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Real-time News
May 21 – A survey released on Thursday showed that UK factory orders saw their biggest drop since September 2020 this month, while sales price expectations also rose sharply. This situation highlights the predicament facing the Bank of England. Data from the Confederation of British Industry (CBI) showed that the UK industrial orders balance in May was -41, the lowest since September 2020; while the industrial price expectations balance was 38, the highest since February 2023. Cameron Martin, senior economist at the CBI, said that in an increasingly uncertain global environment, the Middle East conflict is causing energy costs to rise and triggering further supply chain disruptions, posing new challenges to manufacturers already facing weak demand. The Bank of England is currently closely monitoring the situation to determine whether it needs to raise interest rates to eliminate inflationary pressures caused by the energy price shock triggered by the war with Iran, or whether the decline in demand means that any rise in the overall inflation rate is only temporary.The UKs CBI industrial orders balance fell to -41 in May, the lowest level since September 2020. Meanwhile, the UKs CBI industrial price expectations balance rose to 38 in May, the highest level since February 2023.The UKs CBI industrial price expectations balance for May was 38, compared to 32 in the previous month.The UKs May CBI industrial orders balance was -41, compared to an expected -40 and a previous reading of -38.Iranian Foreign Minister Araqchi: If it is necessary for us to be present in the fields of diplomacy, dialogue and negotiation for the benefit of the regime, we will be there with the same strength as the armed forces are in defending the country.

Prior to the release of Australian employment data, the AUD/JPY pair attempts to regain 89.00

Alina Haynes

Apr 12, 2023 13:44

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The AUD/JPY pair attempts to reclaim the critical resistance level of 89.00 during the Asian session. Kazuo Ueda, the governor of the Bank of Japan (BoJ), has advocated for an extension of the already decade-long ultra-loose monetary policy in order to consistently achieve an inflation rate above 2%.

 

The decelerating Producer Price Index (PPI) contradicts the optimistic outlook of the Japanese government regarding wage growth. As expected by market participants, the March PPI did not change. The annual PPI came in at 7.2%, which was higher than the consensus estimate of 7.1% but lower than the previous release of 8.1%. The inability of companies to sustain accelerating production rates at factory gates is indicative of weak household demand.

 

Analysts at Commerzbank anticipate that the Japanese Yen will only appreciate over the long term if the current monetary policy is abandoned quickly.

 

Regarding the Bank of Japan's (BoJ) Yield Curve Control (YCC), the IMF has stated that allowing more flexibility in YCC could have repercussions for global markets, but it could also prevent future policy shifts that could result in significant spillovers.

 

Investors are awaiting the March Employment Report for fresh impetus in the Australian Dollar. The market expects the Australian economy to add 20,000 employment, which is less than the previous estimate of 64.6K. While the Unemployment Rate is expected to rise to 3.6% from 3.5% in February, it is anticipated that the Unemployment Rate will increase to 3.6%.

 

Governor Philip Lowe of the Reserve Bank of Australia (RBA) has left the door open for additional rate hikes if Australian inflation persists, so the publication of stronger-than-expected employment gains could reignite fears of additional rate hikes.

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