Tuesday: Fundamentals still weigh on yen

Oil prices drop after Donald Trump calls off a big strike on Iran. The yen has bounced after intervention, but the fundamentals are still weighing it down. And Taiwan’s GDP growth beats expectations.

In our deep-dive interview, ANZ Group Chief Economist Richard Yetsenga looks at the big selloff in US bond markets after new Fed Chair Kevin Warsh underlined he wouldn’t give forward guidance any more.

5 things to know in 5 minutes:

1. The big news in markets remains the yen, after its sharp rebound in recent days, powered by intervention from both the Fed and Japanese authorities. ANZ Head of FX Research Mahjabeen Zaman points to the particular importance of the Fed.

2. Mahjabeen says there was a real twist this time in the intervention, that involved the euro and possibly the European Central Bank.

3. Mahjabeen has some doubts about whether the yen’s rebound can last when she looks at the fundamentals, including rising oil prices, rising budget deficits and higher interest rates in the US.

4. Taiwan’s GDP growth was a stronger-than-expected 12.9% in the June quarter from a year ago, says ANZ Greater China Economist Vicky Xiao Zhou.

5. New Zealand consumer confidence bounced in July from June. ANZ New Zealand Chief Economist Sharon Zollner says fuel prices are playing a key role in spending decisions.

Cheers,

Bernard.

PS: Catch you tomorrow with a preview of New Zealand’s labour force data for the June quarter.

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