Forex news for Asia trading Monday 1 June 2020
- AUD traders - heads up for the RBA meeting Tuesday 2 June 2020 - preview
- Goldman Sachs forecasts a lower yuan (CNY, CNH) - to its lowest since 2008 in the next 3 months
- China - Caixin/Markit Manufacturing PMI for May: 50.7 (expected 49.6, prior 49.4)
- Citi says that markets are out of step with grim reality - warns clients to raise cash
- PBOC sets USD/ CNY reference rate for today at 7.1315 (vs. Friday at 7.1316)
- FX option expiries for Monday June 01 at the 10am NY cut
- Australia monthly inflation, May Headline CPI: -1.2% m/m (prior -0.1%)
- Japan - Jibun Bank/Markit Manufacturing PMI (final) for May: 38.4 (prior 41.9)
- South Korea exports for May, massive collapse: -23.7% y/y, worse than -22.1% expected)
- Australian CoreLogic House Prices for May: -0.5% m/m (prior +0.2%)
- Japan Capital expenditure for Q1: +4.3% y/y (expected -5.0%)
- JPMorgan have 4 drivers for stocks higher - plenty of room to rise from here
- Australia - CBA/Markit Manufacturing PMI for May (final) hits record low at 44
- Chicago heads back into lockdown - to suspend bus, rail services until Monday morning
- Australia AiG Manufacturing PMI for May: 41.6 (prior 35.8)
- US Sec State Pompeo says Chinese Communist Party intent upon the destruction of West
- OPEC+ to discuss extending the current oil output cuts for 1 - 2 months
- Australian infrastructure project announced by PM Morrison - western Sydney airport rail to begin in 2020
- FT: EU Budget Commissioner calls for a new tax on 70,000 large companies
- Riots in the USA spread over the weekend - to more than 30 cities, National Guard called in
- Russia has no objection to the OPEC+ meeting being brought forward to June 4
- Oil - OPEC + is close to bringing its meeting forward a week to June 4 (ie. this week)
- UK Chancellor Sunak is working on an emergency budget statement
- UK accuses EU of working to string Brexit talks out until November
- Brexit (remember that?) - EU negotiator Barnier says the UK needs to get real on trade demands
- Good morning Monday! Early FX price guide 1 June 2020
- AUD/USD: Make or break at 0.6706 - Credit Suisse
- China official PMIs for May: Manufacturing 50.6 (expected 51.1), Services 53.6 (expected 53.5)
- June major central bank overview
Weekend news was not overly encouraging, with a miss for China's official manufacturing PMI (although a beat for services, and both did manage to stay in the expansion zone) and widespread violent rioting across the US. The concern early was for the 'risk' currencies to fall but the opening was quite mixed. AUD, NZD GBP all were a little weak against the USD right at the beginning and yen was up a touch also (ie lower USD/JPY). There was basically zero follow through. I'll come back to currencies in a moment.
Globex opened for the week, with gaps slightly lower for ES and also oil. Soon enough though bids for the USD began to slip away with AUD, NZD GBP, CAD all gaining well (AUD and NZD hit highs not seen since March this year) and even EUR/USD traded up. USD/JPY has dribbled back toward its session low as I update. After FX had recovered ES turned green.
Markets looked to President Trump's response to China on the Friday afternoon just passed and assessed it as fairly meek - without significant escalation the dip we had in early Asia was bought into.
Is it right to shrug off the US riots? History has shown these movements peter out, business reopens and the US gets back to it. There might be more to come in the short term though. Firms are struggling enough as it is to reopen after the COVID-19 devastation in the US (and elsewhere), if they are forced to close again due to the threats of riots its just another weight on economic recovery.
On the data front today the notable release was the private sector manufacturing PMI from China (official PMIs came out over the weekend, see bullets above). The Caixin/Markit PMI moved into expansion, the first time since the pandemic hit that both the official and private surveys of manufacturing PMI are into expansion .
The OPEC+ oil meeting looks like it will be dragged forward a week. It was scheduled for June 9-10 but looks set to begin on June 4. Still awaiting confirmation on this.
