Forex news for Asia trading for Tuesday 13 October 2020
- Still scope for yuan appreciation despite the PBOC weekend policy move
- Singapore central bank meet on Wednesday - preview
- China trade balance for January to September 2.3T
- Key FX options expires for Tuesday, October 13
- China's Shanghai composite index opens down 0.16% to 3353.12
- PBOC sets USD/ CNY reference rate for today at 6.7296
- The AUDUSD falls and tests the 100/200 hour MAs
- Coronavirus - Johnson and Johnson vaccine trial paused
- Japan data out earlier, money stock (M3) up 7.4% y/y, its fastest rise ever
- Some US dollar bids coming in for Asia morning trade, AUD lower
- Here is the shopping list of new US arms sales to Taiwan
- EUR/USD to head higher, but the upside is limited
- BoA says S&P500 'melt-up' top to come between the election and inauguration
- Reuters monthly Japan Tankan: October manufacturers' sentiment: -26 (prior -29)
- UK BRC Sales like-for-like for September +6.1% y/y (expected 3.5%)
- HK exchange confirms delay of trading due to typhoon
- Australia weekly Consumer Confidence: 97.7 (from 95.7 previously)
- There may be no trading in Hong Kong today (Tuesday) due to the typhoon
- NZ data - retail card spending +5.4% m/m (prior -7.9%)
- UK coronavirus - chief medical officer says Tier 3 rules 'not sufficient' to limit spread
- Trump tested negative for COVID-19 says his doctor
- China's embassy to the US says China consistently opposes US arms sales to Taiwan
- Trade ideas thread - Tuesday 13 October 2020
- ICYMI - overnight report China is to ban imports of Australian coal
It was a very steady start for the Asian morning with nothing much to disturb forex until a sudden bid for the US dollar sent currencies, most noticeably AUD, lower along with a hit for equity index futures also. About 10 or so minutes after the selling hit the news came out; that Johnson and Johnson had paused trials of their COVID-19 vaccine candidate. You read that right, the sharp drop for 'risk' trades came well before the news hit financial market data feeds.
Selling abated for an hour or so but extended further after that, currencies and equities continuing their decline.
As is often the case, once sentiment took a hit there was a renewed focus on the other less than supportive news flow. The report that the US is to sell advanced weapons systems to the Republic of China (ROC, i.e. Taiwan), brought condemnation from the People's Republic of China (PRC, i.e. mainland China) came back under renewed focus (the announcement and response from China had been made many hours previously).
As I post AUD, EUR, GBP are languishing close to their session lows against the USD. CAD and NZD are not far from their's either.
The Chinese yuan lost further ground following the weekend PBOC move - this the offshore (CNH):