Early Morning Call: JPY rises against major currencies

FOMC

The minutes of the last Federal Open Market Committee (FOMC) meeting where the US left rates on hold showed a split vote, with some still wanting to push rates up, but the final decision to hold was to buy time and assess the need for further rate hikes.

The USD climbed on the news, and equity markets around the world fell. Overnight in the Asia Pacific (APAC) region, Hong Kong's Hang Seng recorded a second day of heavy losses. More economic data today, including the monthly US jobs report, automatic data processing (ADP) private payrolls, and Friday's non-farm jobs numbers, could all help determine the Federal Reserve's (Fed) rate trajectory.

The Reserve Bank of Australia

After Tuesday's decision to keep rates unchanged, the Reserve Bank of Australia (RBA) is expected to hike by 25 basis points. This is according to economists polled by Reuters. More than 90% of respondents, that's 23 out of 25, believe the RBA will increase its official cash rate to 4.35% at its next meeting on August 1. Also in Australia, the trade surplus unexpectedly rose in May to A$11.8 billion. Exports increased by 4.4%, while imports rose by a soft 2.5% a year earlier.

Levi's

Levi's has to fight battles on two fronts: on the production side, costs have been escalating with the cost of cotton, labour, and transport. Swollen inventories have also forced the group to ramp up discounts and promotions.

Oil overview

Oil prices rose on Wednesday. WTI briefly passed the $72 mark and hovered around that level after weekly inventories showed a larger than expected fall in crude stocks. Crude oil inventories fell by 4.4 million barrels last week, according to the API. An oil analyst anticipated a smaller drop of 1.8 million barrels. Gasoline and distillate stocks rose by 1.6 million and 600,000 barrels, respectively.

UK banks

Today, the big UK banks are in front of regulators at the Financial Conduct Authority (FCA), facing accusations of "profiteering" for not adequately passing through recent rate rises. The Bank of England's hefty interest rate increases have seen high-street banks such as NatWest, Barclays, HSBC, and Lloyds increase mortgage costs steeply, but savers have seen their rates rise less fast. Chancellor Jeremy Hunt has backed the FCA's request to meet the banks, saying "Increased interest rates must also be passed on to savers."

Currys

Elsewhere on the equity market, British electrical retailer Currys reported a 38% fall in full-year profit, hurt by the weak performance of its Nordics business, and said it would not pay a final dividend.

Levi Strauss

Levi Strauss is set to report earnings before the market opens. The street expects the denim maker to post earnings of 3 cents per share on revenue of $1.34 billion. That is to be compared to Earnings per Share (EPS) of 29 cents and revenue of $1.47 billion in the same quarter a year ago. Levi Strauss has seen its stock decline by nearly 21% over the past three months.