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On April 10th, Thai Finance Minister Ekniti Nitithanprapas stated that due to the Middle East conflict, Thailand expects oil prices to remain high for up to two years, foreshadowing sustained pressure on this net energy importer already grappling with rising costs and slowing growth. Speaking to lawmakers during a parliamentary debate following a government policy statement, Ekniti noted that energy infrastructure in the Middle East has been severely damaged, and oil and gas supplies could take one to two years to stabilize. He added that the government plans to accelerate the adoption of solar, biofuels, and other renewable energy sources to cushion the impact of high energy costs on households and businesses. The energy shock has already affected the economic outlook. Economists have begun to lower their growth forecasts for Thailand as rising fuel costs have dampened consumption and disrupted exports and tourism—two core drivers of the Thai economy.On April 10th, according to the National Cybersecurity Notification Center, the center detected a recent surge in supply chain poisoning attacks. Targets included the API development tool Apifox, the Python library LiteLLM, and the JavaScript HTTP library Axios, involving two core supply chain scenarios: open-source software repositories and commercial tools. The Axios poisoning incident, in particular, occurred because many AI applications and plugins, such as OpenClaw, directly rely on this library, allowing the risk to spread further to end users through the dependency chain. These three supply chain poisoning incidents share common characteristics: high stealth, wide impact, high severity, and rapid spread, potentially causing serious harm such as credential theft, remote code execution, and sensitive data leakage.On the morning of April 10, Xi Jinping, General Secretary of the CPC Central Committee, met with Cheng Li-wen, Chairperson of the Kuomintang, in Beijing.Hong Kong-listed apparel stocks continued their upward trend, with Fast Retailing (06288.HK) rising nearly 10%, Tianji Holdings (01520.HK) rising over 6%, and Anta Sports (02020.HK) and Bosideng (03998.HK) following suit.On April 10th, Wang Zhihua, Director-General of the Department of Foreign Trade of the Ministry of Commerce, stated that since the beginning of this year, foreign trade enterprises have actively expanded markets, secured orders, pursued innovation, and built brands, adding more resilience and vitality to Chinas foreign trade. According to customs statistics, in the first two months of this year, both the scale and growth rate of Chinas goods trade imports and exports were at relatively high levels compared to the same period in previous years, and a good start is expected for the first quarter as well.

USD/JPY Rate Reversal Takes Shape Ahead of 50- Day SMA

Cory Russell

Jun 02, 2022 18:16

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TALKING POINTS FOR THE JAPANESE YEN

As it carves a sequence of higher highs and lows ahead of the 50-Day SMA (127.03), the USD/JPY looks to have reversed, and the exchange rate may follow the upward slope in the moving average as it clears last week's range bound price action.

RATE REVERSAL IN THE USD/JPY TAKES FORM AHEAD OF THE 50-DAY SMA

Following an unexpected jump in the US ISM Manufacturing survey, the USD/JPY has risen to a new weekly high (130.19), with the exchange rate gaining over 2.5 percent since the start of the week, as it seems to be tracking the rise in US Treasury rates.


The improvement in the ISM survey should keep the Federal Reserve on track to raise interest rates because it indicates a healthy economy, and Governor Christopher Waller's recent remarks suggest the central bank will shift gears again in 2022, as the permanent voting member of the Federal Open Market Committee (FOMC) favors "tightening policy by another 50 basis points for several meetings."


While speaking at an event hosted by the Institute for Monetary and Financial Stability, Governor Waller expressed his support for keeping "the policy rate at a level above neutral" as the central bank struggles to control inflation, adding that "the strong labor market can handle higher rates without a significant increase in unemployment" (IMFS).


As a result, the upcoming update to the US Non-Farm Payrolls (NFP) report, which is expected to add 325K jobs in May, may fuel speculation for another 50bp rate hike, and it remains to be seen if Chairman Jerome Powell and Co. will forecast a steeper path for the Fed Fund rate at the next interest rate decision on June 15, when the central bank is set to release the updated Summary of Economic Projections (SEP).


Until then, the differing trajectories of the FOMC and the Bank of Japan (BoJ) may keep USD/JPY afloat, but the retail sentiment tilt is certain to endure as traders have been net-short the pair for the most of 2022.


According to the IG Client Sentiment report, 31.51 percent of traders are presently net-long USD/JPY, with a short-to-long ratio of 2.17 to 1.


The number of traders who are net-long is up 0.16 percent from yesterday and up 23.49 percent from last week, while those who are net-short is up 4.70 percent from yesterday and down 4.98 percent from last week. The increase in net-long positions comes as the USD/JPY makes a series of higher highs and lows, while a drop in net-short interest has helped to relieve congestion, with just 26.83 percent of traders net-long the pair last month.


As a result of the increase in US rates, USD/JPY may continue to climb ahead of the NFP data, and the exchange currency may continue to follow the positive slope of the 50-Day SMA (127.19) as it approaches the moving average.



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