Related Insights
USD/JPY is consolidating around 147-148, as markets anticipate the BOJ to stay on hold in today’s policy meeting. Given political uncertainty, a BOJ rate hike may have to await the outcome of the LDP leadership elections on 4 Oct. Nevertheless, rate hike hopes are supported by core-core CPI inflation released this morning staying sticky at 3.3% y/y for August. LDP’s Takaichi, who is one of the front runners, will be outlining her policy agenda today, and this may weigh on the JPY somewhat given her bias towards accommodative fiscal and monetary policy. But downside for the JPY should stay limited, as markets are not likely to discount the risk of a near-term BOJ rate hike.
GBP/USD has dipped below 1.36 post-BOE, with members voting 7-2 in favour of holding rates, in line with analysts’ expectations. Governor Bailey said that the Bank is not done cutting rates, but cuts will be “gradual and careful” given upside risks to inflation. Meanwhile, the pace of QT will be slowed to GBP70bn per annum, from GBP 100bn. Furthermore, the resulting GBP21bn of active sales starting October will be skewed away from long-dated gilts to minimize the impact on gilt markets, in context of their recent sell-off. Such a skew suggests that BOE’s balance sheet policy is now responding to bond market conditions, with Chancellor Reeves also urging the BOE to “liaise closely” with the Debt Management Office so as not to impact the government’s gilt issuance strategy. It marks a slight, but notable, deviation from previous guidance that BOE’s balance sheet policy will not be an active one.
Trump and Xi will hold a call tonight, which is expected to formalize an agreement on TikTok and signal a possible easing of trade tensions. The RMB is likely to stay firm with USD/CNH below 7.12, as policy bias remains towards gradual appreciation. US Treasury Secretary Bessent has also mentioned that the US now has no issue with China on its currency policy, given the RMB’s strength against the USD this year.
Quote of the Day
“I’m a student of the game, so I do feel like I need to grow every year, and I think I’ve been able to do that.”
Shohei Ohtani
September 19 in history
In 2024. Shohei Ohtani achieved a historic milestone as the first MLB player with 50 home runs and 50 stolen bases in a single season, earning the 2024 NL MVP Award and the Hank Aaron Award. 
Topic
GENERAL DISCLOSURE/ DISCLAIMER (For Macroeconomics, Currencies, Interest Rates & Digital Assets)
The information herein is published by DBS Bank Ltd and/or DBS Bank (Hong Kong) Limited (each and/or collectively, the “Company”). It is based on information obtained from sources believed to be reliable, but the Company does not make any representation or warranty, express or implied, as to its accuracy, completeness, timeliness or correctness for any particular purpose. Opinions expressed are subject to change without notice. This research is prepared for general circulation. Any recommendation contained herein does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. The information herein is published for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate legal or financial advice. The Company, or any of its related companies or any individuals connected with the group accepts no liability for any direct, special, indirect, consequential, incidental damages or any other loss or damages of any kind arising from any use of the information herein (including any error, omission or misstatement herein, negligent or otherwise) or further communication thereof, even if the Company or any other person has been advised of the possibility thereof. The information herein is not to be construed as an offer or a solicitation of an offer to buy or sell any securities, futures, options or other financial instruments or to provide any investment advice or services. The Company and its associates, their directors, officers and/or employees may have positions or other interests in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking or financial services for these companies. The information herein is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of or located in any locality, state, country, or other jurisdiction (including but not limited to citizens or residents of the United States of America) where such distribution, publication, availability or use would be contrary to law or regulation. The information is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction (including but not limited to the United States of America) where such an offer or solicitation would be contrary to law or regulation.
[#for Distribution in Singapore] This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 196800306E) which is Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. DBS Bank Ltd may distribute reports produced by its respective foreign entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact DBS Bank Ltd at 65-6878-8888 for matters arising from, or in connection with the report.
DBS Bank Ltd., 12 Marina Boulevard, Marina Bay Financial Centre Tower 3, Singapore 018982. Tel: 65-6878-8888. Company Registration No. 196800306E.
DBS Bank Ltd., Hong Kong Branch, a company incorporated in Singapore with limited liability. 18th Floor, The Center, 99 Queen’s Road Central, Central, Hong Kong SAR.
DBS Bank (Hong Kong) Limited, a company incorporated in Hong Kong with limited liability. 11th Floor, The Center, 99 Queen’s Road Central, Central, Hong Kong SAR.
Virtual currencies are highly speculative digital "virtual commodities", and are not currencies. It is not a financial product approved by the Taiwan Financial Supervisory Commission, and the safeguards of the existing investor protection regime does not apply. The prices of virtual currencies may fluctuate greatly, and the investment risk is high. Before engaging in such transactions, the investor should carefully assess the risks, and seek its own independent advice.