Forex news for Asia trading Monday 16 December 2019
- Citi is bullish on the US-China trade truce, and on gold
- More from China's State planner - will not resort to massive stimulus
- China's state planner says China has the confidence and conditions to achieve full-year economic targets
- Hong Kong Airlines had seven of its planes seized after it failed to make some payments
- Largest Australian fund manager says the RBA will cut rates again (in February 2020)
- Japan finance minister Aso - new govmt committee is looking at how to support IPOs
- Japan Econ Min says hopes exports will improve following US-China trade deal
- ICYMI - BoE says core of the UK financial system is resilient to, prepared for Brexit
- US Sec of Defense says North Korea may launch more weapon tests
- PBOC sets USD/ CNY reference rate for today at 6.9971 (vs. yesterday at 6.9915 )
- AUD dips a few tics - the RBA minutes were quite downbeat
- RBA Dec minutes: Says will reassess conditions in February meeting
- NZ business confidence falls again, not as bad as before though
- China press says PBOC may implement 2 targetted RRR cuts next year
- EUR/USD and the importance of 1.12
- Australia weekly consumer confidence, ANZ/Roy Morgan survey: 108.0 (prior 109.0)
- Trade ideas thread - Tuesday 17 December 2019
- UK Press - PM Johnson will guarantee Brexit by end of 2020, trade deal or not
- Australia's prudential regulator to impose an increase on Westpac's capital requirements
- St. Louis Fed President Bullard interview - says he is in "wait and see" mode
- Reports that yes, Boeing will halt production of 737 Max (in January)
The US dollar edged a little higher in very early Asia trade (pre-Tokyo) with a slightly weaker AUD and NZD the most notable. GBP was a touch softer also, but picked up the ball and ran with it a little later, seeing cable dump from circa 1.3325 to under 1.3275 and then lower still. The move was attributed to a piece in the UK Telegraph that said UK PM Johnson would take the UK out of the EU by the end of 2020 deal or no deal. Like this is a surprise? BJ has expressed his exit intentions very firmly, time and time again. In the hours that followed explanations for the move lower in GBP centred on the piece, saying it raised the spectre of a 'no deal' Brexit. Conveniently ignoring that this was never off the table under Johnson. He wants out, deal or no deal.
Still, it was enough to trigger sellers bailing out - GBP/USD saw stops under 1.3320 triggered. The move came pre-Tokyo hours, which is the thinnest time of the 24 hour forex cycle for liquidity (in case you are unfamiliar with how the FX market functions - its OK, we were all new once), and thin liquidity can see the extent of moves extended (something to take note of as we head towards the thinly-traded Christmas/New Year time of year). In the months ahead we can expect many more thin-market GBP moves on Brexit headline ping-pong.
Cable dipped under 1.3240 and has since retraced some of the fall, but has not yet troubled 1.3300.
GBP has not been the only mover today. NZD/USD found some support after the release of some better data in the ANZ monthly NZ business survey. The 'activty' and 'confidence' indicators both impoved. Confidence is back at levels not seen since the NZ election in 2017; note though its still in negative territory despite improving on the month. NZD/USD popped above 0.6600.
The Australian dollar, on the other hand, had a poor session indeed. RBA minutes (December meeting) were gloomy (IMO) and reiterated February is a 'live' meeting. That was my take. The investment head of Australia's largest fund manager went further, saying the Reserve Bank of Australia will cut again at that first meeting of 2020.
Apart from those moves there was little else, small ranges against the USD for CHF, EUR, CAD and yen and not much news of impact for any.
In China, the yuan was set a little stronger again today by the PBOC, and the tech-heavy Chinext index hit a new high for the year.
Still to come:
