Forex news for Asia trading Thursday 18 February 2016

China

  • PBOC lowers rates for MLF loans - Reuters quotes sources
  • China govt minister: Downward pressure on economy has not eased completely
  • China January CPI: 1.8% y/y (expected 1.9%) and PPI: -5.3% y/y (expected -5.4%)
  • China Pre-market indications show the Shanghai Composite to open up 0.5%
  • PBOC sets USD/CNY mid-point today at 6.5152 . And, injects 80 bn yuan today

Japan

  • Comments from BOJ's Kuroda, says will ease further, in 3 dimensions if necessary
  • BOJ's Ishida: Expect overseas economic growth to gradually rise ahead
  • Japan trade balance (adjusted) for January: Y 119.4bn (expected Y -61.6bn)

Fed's Bullard

  • More from fed's Bullard (yes, again): December rate hike not a mistake
  • More from Fed's Bullard: Oil decline 'no small matter', helps US economy
  • Fed's Bullard: 'unwise' to continue hiking rates amid falling inflation expectations

NZ, Australia, RBA:

  • More from RBA's Edey: Will not comment on rate outlook
  • RBA's Edey: Should not put excessive focus on recent mkt turmoil
  • Goldman Sachs looking for RBA rate cut in May and July
  • Australian Employment Change: -7.9K (expected +13.0K)
  • NZ data - ANZ Consumer Confidence for February: -1.4% m/m (prior +2.3%)
  • NZ Q4 PPIs: Input -1.2% q/q (prior +1.6%), Output -0.8% q/q (prior +1.3%)
  • Moody's: Increased risks to global growth cloud outlook in 2016-17
  • American Petroleum Institute (API) crude oil inventories: DRAW of 3.3 million bbls

Currency moves were not huge in Asia today, but we had some notable developments nonetheless.

The session opened with a surprise draw on inventory showing in the American Petroleum Institute oil data, which saw crude prices pop higher and pretty much sustain throughout the session.

Australian employment data dipped on the month, missing expectations. This may be the first sign of slowing employment growth in Australia after the stellar performance of the labour market in 2015. Month to month figures are, of course, volatile, and with the trend still solidly higher its too early to make a definitive call, but some 'give back' after the strong gains is not going to surprise anyone.

AUD was marked 40-odd (a little more actually) points lower on the release but has since retraced nearly all the 'gap' to be little net changed on the session.

While I'm in the South PAcific, NZD gained a few points over the course of the day. Early data (PPI) was soft, prompting again thoughts of imminent RBNZ easing, but cooler heads have noted Reserve Bank of New Zealand Governor Wheeler has said recently he is awaiting February and March data before he decides. That is, of course a maybe, but the selling of the NZD was not sustained and it finishes today higher & barely off the session high.

Notable comments from Federal Reserve St. Louis branch President James Bullard, who was notably more dovish than he has been lately. As was pointed out in our comments here, and elsewhere, Bullard is a bit of a flip-flopper. Its unclear whether today was a flip, or a flop. He is also, though, most usually a good bellwether of Fed/FOMC thinking ... and it would appear there are no further hikes on the near term horizon. As if we didn't know that already.

We had comments from the BOJ today also - board member Ishida and also Governor Kuroda. Kuroda mentioned easing in 3 dimensions ... can't wait for the 3D printer jibes to start. I'm LOLing already.

The People's Bank of China kicked up the yuan today after yesterday's devaluation, which was a bit of a surprise. They also lowered rates on their Medium Term Lending Facility & gave a solid 80bn yuan injection into the money market. the CPI result for January came in a small tick higher than in December.

USD/JPY gained in the Tokyo morning but has not sustained, back near session lows now. EUR, CHF both little changed. Cable is up a few cents. Gold barely changed on the session.

Regional equities gave a 'like' today:

  • Nikkei +2.77%
  • Shanghai +0.44%
  • HK +2.13%
  • ASX +2.12%