European FX Open - USD/YEN slides below 155.00

The USD starts the day in mixed shape.

Most dramatically, USD/YEN fell below the psychological 155 mark overnight amid speculation of a possible +15BPs rate hike from the BOJ at the end of the month, with Tokyo-based accounts leading the selling. And in a Bbg survey, while only about 30% of BOJ watchers say authorities will hike interest rates when they gather next week, more than 90% see the risk of such a move.

Meanwhile, Japan's flash composite PMI spiked to 52.6 vs 49.7 last, with services leading the way even as the manufacturing version slipped into contraction territory.

After the ECB warned on downside growth risks last week, European PMI versions will be under the spotlight this morning.

In the second half, the BOC is expected to cut interest rates for a second straight meeting, -25BPs to 4.50%.

And in the US comes their flash PMIs and new home sales.

Also on the central bank front, the ECB's Guindos and Lane are scheduled speakers, with Fed's Bowman due tonight.

Elsewhere, all US stock futures stand in the red at the time of writing, losses led by the -0.8% NASDAQ, after the the start of the release of the Magnificent Seven earnings was underwhelming. Bbg reports Tesla slumped post-market after profit missed for a fourth quarter and it delayed its Robotaxi event to October, while Alphabet slipped as Sundar Pichai signaled patience will be needed to see results from AI investments.

Meanwhile, a Reuters/Ipsos poll showed Kamala Harris leads Donald Trump 44% to 42%, as the VP assailed her Republican rival Donald Trump in her first rally since launching her bid for the White House, describing their contest as a choice between two starkly divergent agendas for the US economy. Trump said he s willing to debate Harris.

And in Europe, Bbg also reports Spanish lawmakers rejected the government s fiscal targets in a surprise loss for Socialist PM Pedro Sanchez, suggesting difficulties in passing a budget for 2025.

---- Subscribe to read more ----

To receive this analysis plus much more, subscribe to IGM. Request your free demo of the service today.