Forex and Bitcoin news for Asia trading Friday 13 April 2018
- Q1 China trade data (more): Imports from US much higher! (exports even more though)
- Reuters on Japan, BOJ. GDP forecast. BOJ seen shifting goalposts again
- RBA - risks to Australia economy from China remain elevated
- PBOC sets USD/ CNY mid-point today at 6.2898 (vs. yesterday at 6.2834)
- More headlines on Japan sales tax - panel will be set up to consider impact
- HKMA comments on their intervention in currency market
- WSJ: US to detail tariff list on $100bn imports from China as early as next week
- Russian media - says Russia want coordinates of US targets in Syria
- Bank of New Zealand-Business NZ Manufacturing PMI: 52.2 (prior 53.4)
- May, Trump spoke Thursday - agreed vital to deter use of chemical weapons by Syria
- More from Fed's Kashkari: Tax cuts, government spending may push inflation up
- Intervention in the HK dollar - HKMA sells USD, defends peg
The Hong Kong Monetary Authority (HKMA) confirmed intervention n the HK dollar market. The central bank bought HKD (sold USD) after the local dollar fell the lowest permitted in its trading band.
- Bought 816 million HKD purchase on Thursday
- Bought another 2.44 billion HKD early on Friday morning
While the HKMA is obliged to do something to maintain the HKD in its band (and have the reserves to do more if needed) its going to be an uphill battle for them. While the USD remains weak and the spread between LIBOR and HIBOR persists the market is incentivised to borrow HKD as funding for higher yielding assets that are expected to be stable and /or appreciate (for example, the yuan, both onshore and offshore, has been on an uptrend). This will keep the HKD under pressure.
Meanwhile, in Singapore, the central bank there (the Monetary Authority of Singapore (MAS)) tightened monetary policy (check out how, here:
The SGD gained on the announcement, chart from the post at the time:
On trade issues, we got the March trade balance from China today, the first deficit (USD terms trade balance) since February of 2017:
We also got TPP comments out of Japan
And out of President Trump:
In other news, we go the odd bit on Syria, but noting really new (see bullets above).
From Australia today we had the twice-a-year RBA stability review.there is a (longish) post on it above, but long story short: the Bank continues taking note of risks around
- low rates around the planet
- China
- local housing (but having diminished) & commercial property
- Household debt
- Roll over of interest only debt in coming years may see increase in repayments and weight on economy
See positives on:
- banks improving
- And while rise in short term funding costs is an issue, not overly concerned
Currencies did not swing in big ranges. USD/JPY popped it ovenight high but did not sustain there as is little net changed on the session (up a few tics overall).
AUD/USD traded higher (AUD/JPY too) within a small range though.
CAD, NZD, EUR, GBP, CHF all little changed against the USD. Gold gained a few dollars
Bank notes:
- Morgan Stanley on the CHF and CAD. (OK then, on CHF/CAD)
- Deutsche on USD/JPY, likely 105 -108 for a time
- Citi on USD/CAD - looking for further CAD gains
Still to come:
And so I'll hand over to the Europe/UK time zone. And of course, no Mike today :-(
I'm gonna miss him! Mike was a stalwart of the UK/Europe time zone and did a huge service with his comprehensive posting on levels and orders each and every day... along with other posts of course. And, if you haven't already, check out his brilliant: ForexLive Education: Option contracts, their impact and how to trade off them
