Forex news for Asia trading Wednesday 12 June 2019
Hong Kong developments:
- Fitch with a (timely) update on Hong Kong - rating and outlook both affirmed, unchanged
- HKD one-month borrowing rates to their highest since October of 2008
- Hong Kong's government has postponed debate on the extradition bill to an unspecified time
- HK press cite police fearing protesters arming themselves with bricks, other weapons
- Hong Kong protests could turn more ugly in the hours ahead
Other:
- China inflation data for May: CPI 2.7% y/y (expected 2.7% ) and PPI 0.6% y/y (expected 0.6%
- Google is moving some hardware production out of China, for 2 reasons (both are govmt meddling)
- PBOC sets USD/ CNY mid-point today at 6.8932 (vs. yesterday at 6.8930)
- Iron ore on the move higher - Dalian iron ore up 4% at open
- Australia - monthly consumer confidence -0.6% m/m (prior +0.6%)
- EUR/USD - upside is fairly limited from here
- Japan PPI for May: 0.7% y/y (expected 0.7% y/y)
- Japan Core Machinery Orders for April: 5.2% m/m (expected -0.8%)
- Australian weekly consumer confidence 114.6 (prior 116.9)
- China Securities Journal says PBOC has room for further targeted RRR cuts
- New Zealand data - May card spending (retail) -0.5% m/m (expected +0.5%)
- ICYMI - US President Trump tweets the Euro & other currencies are devalued against the dollar
- Here's an argument why euro is only a slightly undervalued
- Goldman Sachs forecasts choppy USD "downside in the months ahead" because 1980s
- ICYM - Three BoE monetary policy makers warn of several interest rate rises
- Oil: UAE Energy Minister says OPEC close to reaching agreement on extending production cuts
- UK PM hopeful Boris Johnson promises no more Brexit delays
- Trade ideas thread - Wednesday 12 June 2019
- PIMCO expecting rate cut forward guidance at next week's FOMC meeting
- Private survey oil data shows a build in inventory (a draw was expected)
Gold has had a gain of a few dollars on the session here, tensions in Hong Kong have been cited as one supportive factor.
Protests in Hong Kong took a nastier turn today, with a more aggressive police response (reports of capsicum spray being used on some protesters). As I update the latest is that Hong Kong's Legislative Council President Andrew Leung has postponed debate on the controversial extradition law to an unspecified time. HK financial markets were on the move also, with a strong showing for the HK dollar, moving away from the weak end of its band (USD/HKD lower) and borrowing rates higher (1 month HIBOR to highs last seen in Oct of 2008, 2 month HIBOR to highs last seen in Nov of 2008).
News flow otherwise was barely existent.
We did, though, get some data points. Notable from Japan were PPI and machine orders, while from China it was May month inflation. CPI climbed to its highest since February 2018 on the back of rising food prices (fruit and pork much higher), while the core rate remains much more subdued.
Across FX the needle did not move much.
USD/JPY, EUR/USD, GBP/USD, USD/CAD are barely changed on the session.
NZD/USD has dripped a little lower, down 15 or so points from earlier session highs just above 0.6585. We got some disappointing retail sales data (card spending, see bullets above, is the data I refer to; spending on electronic cards in NZ accounts for nearly 70% of core retail sales). I don't know if the fall in the kiwi can be pinned on this, but it didn't help.
AUD/USD is also a touch lower, down circa 10 points from its early session high. Disappointing consumer confidence data (2 readings) released today.
Still to come:
