View in Browser

Sign up for Reuters newsletters

A look at the day ahead in Asian and global markets

By Alden Bentley, Breaking News Editor for Finance & Markets, Americas

Data refreshes every time you open this email. For more Asian market news, click here. Please send any feedback to morningbid@thomsonreuters.com” rel=”noopener” style=”text-decoration: underline; color: #404040;”>morningbid@thomsonreuters.com.

The week’s main attraction, Fed Chair Jerome Powell’s testimony before the U.S. House Financial Services Committee, came and went without rearranging the pieces on the table much.

The Japanese yen looked a bit steadier by late morning on Wednesday but that was after the dollar advanced to a seven-month high following publication of Powell’s embargoed remarks that the central bank’s effort to bring inflation back down to 2% was “far from over.”

During the grilling by committee members, Powell pushed back on the description of last week’s decision to hold its benchmark rate at 5-5.25% as a “pause” from the aggressive 500 basis-point tightening since last March, saying two more 25 bp rate hikes by year end was “a pretty good guess.“

U.S. Federal Reserve Chair Jerome Powell is seen on a video display as he testifies before a House Financial Services Committee hearing on “The Federal Reserve’s Semi-Annual Monetary Policy Report” on Capitol Hill in Washington, U.S., June 21, 2023. REUTERS/Jonathan Ernst

Clouding the picture though, Atlanta Federal Reserve President Raphael Bostic said in written remarks and an interview on Yahoo Finance that the Fed should not raise rates further or it would risk “needlessly” sapping the strength of the U.S. economy.

So, that left traders expecting rate hikes to resume at the Fed’s July meeting, even as the futures market reflects doubts that the Fed will deliver more increases beyond that.

The Japanese currency remained under pressure in U.S. dealings after Bank of Japan Governor Kazuo Ueda on Wednesday reiterated the central bank’s dovish stance to maintain its ultra-loose monetary policy.

Graphics are produced by Reuters.

The dollar firmed 0.3% on the day, wrapping up around 141.805 yen <JPY=>, though it pulled back from its highest print since Nov. 11 at 142.39, hit before Powell’s live testimony began.

Meanwhile, the offshore yuan <CNH=> having weakened above 7.20 per dollar for the first time since late November overnight departed Wednesday’s U.S. FX session at 7.1779.

The Australian dollar was up 0.15% at $0.67975, set to snap a three-day losing streak following Tuesday’s release of the minutes of the Reserve Bank of Australia’s June policy meeting, which lacked guidance on further rate hikes. Markets took this as a dovish sign.

U.S. Treasury yields held to pretty narrow ranges and, with Powell leaning hawkish but not deviating much from last week’s FOMC message, the three major U.S. stock indexes fell, for the third straight session.

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Sponsors are not involved in the creation of newsletters or other Reuters news content.

Morning Bid is sent every morning. Think your friend or colleague should know about us? Forward this newsletter to them. They can also sign up here.

Want to stop receiving this newsletter? Unsubscribe here.
To manage which newsletters you’re signed up for, click here.

Reuters Terms & Conditions and Privacy Statement