International Financial News
· [Federal NeelKashkari: The current economic release signal is confusion, the economic recession is not a basic situation, but the risk has risen to a considerable extent, the Fed may need to provide more policy support for the economy, we may need to make concessions on interest rates]
· [Cleveland Fed President Mester: I originally insisted that the FOMC should not move at the July monetary policy meeting, but the interest rate cut is "highly loud" and I have to give up.] The US economic risk is on the downside. The question is whether to cut interest rates or keep interest rates stable, and it is difficult to see signs of strong economic growth from US Treasury yields.
· [US oil drilling machine first increased since June] US oil service Baker Hughes Weekly: In the week of August 16, the US oil drilling rig increased by 6 to 770 units, down by 99 units in the same period of 2018; US natural gas drilling machine The number dropped from 4 to 165; the total drilling rig increased by 1 to 935.
· The US Treasury will re-launch the potential 50-100 year long-term US Treasury bond in the market and seek a deeper understanding of the long-end market. After the US stock market closed, the 30-year US bond yields soared more than 4 basis points.
Summary of investment bank views
v Danske Bank: USD/JPY and EUR/USD are expected to fall to 105 and 1.10 respectively.
Danske analysts said that due to the continuous low of global bond yields and the pressure on commodity prices, the downside risk of USD/JPY is still relatively high, and it is expected to test the 105 line again soon. The dovish remarks of European Central Bank officials on Thursday caused the euro to fall below the 1.11 mark against the dollar, even though the euro has shown a rare resilience this week. We believe that the euro is expected to test the 1.10 mark against the US dollar in the short term, but if the Fed can accelerate interest rate cuts, the euro will rise slightly against the US dollar in six to twelve months.
v Goldman Sachs: insist on doing more yen before the Jackson Hole central bank meeting.
Zach Pandl, co-head of Goldman Sachs' Global Forex and Emerging Markets Strategy, said he would insist on doing long on yen, euro and Canadian dollar ahead of next week's central bank governor Jackson Hall seminar because of the uncertain outlook for the Fed and increased trade tensions. The yen provides an attractive risk return.
Pandl’s research report released on Friday said that if Fed Chairman Powell and other officials “had hinted that there will still be a large easing policy,” the narrowing of the spread should push the dollar against the yen. Otherwise, any emphasis on “still good domestic growth data” and a cautious attitude towards “deep interest rate cuts” will result in risk assets not performing as safe-haven assets as the yen.
v UOB: Recently, GBP/USD is expected to consolidate at 1.2035-1.2130.
Contrary to our expected decline to 1.2025, the pound against the US dollar rebounded sharply yesterday, and then retreated most of the gains. This trend indicates that investors who are long on the pound have not yet regained control. The currency pair is currently expected to be consolidated within the 1.2035-1.2130 range. In the next 1-3 weeks, if the pound falls below 1.2110, it is expected to fall further. If it falls below 1.1985, the more important support will be the October 2016 “lightning plunge” low of 1.1491. In short, although the pound is oversold, the current weakness has not shown signs of stabilizing. Only a breakthrough of the key resistance level of 1.2195 indicates that the currency pair has eased.
v ANZ Bank: New Zealand dollar against the US dollar in the short-term trend, but will still fall to the low of 0.61 at the end of the year.
ANZ released an analysis on Friday that the New Zealand dollar is trading in a short-term trend against the US dollar, but remains bearish in the medium term, and is expected to fall to a low of 0.61 at the end of the year. Like the Australian dollar, the New Zealand dollar continues to be subject to risk sentiment. New Zealand domestic data may be difficult to support the New Zealand dollar. Considering that the global situation is more severe in the medium term, we still believe that the New Zealand dollar fell below the fair value of 0.62 in 2019.
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