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Major FX was relatively subdued ahead of the US NFP data later on Friday. USD/JPY consolidated above 158.00
News and data flow were light.
Japanese November household spending data beat, while Australian household spending data for November disappointed.
While on Australia, ANZ changed its Reserve Bank of Australia rate cut forecast to February from May. ANZ and CBA are now both tipping a February 25bp rate cut (the RBA meeting is on the 17th and 18th).
China's central bank announced on Friday that it will temporarily halt treasury bond purchases due to a shortage of supply, leading to a rise in yields across various maturities.
- The People's Bank of China (PBOC) stated it would consider resuming bond buying based on supply and demand conditions in the government bond market ahead, but for now have paused buying.
- This decision follows the PBOC's repeated warnings about bubble risks in China's overheated bond market, where long-term yields have consistently reached record lows.
- In response to the announcement, yields, which move inversely to bond prices, surged. The 30-year treasury yield rose by five basis points in early trading, while the 10-year yield increased by four basis points.
Offshore yuan also appeared to be waiting for the US data:
This article was written by Eamonn Sheridan at www.forexlive.com.