Forex news for Asia trading Friday 14 July 2017 ...I've just received some very bad news, its actually Monday, not Friday :-( .... 17 July 2017
- More from China's stats bureau: "Prudent and neutral monetary policy"
- More on developments in China over the weekend - 5 big takeaways
- Here is Goldman Sachs ranking of Chinese economic data
- China NBS announce employment stats - Unemployment under 5% in June
- China June Industrial Prdn. 7.6%y/y (expected 6.5%), Retail sales %y/y (10.6%) + more
- China Q2 GDP: 6.9% y/y (expected 6.8%)
- RBNZ's Bascand: Lower NZD would help rebalance growth
- RBNZ's Bascand says NZ economy less vulnerable to shocks
- PBOC sets USD/CNY central rate at 6.7562 (vs. Friday at 6.7774)
- Here's an early Asia wrap (real early)
- Singapore June exports (NODX) up - higher than expected rise
- ANZ on CFTC data - "overall net USD longs to their lowest since May 2016"
- New Zealand inflation data due this week - preview
- Japan govmt draft report - to warn of greater threat from North Korea
- Australian media - "four reasons why the RBA can't raise rates"
- China Q2 GDP preview - "growth likely to cool as Beijing targets property, debt risks"
- UK data - July Rightmove house prices +0.1% m/m (prior -0.4%) & +2.8% y/y (+1.8%)
- NZ June services PMI 58.6 (prior 58.8)
- President Xi Jinping says PBOC to take on a bigger role in in averting systemic risk
- Germany's Merkel on investment - capacity bottlenecks a constraint
- AUD/JPY technical analysis: 'looks poised' for higher
- Westpac's 1 to 3 month AUD outlook
- Oil - OPEC secondary sources say compliance for members dropped to 92% in June
- Add this to the calendar for today in Asia - RBNZ speaker
- ANZ on the AUD in the week ahead
- Trade ideas thread - Monday 17 July 2017
- RBA Debelle weekend interview - barely touched on monetary policy
- A busy week kicks off soon - data due from Asia today
- Monday morning forex prices, early indications: 17 July 2017
Weekend:
- Here is a big level to watch when the market opens
- The ugly finish for the US dollar points to trouble ahead
- Gary Cohn has an embarrassing misunderstanding of the Swiss franc
- UK trade minister says there are contingency plans for no Brexit deal
- China-US trade talks still with work to do as 100-day action plan deadline arrives
- Merkel's coalition Conservatives maintain 13 point lead in latest EMNID election poll
- UK's Hammond says a Brexit transition period is likely to be needed
- PBOC to get larger role in managing financial risks
- Tony Blair says Brexit should be called off if the mood of voters changes
- The Australian dollar was the top performer last week
- New to FX? Check out this introduction to currencies from PIMCO
- ICYM Friday: ForexLive Americas FX news wrap: Cable and Aussie make big moves
It was a Japanese market holiday today which thinned liquidity, and interest it seems, somewhat. The focus was on China, the outcome of the once-every-five-years National Financial Work Conference meeting over the weekend:
- More on developments in China over the weekend - 5 big takeaways
- President Xi Jinping says PBOC to take on a bigger role in in averting systemic risk
(Oh, and that's not all notable about the weekend, but I'll come to that soon)
And of course the GDP and other data:
- China June Industrial Prdn. 7.6%y/y (expected 6.5%), Retail sales %y/y (10.6%) + more
- China Q2 GDP: 6.9% y/y (expected 6.8%)
To the China data first, it was nearly 'beats' all 'round (see bullets) but that translated into very limited responses indeed from currencies. Pretty much everything remained in a small range for the entire session, pre-China data and post-China data.
Pre-data, we got a minor wiggle on a speech from Reserve Bank of New Zealand Deputy Governor Geoff Bascand, Bloomberg reporting his currency comments:
NZD/USD dropped a quick 20 or so points with others losing a handful of points here and there against the USD alongside.
China data gave the AUD a small blip back up, a few points only (i.e. small range for the entire session).
Big, big movers on the day though were Chinese stock markets, with substantial falls (and then recovery).
Shanghai Comp:
Falls were attributed to the outcome of the National Financial Work Conference which emphasized reform and 'firm' monetary policy (see bullets above and also this in the Wall Street Journal:
- Chinese equity markets tumbled shortly after trading began on Monday, dragged by a plunge in small-cap stocks after a high-profile financial conference signaled that policy makers are focused on tighter control of the economy.
- Policy makers at the National Financial Work Conference, which wrapped up on Saturday, mentioned "risk" 31 times and "regulation" 28 times, noted Jack Siu, an investment strategist for Asia-Pacific at Credit Suisse.
- "Good news is now bad news," said Mr. Siu. "The logic behind that is the [People's Bank of China] and the government are looking to balance the risk prevention versus a moderate GDP growth."
).
As I said, the equity market falls were attributed to this story. There are always background concerns on China's economy and markets, so there may be more to break.
Another thing that was also notable from the weekend was the fall in the price of Bitcoin (and others of the ilk), perhaps there is something here too. I'll leave further elaboration on the whys and wherefores to others; China stocks are not the world's most liquid markets at the best of times and moves can extend beyond what appears reasonable; they've done so before and will again.
BTC (I circled Saturday and Sunday):
Also from China today, the PBOC strengthened the CNY against the USD, hardly surprising given Friday's USD move ... but it was a huge injection of liquidity that raised some eyebrows (a net injection of 140bn yuan today, which is large given recent PBOC miserly conduct with injections).
Regional equities:
- Nikkei +0.09%
- Shanghai -0.11%
- HK +0.63%
- ASX +0.07%
