- Federal Reserve speakers Monday include Bostic, Barr, Waller and Jefferson.
- Iranian state media has confirmed there were no survivors in the helicopter crash.
- Saudi crown prince postpones trip to Japan
- ICYMI – China’s benchmark lending rates remained stable: 1-year LPR at 3.45%, 5-year LPR at 3.95%
- People’s Bank of China sets USD/CNY pivot rate at 7.1042 (vs. estimate of 7.2162)
- China sets 1- and 5-year LPR rates unchanged, as expected
- Bank of England Deputy Governor Ben Broadbent will speak on Monday.
- PIMCO believes the next move from the Federal Reserve and RBA will more likely be a cut than a hike
- Weak consumption in Japan could further push the BoJ to raise interest rates and slow the fall of the yen
- Oil – Morgan Stanley expects above-normal demand growth
- New Zealand RBNZ Shadow Monetary Policy Board recommends holding cash rate this week
- UBS expects the Federal Reserve to cut rates later this year – here’s why
- Strong Evidence Suggests Significant China FX Intervention in April to Support CNY (Yuan)
- Helicopter carrying Iranian President Ebrahim Raisi and other leaders goes missing
- Trade Ideas Thread – Monday May 20, Insightful Charts, Technical Analysis, Ideas
- Monday morning open levels – indicative forex prices – May 20, 2024
- Federal Reserve Chairman Powell’s speech on Sunday – no comments on monetary policy or the economy
- Weekly Market Outlook (May 20-24)
- Join us in Johannesburg, South Africa this week
- Forexlive Americas FX news ends on May 17. DXY Index price closes below its 100W MA
The week opened with a speech on Sunday (US time) by Federal Reserve Chairman Powell. It was a law school commencement speech, which Powell delivered remotely via video while contracting Covid late last week. Powell made no comments on the economy or politics.
The data flow was barely existent.
However, we had the Loan Prime Rate (LPR) parameters from the People’s Bank of China. LPRs play a vital role in determining loan and mortgage interest rates in China. The PBoC left the 1- and 5-year rates unchanged, as expected, at 3.45% and 3.95% respectively. The last time the 1-year rate was cut was in August last year, while the 5-year rate was cut in February this year. The People’s Bank of China is expected to continue to further ease monetary policy. One compelling reason is that Chinese banks will need more cash to buy government bonds, including the issuance of special ultra-long-term Treasury bonds that began last Friday – these bonds raise cash at purposes of building the economy (stimulus).
On the information front, a helicopter carrying Iranian President Ebrahim Raisi and Iranian Foreign Minister Hossein Amir-Abdollahian crashed in a mountainous area in Iran’s northwest East Azerbaijan region from Tehran and on the border with Azerbaijan. It took several hours to find the downed helicopter, and when found it was simply broken, burned wreckage. No one on board survived.
This potentially has implications for the price of oil. Although there is no suggestion, at least, of foul play, if this material were to surface and the blame was perhaps placed on the United States or Israel, it would constitute an escalation of a situation already tense in the Middle East. Which would, at the margin, be favorable to oil.
Separately, Saudi King Salman bin Abdulaziz will undergo a treatment program at Al Salam Palace in Jeddah for lung inflammation. Saudi Arabia’s Crown Prince Mohammed bin Salman was expected in Japan from May 20 to 23. He postponed his trip. He was to meet Prime Minister Fumio Kishida.
The price of oil increased today with the exit of these two products from the Middle East.
Gold, silver and copper surged. Gold at a record high.
USD/JPY rose towards 156.00 and fell again from there. Major FX was mostly limited to small ranges only.
Brent oil, small opening gap to start the week:
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