Fed's July minutes already dated on BOE's cut

On Wednesday the Fed will release its minutes from the July 26-27 meeting.

The central bank was bullish on the June employment numbers and jawboned about still raising rates in its post-meeting statement.

The meeting came before the Bank of England cut rates and moved back on the QE train as a result of the Brexit, so anyone looking to divine a September rate rise from these comments will be advised that the Fed cannot and will not raise rates as Britain just cut.

We have a better chance of Japan devaluing its currency for reasons stated below.

I’ve written before about the yen-carry trade and how important it is for the US markets.

Essentially, large institutional buyers use the yen to purchase US securities, since it is so much cheaper, to gain some additional leverage on the purchase.

Well Monday night in Asia saw a huge strengthening of the yen moving below the 100 mark to the dollar, due to data that was showed slowing growth, which you would assume would weaken a currency not make it stronger. Welcome to Jabberwocky.

As I said yesterday in the August doldrums trading is somewhat thin and reactions muted. US stocks, which generally fall hard on stronger yen — especially when it breaks the 100 threshold — seem to take it in stride down only marginally in pre-market.

Precious metals had a bigger move higher on the news, with gold moving up a little less than a percentage point and silver a bit higher than that on a percentage basis. Crude prices moved higher by $0.25 on the news, but that has more to do with anticipated OPEC cuts, which will not happen.