is limited; a break below 110 could attract buyers, with a lower target around 109.
Jackson Hole symposium is also coming, so extreme moves seem unlikely.
EUR/USD daily chart
Dollar selling also had an effect,but euro rebounded from shrinking Italian-German long-term yield differentials.
Reason: September Italian rating was postponed to October,which led to a drop in Italian government bond yields.I think.
However, beyond that, Brexit negotiations have news only about agreement by October.
So risk was postponed, and for euro, the sell strategy remains unchanged.
I thought it would bounce at the green circle, but with dollar selling influence, another step up is possible.
When it comes backI would consider entering short if it breaks below “1.1500” again.
◎ Today’s checks
Aug 21 Major eight currencies strength graph
U.S. 10-year yield chart
Japan 10-year yield chart
Germany 10-year yield chart
Italy 10-year yield chart
Greece 10-year yield chart
Turkey 10-year yield chart
◎ Yesterday’s notable statements
President Trump
“We will not concede to Turkey regarding the pastor”
“Possible consideration of lifting sanctions on Russia”
Low and Reserve Bank of Australia Governor
“Next move will likely be a rate hike, not a cut”
Chinese central bank official
“Yuan is determined mainly by market supply and demand”
“Will not use yuan as a weapon in trade frictions”
“Yuan flexibility and market-led moves are rising”
“China’s economic fundamentals are solid, and it is possible to keep yuan at a reasonable and stable level”
Fox’s international trade minister
“EU risks harming its global standing if Brexit negotiations mishandled”
Rosen, U.S. Commerce Secretary
“Some investigations into automotive tariffs may be delayed or postponed”
Barnier, EU chief negotiator for Brexit
“Brexit talks are in their final stage”
“Negotiations will continue from here”
Brexit minister in UK, Raab
“Positive discussions with Barnier; agreement next week”
“I’m confident an agreement can be reached in October”
“There are still major challenges to overcome”
Kaplan, Dallas Fed President
“The Fed should raise rates gradually toward a neutral rate”
“Watch global financial markets and economy closely”
“Carefully monitor U.S. bond yields”
Michael Cohen, former Trump legal adviser
“He violated election laws under the instruction of a candidate”
