RUSSIA: Bank of Russia Decides to Halt FX Buying Until End-2023
From August 10, 2023, until the end of 2023, the Bank of Russia decided not to purchase foreign currency on the domestic market as part of mirroring the regular operations of the Russian Ministry of Finance related to the implementation of the budget rule. The decision was made in order to reduce the volatility of financial markets.
- Deferred purchases can be made during 2024 and beyond.
- At the same time, Bank of Russia will continue to carry out transactions on the domestic market for the sale of foreign currency related to the use of funds from the National Wealth Fund for their placement in permitted financial assets in the first half of 2023, in the amount of 2.3 billion rubles per day.
- See full release here: https://www.cbr.ru/press/event/?id=16995
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
BOE: Bailey Sticks to Well Worn Messaging at Mansion House
Bailey's Mansion House speech released: "New prospects for money". Full speech here: https://www.bankofengland.co.uk/-/media/boe/files/...
Highlights:
- Above-target headline inflation with labour market tightness and demand pressure in the economy has made underlying developments in goods andservices price inflation more sticky than previously expected.
- Both price and wage increases at current rates are not consistent with the inflation target.
- Some of that tightening is still to come through the policy pipeline, and we expect underlying inflationary pressures to recede as headline inflation falls.
- But the Monetary Policy Committee is monitoring developments – in particular, those in the labour market, in wage growth and in services price inflation – to assess whether pressures are proving more persistent.
Much of Bailey's speech on bank regulation and digital currencies - relatively few mentions of interest rates and/or monetary policy outside of the above highlights. GBP/USD is on the way higher, however looks reflective of the USD softening rather than anything GBP based. Not much in it to surprise on the monetary policy front - implied peak BoE pricing has dipped about 1bp since the release, basically unch on the session (143bp of hikes seen to Mar 2024).
US TSY FUTURES: BLOCK, Sep'23 2Y Sale
- Appears to be another 2Y sale, while futures holding well off early session lows
- 5,000 TUU3 101-18.25, sell through 101-18.38 post-time bid at 1051:28ET
JPY: USDJPY Downside Momentum Builds Below 142.00, AUDJPY Falls 0.9%
- Despite a relief rally overnight to highs of 143.01, USDJPY has gravitated lower once more, with downside momentum building amid the latest pull lower for core yields and coinciding with a clean break of the 142.00 handle to print fresh intra-day lows of 141.56.
- Technically the pair has breached the 20-day exponential moving average and attention will be on whether the pair closes below 142.24, the former bull channel top. A sustained break would signal scope for a deeper correction and open 140.30, the 50-day EMA. Longer-term, the primary trend direction remains up. The bull trigger is at 145.07, the Jun 30 high. Clearance of this level would confirm a resumption of the uptrend.
- AUDJPY screens as one of the weakest pairs on the board, declining 0.90% on Monday and narrowing the gap with the 38.2% retracement of the Mar-Jun bull leg, which comes in at 93.23.
- Naturally, the focus for yields/the Yen will be Wednesday’s US inflation data where headline CPI is anticipated to decrease by 0.9 percentage points to reach 3.1% Y/y, the lowest level since March 2021. Core CPI is expected to moderate by a more moderate 0.3 pps to 5.0% Y/y.
- Domestically, there are no tier-one data releases with money stock, PPI and core machine orders on the docket over the next 48 hours.
