ForexLive Asia-Pacific FX news wrap: USD added a little to its gains

• China’s senior party official says China’s economic recovery is not strong enough
• Japan PM Kishida says need to be cautious about effect of rising prices due to weak yen
• Japan finance minister Suzuki scolds government minister speaking about markets
• China says it will encourage the development and expansion of private economy
• Japan private sector economic council members say cant overlook weak yen negative effects
• Japan government minister Kono says he is not directly requesting the BOJ raise rates now
• Wall Street Journal: “Top Democrats reportedly prepare for a campaign without Biden”
• Here’s a forecast for a Bank of Japan rate hike this month
• PBOC sets USD/ CNY reference rate for today at 7.1315 (vs. estimate at 7.2706)
• New reports that Biden campaign is calling an all-staff meeting on Friday
• Explosion reported in Tel Aviv – cause is unclear – looks to be near US consulate
• BNP Paribas target 1.06 for EUR/USD
• Japan data – June CPI Headline 2.8% y/y (vs. 2.9% expected)
• Westpac eyeing Australia expected to follow the same broad disinflation trend as peers
• UK consumer confidence in July hits its highest in nearly 3 years
• Fed’s Daly sees inflation data improving, but says not at target yet
• JP Morgan says they do not expect a Bank of Japan rate hike in July, or at all in 2024
• NYT: Biden has begun to accept that he may not win in Nov, may have to drop out
• Macquarie warns on populist US economic policies fuelling inflation, shallow Fed rate cuts
• UBS boost their end year S&P 500 target to 5900
• Forexlive Americas FX news wrap: ECB holds rates, the dollar perks up
• Unnamed source – Biden doing ‘soul searching’ amid calls to exit 2024 presidential race
• US equities struggle again but finish off the lows
• Trade ideas thread – Friday, 19 July, insightful charts, technical analysis, ideas

In
between the deluge of US political news and views we had a few items
worth noting here in the Asian timezone.

Federal
Reserve Bank of San Francisco President Mary Daly spoke, sounding a
little less dovish than her FOMC colleagues have recently. Daly said
“we’re not there yet” on price stability and the inflation
target.

• That
  the Federal Open Market Committee (FOMC) needs to “balance the
  costs of acting fast and being wrong”
• That
  she is not yet convinced it’s a “green light” for a
  September interest rate cut

Next
up was Japanese inflation data for June

• the
  ‘core-core’ rate of inflation in May (core-core is that excluding
  food and energy, it’s the closest to the US measure of core
  inflation) inched up on the month.

The
other two measures came in just above the May figures and all well
above the BoJ 2% target. I posted early in the session a reminder
that the Bank of Japan is dissatisfied with the nature of the
inflation in Japan. Higher inflation, says the BoJ, is mainly due to
‘cost-push’ inflation pressure from rising input prices and the weak
yen. The BoJ want ‘demand-pull’ inflation from consumers increasing
spending after wage rises. Japanese
Prime Minister Kishida popped up in the news later in the session
alluding to this, saying the government must be vigilant about the
impact of rising prices, driven in part by the weak yen, on the economy moving to
achieve domestic-demand driven recovery. It’s a difficult time for
Japanese authorities. They’d like to keep progressing towards policy
normalisation but tightening monetary policy risks endangering the
precarious economic recovery.

From
China today we had a news conference on the Third Plenum outcome,
Chinese Communist Party officals made positive comments about
economic reform but details were extremely thin. We’ll get more on
these in the weeks and months ahead I suspect.

There
was news out of Tel Aviv, Israel, where an explosion occurred due to
a drone attack. A person was killed and others injured.

Major
FX traded in small ranges only, characterised by a USD inching
higher. Gold fell. Oil fell but has recovered.

Gold:

This article was written by Eamonn Sheridan at www.forexlive.com.