Mid-Day Report: Yen Volatility to Remain in Focus after Markets Digest Mixed US Data
Markets are overwhelmed by the sharp reversal in Japanese yen today and it remains the main theme in early US session. USD/JPY dropped from intraday high of 85.89 and reaches as low as 84.54 so far, a 135 pts swing after BoJ emergency announcement. Mixed data from provides little inspiration to markets and selling in yen crosses somewhat stabilizes a bit. Though, development in risk sentiments in US session would probably trigger another round of yen crosses in general.
US personal spending rose more than expected by 0.4% in July but income lagged behind by rising 0.2% only. PCE core was steady at 1.5% yoy while headline PCE climbed slightly to 1.5%. Canada current account deficit widened to CAD -11b in Q2. IPPI and RMPI rose 0.1% mom and 1.8% yoy respectively in July. Eurozone confidence indicators generally showed improvements in August. New Zealand reported first trade deficit in 7 months at NZD -186m in July.