Forex news for Asia trading Friday 18 March 2016

  • Australia passes voting reforms, paves way for early election
  • ANZ on the SGD - sell the crosses
  • BNP on oil: "Global fundamentals little changed, oil lifted by higher risk-appetite"
  • Moody's on the euro: Eurozone recovery ongoing, poitical risks rising
  • China home prices post biggest rise in almost 2-yrs on red-hot demand in big cities
  • China property prices for February: 'All China' new home prices +3.6% y/y
  • PBOC sets yuan reference rate for today at 6.4628
  • Japan's Suga: Government not considering sales tax delay
  • China press reports on preparations for CDS market
  • Euro: ECB "may well need to prepare for verbal intervention"
  • Australian foreign investment rules tightened - more detail
  • New Zealand - ANZ Consumer Confidence Index (March) 118.0 (prior 119.7)
  • BOJ January meeting minutes out now
  • PBOC Zhou on direct financing to lower debt leverage
  • France's Hollande says monetary policy can't do everything
  • Japan - more on the Abe considering sales tax delay story
  • Morgan Stanley says Federal Reserve will not hike, have been overly optimistic
  • Trade ideas thread for Friday 18 March 2016
  • PIMCO sees 2016 global GDP growth between 2.25% & 2.75%
  • Yen and yuan movers in Asia today.

USD/JPY dipped back towards the overnight low, and bounced, reigniting talk of BOJ ring-arounds to check on flows - unconfirmed. The Nikkei was hit lower too, and has since had a lacklustre bounce; at least there does seem to be some Japanese investor demand. Not enough to send it bouncing too much though:

Meanwhile today, the 10-year JGB yield fell to a record low, as did the 20-yr.

The PBOC gave a sharp boost to the CNY at the daily reference rate setting, USD/CNY down more than 0.5% from yesterday's mid-rate. The bank also injected 110bn yuan into money markets (OMOs via 7-day reverse repos) to counter a 3-week high in rates (tax payments and convertible bond sales cited for the tightness). After a series of net drains each week since the end of the LNY holiday this week saw a net injection.

News from China continued, with China property prices 'on fire'; prices up strongly in tier 1 cities and not so much in lower tier cities. Oversupply in the latter and shortages in the former cited. Supply and demand, eh? Who'd a thunk it?

Leading into the yuan setting and over it there was decent USD selling nearly across the board. AUD/USD surged through the offers that had been holding it around 0.7650, getting to around 0.7680 before once again backing off a little and settling. NZD, GBP, EUR, CHF all higher at the same time to various extents.

Regional equities:

  • Nikkei -1.45%
  • Shanghai +1.88%
  • HK +0.68%
  • ASX +0.37%

More:

  • North Korea fired two test medium-range ballistic missiles into the sea
  • Iron ore had another good day in China