USD/JPY flows - Respectable 30-year auction, Warsh to speak next week
Today’s 30-year auction was not as impressive as the 10-year auction yesterday, but showed respectable demand keeping UST yields well off earlier highs, and that is weighing on the USD, USD/JPY in particular.
Oil is off its highs assisted by Trump stating he will not bomb Iran ahead of the midterms, though oil is holding up better than UST yields.
Earlier comments from Fed’s Waller reinforced expectations both of an October pause and a December tightening, as was also implied by yesterday’s minutes. Fed expectations could be further influenced by next week’s data, notably CPI on Wednesday, with PPI and retail sales on Thursday also potentially significant. Fed’s Warsh is now due to speak on Friday October 16 in what is likely to be the last public Fed comment ahead of the October 29 meeting. This will give him the chance to respond to the data, though Warsh tends not to like placing too much emphasis on individual data points.