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  • richard evans

Ueda's first BoJ rate meeting due in the early hours of tomorrow morning

Good morning

It was generally quiet yesterday, a bout of USD weakness yesterday afternoon offered some excitement but it was short-lived and as I type GBPUSD is 1.2465, EURUSD 1.1050, each within a few points of where they were this time yesterday. We haven’t had much in the way of data recently but today we have US GDP which shouldn’t signal an imminent recession even though this is a concern for the coming months.

Still talk from ECB officials about more rate rises to come, while on the other side of the pond we obviously hear nothing given the Fed blackout period ahead of their rate meeting next week. There is a lot of talk about the US debt limits, I’ve not really mentioned these as I have seen similar issues come and go and there is generally a last minute agreement to settle things down.

BoJ rate meeting tonight. No policy changes expected with as it is Ueda’s first there is a lot of excitement building. Ueda has spoken a lot this week and it is unlikely he will say anything at this meeting that is too far from previous comments. Some change of wording in the statement might be seen with some thinking they will remove references to Covid. Yen a touch stronger, USDJPY now 133.75, GBPJPY 166.70, EURJPY 147.80.

For Turkish Lira followers, CBRT will be announcing their latest rates at around midday. No rate change from the current 8.5% is expected. There is an election in Turkey in a month or so, I’m not sure it will be particularly democratic as I presume Erdogan will win comfortably. Perhaps I am mistaken. USDTRY now 19.43, EURTRY 21.47.

I mentioned the eventual move away from US dollar as the reserve currency. I read today that Argentina will start paying for Chinese imports in Yuan rather than USD. This is supposed to help Argentina retain much needed USD reserves but possibly a trend that could be followed by others.

Ukriane’s Zelensky spoke with China’s Xi yesterday, the first time they have done so since the Russian invasion. I’m not sure what really came of this but I am a believer that its good to talk. We don’t really want China arming Russia, although I’m sure China’s peace proposal won’t sit well with Ukraine as I presume it demands Ukraine give up the East and South East areas to Russia.

Man City beat Asrenal yesterday to take control of the Premier league title race. Spurs are playing Man Utd tonight, we’ll be hoping for a vast improvement over the performance against Newcastle Ut. It was so bad the players have refunded travelling fans money. Not sure what will happen if Spurs lose by a similar margin this evening. The players can afford it I guess. Free football for everyone!

Running a tad late now, I did my good deed and took the kids to school. Traffic on the way was excellent with many teachers on strike, so many pupils not at school. However an emergency road closure on the way home meant I had to park the car and walk home. No good deed goes unpunished and all that….

- 10.00 EU consumer confidence

- 13.30 US GDP, core PCE, initial jobless claims

- 15.00 US pending home sales

- 00.30 Japan unemployment, Tokyo CPI

- 00.50 Japan industrial production, retail trade

- 03.00 BoJ rate announcement

- 04.00 BoJ press conference

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