Halister News

(Bloomberg) -- Asia-Pacific currencies and rates will be bracing for the tone of Janet Yellen’s speech at the Jackson Hole symposium on Aug. 26-27, Bloomberg strategist Mark Cranfield writes.

• Yellen will need to be hawkish if Fed intends to keep the door open for a rate hike before year-end, as Fed funds futures have yet to fully price in higher rates
  • Pricing for a Sept. hike was 22% as of Aug. 19 while probability of a Dec. rate rise stood at 51%
• Click here to see major local data due this week
• Japan 10-year govt yields may rise out of negative yield territory if Yellen points to a hike in December;
  • 10-yr JGB yield currently +1.5bps at -0.75%
  • Click here for JGB chart
• USD/JPY’s downward extension below 100.00 may be interrupted if core CPI data shows more deflation and speculation builds for a strong BOJ response in Sept.
• N.Z. trade balance data is unlikely to dislodge NZD 2-yr interest-rate swaps from a bear channel drawn from May 4 high at 2.3150% and June 24 high at 2.3452%
  • NZD/USD continues to find support on dips, even as OIS curve prices for at one more rate cut
• USD/SGD will be eying Singapore CPI data as a lead indicator for next MAS policy review in October; trend of falling inflation led to an easing in April
• NOTE: Mark Cranfield is an FX strategist who writes for Bloomberg. The observations he makes are his own.