CORRECTED-MNI: Fed's Hammack-Near Or At Time To Slow Rate Cuts

MNI BRIEF: Fed's Goolsbee Sees Rates Fair Bit Lower In A Year

CANADA JOBLESS RATE +6.8% VS FORECAST +6.6%, PRIOR +6.5%

MNI China Daily Summary: Friday, December 6

MNI: PBOC Net Drains CNY288.1 Bln via OMO Friday

MNI: PBOC Sets Yuan Parity Lower At 7.1848 Fri; -1.64% Y/Y

MNI: UNIV OF MICHIGAN CONSUMER SENTIMENT PRELIMINARY DEC INDEX 74.0

CANADA NOV IVEY PURCHASING MANAGERS INDEX 52.3 SA

EZ/UK Bond Supply Calendar: Austria, UK Auction on Tuesday

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

FOREX: Analyst Views on Short-Term JPY Trajectory

FOREX
BulletMarketsForeign Exchange Bullets
  • *JP Morgan: While they ultimately see a scenario in which global growth continues to be a headwind for cyclically-oriented currencies and softer US labour markets continue to pressure yields, JPM maintain that short cross-JPY is a viable medium-term trade. But the ambiguity of the NFP release and the potential perceptions of a quicker Fed easing cycle despite the labour market not breaking can provide a short-term reprieve for high-beta, and so JPM continue to run their barbell strategy and its suite of long-JPY trades (vs USD, EUR, CHF) and long-Scandi trades (NOK, SEK vs EUR).
  • *Goldman Sachs continue to stress the most recent backdrop for JPY outperformance looks unsustainable without an imminent US recession or at least more rapid cuts from the Fed, neither of which is their base case. Now, a slowing US economy and somewhat higher odds of recession make being long Yen a more attractive hedge than it has been in a long time and probably limits the scope for upside in USD/JPY, but Goldman’s more sanguine macro forecasts suggest that the cross should be drifting back higher.
    • On net, Goldman Sachs remain less constructive on the Yen unless the Fed outlook changes and would caution that any tactical longs would be particularly vulnerable to an upside surprise in US data.
213 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
  • *JP Morgan: While they ultimately see a scenario in which global growth continues to be a headwind for cyclically-oriented currencies and softer US labour markets continue to pressure yields, JPM maintain that short cross-JPY is a viable medium-term trade. But the ambiguity of the NFP release and the potential perceptions of a quicker Fed easing cycle despite the labour market not breaking can provide a short-term reprieve for high-beta, and so JPM continue to run their barbell strategy and its suite of long-JPY trades (vs USD, EUR, CHF) and long-Scandi trades (NOK, SEK vs EUR).
  • *Goldman Sachs continue to stress the most recent backdrop for JPY outperformance looks unsustainable without an imminent US recession or at least more rapid cuts from the Fed, neither of which is their base case. Now, a slowing US economy and somewhat higher odds of recession make being long Yen a more attractive hedge than it has been in a long time and probably limits the scope for upside in USD/JPY, but Goldman’s more sanguine macro forecasts suggest that the cross should be drifting back higher.
    • On net, Goldman Sachs remain less constructive on the Yen unless the Fed outlook changes and would caution that any tactical longs would be particularly vulnerable to an upside surprise in US data.