ForexLive Asia-Pacific FX news wrap: Subdued ranges heading into the US market

• Barclays slashed their Brent Crude oil price forecast by $8 a barrel
• WSJ survey of economists indicates that the probability of a US recession is down sharply
• Household spending in Australia, December, -3.1% m/m (prior +1.8%)
• Reports Qatar appears to have stopped sending LNG tankers through Bab el-Mandeb Strait
• JP Morgan’s CEO Dimon warns inflation may be stickier, rates higher, than markets expect
• Oil – Houthis fired an anti-ship cruise missile at a US Navy ship
• Mr. JGB: Japan’s stable inflation target achievable in 2024, but not in the way BOJ thinks
• People’s Bank of China left its MLF rate unchanged – recap
• Schumer says US congressional leaders have agree to a stopgap funding measure
• People’s Bank of China set MLF rate at 2.5% (prior 2.5%)
• Japan’s 2 year yield has dropped back under zero, first time since July 2023
• PBOC sets USD/ CNY reference rate for today at 7.1084 (vs. estimate at 7.1684)
• Australian private survey of inflation soared by 1% m/m in December, the most in 17 months
• Taiwan’s Presidential election: Pro-sovereignty DPP’s William Lai wins
• People’s Bank of China interest rate cut expected today
• UBS targets higher for the S&P 500, sees strong earnings, strong economy
• Six arrested in plot to shut down the London Stock Exchange
• Barclays moved its forecast for the first Federal Reserve rate cut to March (from June)
• Weekend: ECB chief economist Philip Lane nominates June ‘key data’ for rate cuts
• Weekend: Ex-PBoC official says China’s property downturn may continue for two more years
• Trade ideas thread – Monday, 15 January, insightful charts, technical analysis, ideas
• Monday morning open levels – indicative forex prices – 15 January 2024
• Weekly Market Outlook (15-19 January)
• Why the bitcoin ETF inflows are a huge disappointment

It
was a day of light market news flow only, although there were some
potentially significant items for energy markets:

• there
  are reports that Qatar has stopped its shipments of LNG through the
  Bab el-Mandeb Strait (and thus the Suez Canal)
• Houthis
  fired a cruise missile at a US Navy ship

If
you take a glance at the oil price its up, but barely noticeable.

In
political news we had

• the
  Saturday election in Taiwan saw William Lai, of the pro-sovereignty
  Democratic Progressive Party (DPP), elected President, although the
  party did lose its parliamentary majority
• US
  Senate Democratic leader Schumer said congressional leaders have
  agreed to a stopgap funding measure

In
central bank developments, the People’s Bank of China set the rate
on this month’s Medium-term Lending Facility (MLF) at an unchanged
rate of 2.5% despite wide (but not unanimous) expectations of a 10bp
cut. This despite continued disinflation in China and is reflective
of the concern the PBoC have of yuan weakness prompting capital
outflow.

USD/JPY
rose on the session, the drop in 2-year Japanese Government Bond
yields back below zero weighed on the yen.

It was a mixed bag
across the major currencies. The USD was net weaker against the EUR,
GBP and CAD. AUD and NZD underperformed.

Offshore
yuan is higher on the session.