ICYMI – OPEC+ agreed to boost production, but they can't
RBA Statement on Monetary Policy says further rate increases are needed
PBOC sets USD/ CNY reference rate for today at 6.6332 (vs. estimate at 6.6402)
Friday is US nonfarm payroll day – Goldman Sachs preview
RBA Statement on Monetary Policy due Friday 06 May 2022 at 0130 GMT
Updated NZD/USD view – to spend time under 0.64 in the month ahead, higher in H2 (0.70+)
Tokyo area CPI excluding food and energy has surged
Biden admin to buy 60 million barrels of crude oil – beginning replenishment of SPR
Goldman Sachs is looking for EUR/CHF back below parity ahead
Australia – AiG Services PMI for April: 57.8 (prior 56.2)
Chile's central bank raises its benchmark interest rate by 125bps
U.S. officials: Intelligence shared by the US helped Ukraine sink Russian cruiser Moskva
Stagflation in 3, 2, 1 … At least the Bank of England is clear-eyed about it.
Trade ideas thread – Friday 06 May 2022
Truth bomb time. Ex-Fed Reserve Vice Chair Clarida says rates must rise to at least 3.5%
US major indices take it on the chin
Forexlive Americas FX news wrap: Sink-o De Mayo as stocks wrecked
The lead in to Asia was a stronger US dollar and (much) weaker US equity markets.
Asia FX was more subdued, but USD/JPY did make a higher high than it had seen on Thursday (US time), above 130.75. Movement for the other majors was not as much, EUR, GBP, AUD, NZD, CAD, CHF all dipped a little lower against the US dollar.
On the news front there was little to note.
Data was more interesting, specifically Japanese inflation data. Today we had the April figures for Tokyo inflation (nationwide numbers for April will follow in 3 weeks, the Tokyo data serves as an early guide to these). Headline CPI rose at its fastest in nearly thirty years. The more important underlying rate of inflation (core inflation) saw CPI excluding fresh food and energy record a rise also. Eyes will be on the nationwide data ahead to see if the Tokyo numbers are reflected more widely, and also further out to see if core inflation can reach the BOJ’s 2% target and be sustained there.
On the central bank front, we had the Reserve Bank of Australia release its quarterly Statement on Monetary Policy. Inflation forecasts were ramped significantly higher while those for GDP were cut. For the AUD the impact was not great. AUD/USD has dribbled lower as have other majors vs. the USD and the expectation of further rate rises ahead from the RBA is well accepted.
RBA core CPI forecasts – we could be above the top of the target band for quite some time to come: