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On September 8th, Pepperstones Chris Weston wrote that the departure of Japanese Prime Minister Shigeru Ishiba has shifted the focus to his successor and what this might mean for political stability. Markets will weigh the extent of additional fiscal measures and budgets under the new leadership. "The extent of fiscal stimulus will be crucial to controlling the rise in long-term Japanese government bonds," he said. These developments could be seen as further justification for delaying the Bank of Japans next 25 basis point rate hike until 2026. This expectation is already priced into the market, with swap traders anticipating only a 12 basis point rate hike by December. Weston noted this as another reason why few are currently willing to hold the yen. He expects yen weakness in Asian markets to become widespread.Some Hong Kong stocks with new consumption concepts fell, with Pop Mart (09992.HK) falling more than 6%, BRUCO (00325.HK) falling more than 3%, and Cha Baidao (02555.HK) following suit.The Hang Seng Index in Hong Kong opened at 25,440.01 points on Monday, September 8, up 22.03 points, or 0.09%. The Hang Seng Tech Index in Hong Kong opened at 5,693.99 points on Monday, up 6.54 points, or 0.11%. The CSI 300 Index opened at 9,059.22 points on Monday, up 2.0 points, or 0.02%. The H-share Index opened at 4,260.37 points on Monday, down 7.9 points, or 0.19%.Hang Seng Index futures opened down 0.10% at 25,374 points, 38 points below the spot price.Goldman Sachs said OPEC+s decision to begin phasing out its 1.65 million bpd production cuts likely primarily reflected still-low OECD commercial inventories.

As Australia's finance minister forecasts economic troubles, the AUD/USD pair declines toward 0.69

Daniel Rogers

Jun 27, 2022 14:48

 截屏2022-06-27 上午10.24.35.png

 

Since Friday's temporary reversal of a two-week slide in the AUD/USD pair, the pair has retraced to 0.6910. Despite reversing the previous day's gains during Monday's Asian session, the AUD/USD pair reflects Australia's and the world economy's economic concerns.

 

According to AAP Australian General News, Australian Finance Minister (FinMin) Katy Gallagher misspoke over the weekend when she stated that Australia is facing economic problems. According to Reuters, the remarks follow warnings that the global economy faces stagflation, a combination of sluggish growth and high inflation.

 

Over the weekend, Australia's Treasurer Jim Chalmers expressed concern over rising inflation, although expecting a rate of 7% and agreeing with a central bank projection.

 

Philip Lowe, governor of the Reserve Bank of Australia, remarked on Friday, according to Reuters, that he does not foresee a recession in Australia, but that there is a restricted path back to low inflation.

 

Notably, Reuters noted that the Bank for International Settlements (BIS) has recommended for "rapid and forceful" interest rate hikes to avoid the inflationary increase from becoming much more severe.

 

The managing director of the International Monetary Fund (IMF), Kristalina Georgieva, erred over the weekend when she declared, "Further negative shocks will likely make the US economic situation'more challenging'." Notable is the IMF's downward adjustment of the US GDP forecasts for 2022 from 3.7 percent to 2.9 percent.

 

US New Home Sales for May, by 10.7 percent compared to April's revised numbers of -12.0 percent, together with the record low print of the University of Michigan's Consumer Sentiment Index for June, to 50.0 from 50.2 early estimates, impacted severely on the US dollar.

 

S&P 500 Futures fail to track Wall Street's gains, slipping 0.30 percent intraday at the latest, as 10-year US Treasury rates increase 1.5 basis points (bps) to about 3.13 percent following their first weekly decline in four weeks.

 

US Durable Goods Orders for May, expected to be 0.1 percent compared to 0.5 percent before, and Pending Home Sales, expected to be -2.0 percent compared to -3.9 percent previously, will be essential for daily direction moving ahead. Nonetheless, Wednesday's meeting with central bankers from the United States, the United Kingdom, and Europe at the ECB Forum on Central Banking will be a crucial event to track for observable market developments.

Technical Evaluation

Although a rising trend line from May 12 caps the downside around 0.6885, the AUD/USD pair's decline from its 10-day moving average of 0.6945 maintains bearish sentiment intact.

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