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Kuroda Believes Oil Prices Drop Beneficial for the Japanese Economy

Thursday, September 10, 2015 1:07 PM GMT

- China's Premier Li Keqiang: China will develop in peaceful way, to seek sustainable growth. What's more, China has ample FX reserves, China doesn't want to fight currency war. China has ample FX reserves, China doesn't want to fight currency war. Finally, China confident to achieve growth target this year, China economy has more opportunities than challenges. (Source: Bloomberg)

- BOJ's Kuroda: Drop in oil prices plus for Japan's economy. Unavoidable oil price moves affect inflation. Reaching 2% can be earlier, later depending on oil. Watching oil price moves closely. Volatility continued to be high in financial markets, Japan's economy has continued to recover moderately. Lastly, expects trend of inflation to continue to improve, expects inflation to reach 2% around 1H FY2016. (Source: dailyFX)

- Japanese equities lower after Thursday's open: Nikkei 225 18419.40 (-1.87%), Topix 1478.80 (-1.90%). (10 Sep @ 12:25:04 AM GMT

- The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1/2 per cent. The Bank Rate is correspondingly 3/4 per cent and the deposit rate is 1/4 per cent. Inflation has evolved in line with the outlook in the Bank’s July Monetary Policy Report (MPR). Total CPI inflation remains near the bottom of the target range, reflecting year-over-year price declines for consumer energy products. Core inflation has been close to 2 per cent, with disinflationary pressures from economic slack being offset by transitory effects of the past depreciation of the Canadian dollar and some sector-specific factors....Canada’s resource sector continues to adjust to lower prices for oil and other commodities, with some spillover to the rest of the economy. These adjustments are complex and are expected to take considerable time. Economic activity continues to be underpinned by solid household spending and a firm recovery in the United States, with particular strength in the sectors of the U.S. economy that are important for Canadian exports. (Source: MarketNews)

- It has been a very eventful day for AUD/NZD following the release of key Chinese and Australian economic data and a policy meeting at the Reserve Bank of New Zealand (RBNZ). Early in the Asia session the kiwi was assaulted by bears following a very dovish policy meeting in NZ, with NZD/USD quickly dropping over 2%. Meanwhile, the Aussie was blown around by inflation data out of China and on the back of stronger than expected Australian employment figures for August. In NZ, the RBNZ cut the official cash rate by 25 basis points as expected, bringing it 2.75%. The bank also cut growth and inflation forecasts and signaled that further easing seems likely, while Governor Wheeler stated that further depreciation in the NZ dollar seems appropriate. There was no silver lining this time around, the bank remains very dovish and seems poised to reduce the OCR to its all-time low at 2.5% at its next meeting in October. (Source: dailyFX)

- It’s been an interesting day for global markets, highlighted by a big intraday reversal on Wall Street. After gapping almost 1% higher to start the day, US stocks have faded into negative territory as of writing as traders expressed their disappointment with Apple’s big media event. Not surprisingly, the waning buying pressure in equities has spilled over into other markets, with bond yields falling, the US dollar rallying, and oil reversing yesterday’s gains. Zooming in on oil, the West Texas Intermediate (WTI) contract is at a critical technical junction. As we go to press, the commodity is pressing against the bottom of a nearly two-week symmetrical triangle pattern at 44.50. This technical pattern is analogous to a person compressing a coiled spring: as the range continues to contract, energy builds up within the spring... Oil prices dipped below $45 a barrel on Wednesday after the Energy Information Administration lowered its crude-oil price forecasts for this year and next. Traders also awaited data on U.S. crude supplies that are expected to show a weekly climb. On the New York Mercantile Exchange, October CLV5, -3.83% West Texas Intermediate crude CLV5, -3.83% traded at $44.90 a barrel, down $1.04, or 2.3%. October Brent crude LCOV5, -3.86% on London’s ICE Futures exchange fell $1.16, or 2.3%, to $48.36 a barrel. Overall, oil prices have fallen by more than 15% so far this year, and are at roughly half the level they were a year ago (Source: FXStreet)

- Swedish Econ: PES Unemployment Rate (AUG): 4.3% vs expected 4.3%, with 4.1% prior. (Source: dailyFX)

- Pound May Fall if Hawkish Bank of England Minority Does Not Grow. (Source: DailyFX)

- Today’s Upcoming Events: BoE Rate Statement, US unemployment claims, US Treasury yields (30-y Bond Auction)

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