European FX Open - More rate checking to come?

USD/YEN bottoms for now at 157.44 in the wake of Thursday's US CPI miss and possible/probable FX intervention by the MOF.

The Fed's Goolsbee described the latest inflation data as 'excellent,' adding the figures provided the evidence he s been waiting for to be confident the Bank is on a path to its 2% goal and the broader USD stays on the relative back foot. Daly said some adjustment to interest rates may be warranted though stopped short of offering a specific timeline for cuts and Musalem suggested he needed some more convincing to lower borrowing costs.

In truth though, current focus looks to be on the YEN and Japanese admins. Bbg reports Japan's top currency official Kanda continued his attempts to keep speculators on edge amid potential signs of an evolution in Tokyo's YEN strategy as he played down a report that government officials had confirmed intervention. Chief Cabinet Secretary Hayashi said at a regular press conference earlier Japan is watching the FX market closely and will take any measures needed.

Overnight, the YEN was in volatile mood in Tokyo amid speculation the BOJ conducted so-called rate checks with traders, reinforcing perceptions that authorities have been intervening in the market. Will we see such activity in Europe ahead of the week's close to help 'guarantee' a sub-160 finish?

Elsewhere, CPI to be a focus in Europe this morning, with Sweden and France reports due.

In the second half, US June PPI leads, with final demand expected to come in at 0.1% m/m and 2.3% y/y and small increases on the previous month.

Last night, China's trade surplus soared to the highest since at least 1990 in June at Usd 991.bln, as exports jumped more than expected at 8.6% y/y while weak domestic demand meant imports unexpectedly weakened, at -2.3% y/y.

On the central bank front, the BOE releases a quarterly bulletin article.

Meanwhile, on the news front, The Times reports US President Biden's attempt to reset his rapidly deteriorating re-election campaign stumbled as he mixed up world leaders and described his own deputy as 'VP Trump'. In what was billed as the most important press conference of his 52 year-long career in American national politics, the president, 81, spoke lucidly at times, stressing that 'I ve got to finish this job'. The NYT reported earlier his advisers are discussing how to convince him to end his campaign and at least three House Democrats called on the president to step aside after the briefing.

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