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According to the Yomiuri Shimbun, the Japanese Prime Minister plans to reshuffle his cabinet in mid-to-late September.On August 21, the Federal Reserves reverse repurchase agreement (RRP) facility, open to foreign central banks and other monetary authorities, continued to see increased usage, with the balance rising for two consecutive weeks, reflecting that overseas official institutions are continuing to increase their dollar cash reserves. As of August 19, the amount of foreign entities holding funds in the Feds reverse repurchase pool rose to $373 billion, up from $357 billion a week earlier. Since August 5, the usage of this tool has increased by approximately $56 billion, marking the largest two-week increase since October 2022. The market is closely watching changes in the foreign reverse repurchase balance for signs that Japan is rebuilding dollar liquidity after intervening in the foreign exchange market last month to support the yen.Conflict Update: 1. US military updates casualty figures for the Iranian conflict: 18 dead, 757 wounded. 2. Iranian Revolutionary Guard: Houthi forces combat capabilities surge; new war will utilize "more ruthless" weapons. 3. Houthi forces: Successfully attacked Saudi Najran airport and Saudi Aramco facilities in the area. Strait of Hormuz: 1. Negotiations between Iran and Oman on a passage mechanism in the Strait of Hormuz are nearing completion. 2. Oman and Japan emphasize the urgency of opening the Strait of Hormuz. Peace Talks: 1. US officials: The White House believes talks between Iran and Oman broke down weeks ago. 2. Qatar states that current efforts are focused on mediating relations between the US and Iran. 3. Qatar seeks to join forces with Egypt to push for a US-Iran ceasefire, calling for ensuring unimpeded navigation in the strait. Other Matters: 1. Trump announces "the toughest economic action in history" against Iran. 2. Bulgarian Defense Minister: No direct threats from Iran seen. 3. US Treasury Department: The US issues new sanctions related to Iran. 4. Iranian Ambassador: Welcomes Russias assistance in improving relations between Iran and Gulf states. 5. Israeli Defense Minister: Erdogan is dragging Turkey into a dangerous adventure in Syria. 6. Iraq: Construction of new oil export pipelines may take 2-3 years. 7. Iran: The US says Iran is "on the brink of collapse," and those seeking help know who is truly in control. 8. According to CNBC: Irans inflation rate has soared to 89%, with food prices rising by 164%. 9. US Central Command says the USS George Washington aircraft carrier has been deployed to the Middle East. 10. According to CNN: Sources reveal that the USS Abraham Lincoln aircraft carrier has begun its return voyage, but remains within the Fifth Fleets operational area. 11. Six countries, including France, Germany, and Italy, issued a joint statement opposing Israels progress on the E1 settlement project. 12. Iranian Supreme National Security Council Secretary Rezaei: Faced with economic pressure from Trump, Iran should withdraw from the Treaty on the Non-Proliferation of Nuclear Weapons. 13. Iranian Foreign Ministry: Condemns the USs new economic and trade sanctions against Iran, stating that Iran will use "all tools and capabilities" to safeguard its national interests and the legitimate rights of the Iranian people. 14. Iranian Foreign Minister Araqchi: Many of Trumps remarks are intended to divert the American publics attention from the domestic financial crisis, namely the record US debt and the sharp rise in bank interest rates. 15. UK Maritime Trade Operations Office: A report has been received of an incident 136 nautical miles east of Mukalla, Yemen. An oil tanker was approached by an unauthorized vessel while transiting the western Gulf of Aden.On August 21st, sources revealed that artificial intelligence company Anthropic is planning to bring in Citigroup as a lead underwriter for its initial public offering (IPO). If the deal goes through, Citigroup will join Morgan Stanley, Goldman Sachs, and JPMorgan Chase as lead underwriters. Anthropic may file for listing with regulators as early as the end of this month. Lead underwriter status for a large IPO not only means substantial underwriting commission income but also helps improve an investment banks ranking in the equity financing market. Citigroup currently ranks among the top IPO underwriters in the US due to its participation in SpaceXs record-breaking $86.2 billion IPO. Sources indicated that Anthropics listing preparations are still underway, and the final underwriting syndicate list may be adjusted, with the possibility of adding other investment banks.Market news: Anthropic plans to add Citigroup (CN) as the lead underwriter in its large IPO.

The USD/JPY crosses the 135.00 mark as the DXY rises ahead of US inflation

Daniel Rogers

Aug 10, 2022 11:32

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The USD/JPY pair is climbing northward during the Asian session in an attempt to retake its two-week high at 135.58. The asset's price turned positive on Monday as a result of the abundance of bids that occurred near 134.50. The USD/JPY pair's two-day consolidated activity shows that market participants are anxiously awaiting the release of the US Consumer Price Index (CPI).

 

Investors expect a decrease in price pressures this time, thus the release of the US inflation report is crucial. The investment community is aware that the crisis between Russia and Ukraine sharply increased oil prices, which continued to be essential to pressures on global costs.

 

A more than 11% drop in oil prices in July contributed to the black gold's continued sluggishness and lowered inflation expectations. The market anticipates that the inflation rate will decrease from 9.1% to 8.7%. The core CPI, which does not include food and oil, is anticipated to increase to 6.1% from the previously announced 5.9%. It appears that the demand for durable goods is rapidly increasing again. The US dollar index (DXY) is currently aiming to surpass the 106.40 immediate barrier.

 

The yen bulls are circling Tokyo as a result of Japan's government reorganization. Finance Minister Shunichi Suzuki will probably remain in the cabinet after this week's reorganization by Japanese Prime Minister Fumio Kishida. All eyes will now be on the Japanese government's efforts to raise the labor cost index, which is essential for keeping inflation over 2%.