ForexLive Asia FX news wrap: Here come the higher tariffs!
Forex news for Asia trading Friday, May 10 2019
- More US - China trade talk reports, little progress
- Westpac dial back their expectations for RBNZ rate cuts
- US tariff increase to go ahead at 12.01am Friday 10 May 2019
- US President Trump tweeting … about Comey!
- "Hello Mr. President, yes, thank-you for the cookie recipe! President Xi is not free to take your call at present."
- Can anyone make sense of this from the RBA SomP?
- Trump, Mnuchin, Lighthizer met to discuss trade talks
- U.S.-China trade talks will continue Friday, after the US starts to raise tariffs
- RBA SoMP downgrades economic growth and inflation outlook for Australia
- PBOC sets USD/ CNY reference rate for today at 6.7912
- Reports Xi and Trump to speak on phone
- Japan fin min Aso says must closely watch US China trade negotiations
- US - China trade talks are over for this evening (reports)
- Equities, currencies benefitting from optimism on trade talks
- BOJ Summary of April monetary policy meeting published
- Japan earthquake, magnitude 6.3 - off coast off Kyushu
- Japan data: Wages and spending data for March
- Fox media says Trump, Mnuchin and Lighthizer are talking trade talk progress
- RBNZ's dep gov Bascand: Economy growing under 2.8%, need 3% growth to meet inflation target
- New Zealand electronic card spending for April: +0.6% m/m (expected 0.8%)
- More on European Union set to impose fines on banks over collusion on forex trading
- Just after North Korea fired off missile tests the US seized a North Korean cargo ship
- China press reports Vice Premier Liu He says he comes to Washington with sincerity
- China - US trade talks. Background on what the US sees as China reversals on agreements.
- More on US Treasury Department may label Vietnam a currency manipulator
- US Sec State Pompeo says US response to any attack by Iran, or their proxies, will be swift and decisive
- Alrighty - the US - China trade talks have officially begun (this latest round that is)
- US says it will examine more countries for currency manipulation
- Trade ideas thread - Friday 10 May 2019
The session began with the latest round of US-China trade talks getting underway in Washington. They lasted about 90 minutes before finishing up for dinner. Indications were mixed, but the key takeaway was China's lead negotiator, Vice-premier Liu He, saying there was not anything more he could do and it was up to the leaders of the two countries to talk. That was the report anyway. Nevertheless, Friday's talks are scheduled to go ahead.
Markets were intensely focused on any news or rumour snippets. Soon enough we got one that US President Trump and China President Xi would speak on a phone call. And another that Trump, Mnuchin and Lighthizer had met and were reporting seeing progress in the talks. This set off a (small) flow into risk and out of yen. USD/JPY moved back above 110, yen crosses on the up also. AUD, EUR, GBP, and others, all showed strength to varying degrees. AUD, the go-to China proxy gained from circa 0.6990 to above 0.7015 (briefly).
As time ticked away (the higher tariffs were scheduled for one minute past midnight US east coast time) the prospects for some stay of execution on the hikes diminished. They were seemingly dashed when we, finally, got a tweet from US President Trump. Trump was likely having a giggle at the market's expense though, his tweet was something about an ex-FBI director and not on trade issues at all.
Soon after, within minutes, reports hit the wires that yes, tariff increases would proceed as scheduled. Bloomberg citing two unnamed sources. Further reports a little later said there had been little to no progress.
As I post we are counting down the remaining minutes to 12.01 am Washington time and the tariff hike. I'm not shedding any light when I add that there could be changes at any time at the whim of the capricious US President. Stay tuned for Friday folks.
There were other news and data, most notably the Bank of Japan Summary of Opinions from the April meeting and the Reserve Bank of Australia Statement on Monetary policy for May 2019. See posts above for more on these but it was the rumours and chatter around trade that mattered today.
Still to come: