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A pretty quiet day for the major currencies, as a lack of economic reports inspired tight ranges and focused investors’ attention on central bankers’ speeches.

  • Fed’s Dudley: “not particularly concerned that inflation is a little bit below target”
  • Dudley: “not in favor of tax stimulus at the current time”
  • BOJ’s Kuroda: “don’t see easy monetary policy hurting Japan’s financial system so far”
  • BOJ’s Kataoka: Premature to debate an exit strategy

Major Events/Reports:

Central banker speeches

There were no major economic reports printed during the trading session, but central bank officials kept traders on their toes nonetheless.

FOMC member and Yellen’s BFF Dudley communicated his chill vibe by sharing that “I‘m not particularly concerned that inflation is a little bit below target.

He added that a low inflation, low unemployment environment is “not actually a bad thing” because it allows them to see just how low jobless rate can go before inflation sees momentum.

Dudley continues to feel confident that wage gains will eventually translate to broader price pressures, enough to push inflation to the Fed’s 2.0% target.

Meanwhile BOJ newcomer Goushi Kataoka rocked the yen’s boat earlier today when he suggested that the central bank should further expand stimulus to achieve its price targets early.

In a newspaper interview, BOJ’s sole dissenter last month defended that it’s premature to debate an exit strategy, as the bank first needs to ensure that it would have room to take policy action “if the global economy is hit by a big shock.

Kataoka added that “Our near-term challenge is to think about how we can achieve our 2 percent inflation target, and whether current steps are enough.

Continued risk aversion

Yesterday we talked about how concerns over the government’s crackdown on riskier forms of financing weighed on risk appetite.

Well, thanks to a lack of fresh catalysts, Asian session traders continued to chew on that info and ride the overall risk aversion train.

  • Nikkei is down by 0.28% to 22,432.200;
  • Australia’s A SX 200 is down by 0.06% to 5,984.90;
  • Hang Seng is down by 0.84% to 29,437.50, and
  • China’s A50 is down by 1.21% to 13,158.79.

Commodity prices didn’t fare much better with a bit of dollar recovery weighing on gold prices and the resumption of Keystone Pipeline operations dragging oil prices lower.

  • Gold is down by 0.11% to $1,293.04;
  • Brent crude oil is down by 0.28% to $6320, and
  • U.S. crude oil prices is down by $57.76.

Major Market Mover(s):

NZD

The browbeaten Kiwi caught a breather today after a lack of fresh catalysts inspired a bit of profit-taking.

NZD/USD jumped 19 pips (+0.28%) to .6928;
NZD/JPY is up by 26 pips (+0.34%) to 77.02, and
AUD/NZD fell by 27 pips (-0.25%) to 1.0978.

The yen dipped across the board after BOJ’s Kataoka shared his bias for more stimulus, but yen bulls were able to gain their mojo back before the session ended.

JPY

USD/JPY rose to 111.33 before leveling off to 111.19;
EUR/JPY popped up to 132.48 before dipping back to 132.35;
CAD/JPY jumped to 87.25 before slipping to 87.12, and
AUD/JPY popped up to 84.66 before steadying at 84.54.

Watch Out For:

  • 7:00 am GMT: Germany’s import prices (0.4% expected, 0.9% previous)
  • 7:00 am GMT: U.K. banks’ stress test results
  • 7:00 am GMT: BOE’s financial stability report
  • 7:00 am GMT: BOE’s Financial Policy Committee statement
  • 7:30 am GMT: BOE’s Mark Carney to hold a presser on financial stability in London
  • 7:45 am GMT: France’s consumer confidence (101.0 expected, 100.0 previous)