Markets are looking ahead this week to Jackson Hole for firmer clues on rate cuts. Currencies are already moving, with the US dollar weakening against the Yen, and the Aussie rising. Iron ore prices are slumping, and gold jumps over US$2,500/oz.
In our bonus deep dive interview, ANZ Head of Asia Research Khoon Goh maps out the future for Asian currencies after the unwind of the yen carry trade.
5 things to know:
Markets started the week in a cautiously optimistic mood ahead of minutes from the US Fed, ECB and RBA, as well as comments out of the Jackson Hole central banker symposium. ANZ Economist Bansi Madhavani says the direction provided this week will be important.
The US dollar has weakened dramatically against the yen to a seven-month low. ANZ’s Head of FX Research Mahjabeen Zaman says traders are watching out for comments from Bank of Japan Governor Kazuo Ueda from Jackson Hole
Iron ore prices have fallen 10 percent in the past week to a two-year low of US$97/tonne as traders give up hope the China’s authorities could re-stimulate steel demand, says ANZ Senior Commodities Strategist Daniel Hynes.
Thailand’s GDP rose slightly faster than expected in Q2, up 2.3% from a year ago. ANZ Economist Krystal Tan says activity was supported by government spending growth turning positive again, as well as strength in goods exports.
Gold surged to a fresh record high of over US$2,500 an ounce yesterday, thanks also to expectations of falling US interest rates.
Cheers
Bernard
PS: Catch you tomorrow with analysis of the RBA Board’s August meeting minutes.
