Forex news for Asia trading Friday 14 December 2018
- Economists forecasts for BOJ policy in 2019
- Citigroup likes a buy for global stocks, say concerns on earnings are overblown
- White House to officially delay China tariff hike to March
- Comments from China Stats Bureau: China economy stable and making progress
- China November Retail Sales 8.1% y/y (expected 8.8%)
- China Nov. Industrial Production 5.4% y/y (expected 5.9%)
- PBOC injects funds through MLF
- RBNZ considering raising bank capital (news hit a while ago and guess what...)
- PBOC sets USD/ CNY reference rate for today at 6.8750 (vs. yesterday at 6.8769)
- BOJ has cut its purchase of JGBs in the 5-10 year window
- Japan flash manufacturing PMI for December: 52.4 (prior 52.2)
- US recession risk higher, Fed hike expectations lower say economists
- BOJ Tankan report for Q4 2018: Large Manufacturers index at 19 (expected 18)
- Morgan Stanley: Next week's FOMC meeting is only about one thing (preview)
- EU's Juncker: Will publish details of preparations for no-deal Brexit scenario
- EU's Tusk says Brexit deal with UK is not to be renegotiated
- Brexit - EU says if Nth Ireland backstop triggered it would be temporary
- EU leaders say Brexit treaty can't change, Irish backstop should only be temporary
- Brexit - May: Reassurances from EU will change dynamic in UK Parliament
- Australia CBA Markit manufacturing PMI (flash): 53.7 (prior was 54.6)
- Trade ideas thread - Friday 14 December 2018
- New Zealand manufacturing PMI for November: 53.5 (prior 53.5)
Forex movements were interesting today, preceding (and in one case, perhaps, lagging) news events quite noticeably.
USD/JPY kicked it off, sliding from above 113.60 to under 113.50. AUD/USD had a more dramatic move, from above 0.7225 it traded down to under 0.7200. (I'll come back to the AUD in a moment). AUD/JPY, obviously, was a big loser from the combined moves. News followed that the BOJ had reduced its purchases of JGBs, for the first time since September (and for the first time since June more specifically for the 5-10 year remaining window). The lower USD/JPY was attributed to this development. But, the move was also a broader 'risk' move, with equities falling around the same time (Japan, US overnight trade notably soft).
NZD/USD fell harder than the AUD, dropping from highs around 0.6860. News a couple of hours before was the RBNZ was looking at higher capital requirement from banks, but at the time there was no response from the currency. Perhaps the kiwi fell harder than others on this, but it was not a catalyst at the time of release.
Data followed from China for further weight on the AUD, IP and retails sales both recorded misses (data for the month of November). AUD/USD fell to around 0.7180 and has shuffled sideways to up a few points since.
EUR has done little. GBP is not much net changed either after a small (for it) range. CAD has lost ground against the USD.
ps. There are some Brexit related headlines ahead, like I said not much movement on GBP. The EU is playing hardball (so far) on not making changes to the current incarnation of the Brexit plan. The one May feels she is unable to sell to the UK parliament. If the UK does not budge, and the EU does not budge a no deal Brexit will be the result. That's the real 'back stop'. Still time though. There is plenty more to come on this.
Still to come:
