Forex news for Asia trading Thursday 13 June 2019
- Japan PM Abe and China President Xi to meet June 27, prior to G20 summit
- Chinese state-owned bank says yuan is likely to drop below 7 within three months
- China SAFE says will keep yuan basically stable at reasonable and balanced
- Responses to the Australian employment report coming through - more again
- Responses to the Australian employment report coming through - more
- Responses to the Australian employment report coming through
- Yen up, risk down
- Yen on the move - USD/JPY a quick 20 pt decline
- China's Vice Premier with bullish comments on the economy
- Australia (May) Employment Change: +42.3K (expected +16K) & Unemployment 5.2% (expected 5.1%)
- China will further open banking, securities and insurance sectors
- PBOC sets USD/ CNY reference rate for today at 6.8934 (vs. yesterday at 6.8932)
- Forex options expiring Thursday 13 June 2019
- Australia Consumer Inflation Expectation (June) 3.3% y/y(prior 3.3%)
- Mexican central bank dep gov says Trump tariffs an almost permanent threat now
- Latest Reuters poll has 40% of analysts expecting a Fed rate cut this year
- China Daily reports economists expecting cuts to interest rates or RRRs in coming weeks
- Why the Australian and NZ dollars are less sensitive to local economic surprises
- Here is how far AUD would fall if the RBA introduced Quantitative Easing (QE) in Australia
- G20 meet June 28 & 29 - FX will be a hot topic. We'll get a big cue on June 24 on how hot.
- UK data - RICS House price Balance (May): -10% (expected -21%)
- CAD - Canadian government expected to announce plans to support canola producers on Thursday
- ICYMI: Boeing reports no new commercial aircraft orders in May, for the second straight month
- Hong Kong government statement - headquarters to be closed on Thursday & Friday
- Here is a not unintended consequence of US tariffs on China
- Canadian Prime Minister Trudeau may meet with US President Trump on June 20
- Trade ideas thread - Thursday 13 June 2019
- BoA on yen, short Eur and USD against it.
As we headed into the session it was obvious the Australian employment data report and hence the AUD would be the focus. Yen responded with 'hold my beer'.
USD/JPY dropped from early highs circa 108.50 to under 108.20 as a wave of 'risk off' swept across markets. Stocks dropped, as did AUD (I'll come back to this) and gold saw some benefit, up a few dollars. During all this most of the majors against the USD were little moved. EUR, GBP, CAD all not doing too much (USD/CHF is down alongside USD/JPY but not to the same extent).
OK, back to AUD. The employment report was a mixed one, but my take on it (see data post above) is it supports those expecting further rate cuts from the RBA. While the headline jobs gain was a big beat, the headline unemployment rate was a miss. And its unemployment the RBA wants to see fall (to circa 4.5%) to fuel a pick up in inflation and economic growth. Buried in the data was an observation that'll sit heavily on the board room table at the next RBA monetary policy meeting - 'trend'' unemployment was up for the third consecutive month. Add in these two snippets also:
- the underemployment rate appears to be trending higher
- average hours worked declined slightly to continue its long trend lower
None of this went unnoticed, market pricing for a July rate cut moved above 75%. By August a cut would appear to be a lock. AUD/USD is lower on the session, continuing its slow slide. A post-data spike to above 0.6935 registered as the high of the day, while a few moments later it was lower and dropped a little further to post lows just above 0.6910. NZD/USD has lost a little ground but it sits above its overnight high as I post.
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For those keeping up with developments in HK, the HK Legislature has cancelled its Thursday Extradition Bill meeting.
- 3 mth HIBOR to its highest since November 2008
- One year to its highest since February
