Forex news for Asia trading Monday 18 May 2020
- Japan - M5.7 earthquake off the east coast of Honshu
- China's Commerce Minister says have been communicating with Australia
- Tuesday the key day this week for AUD-related RBA and data releases
- Oil - "Clearly the fundamentals in the market are improving"
- China new home price data for April, up 0.42% m/m (from +0.13% in March)
- PBOC sets USD/ CNY reference rate for today at 7.1030 (vs. Friday at 7.0936)
- FX option expiries for Monday May 18 at the 10am NY cut
- "There is very little reason to sell" gold
- Singapore April exports, NODX - 5.8% m/m
- Japan economy minister Nishimura on the severe state of Japan's economy
- Long USD/CNH trade recommendation - target, stop (PBOC to let yuan weaken)
- Japan GDP for Q1, preliminary: GDP -0.9% sa q/q (vs. expected -1.1%)
- Fed's Powell: Federal Reserve is not out of ammunition, can do more if needed
- Huawei update - Trump wants to block the firms access to chips, China’s commerce ministry will do what it takes
- NZ services PMI for April comes in at 25.9
- UK Times cites a 'senior' official on Brexit talks with EU: “We are prepared to walk away”
- ANZ expect further RBNZ easing: To increase QE bond buying to NZD 90bn
- UK flagged tanker attacked Sunday off Yemen - no injuries, no pollution, no cargo impacted
- Trade ideas thread - Monday 18 May 2020
- Trump from the golf - says coronavirus destruction could have been stopped by China
- ICYMI - Weekend report of Bank of England considering negative rates
- Brexit - UK Times reports on plans furthered for a no-deal exit
- China's Global Times editor calls on China to step up its nuclear warheads, deterrence
- Monday morning open levels - indicative forex prices - 18 May 2020
Weekend:
- Fed's Powell says economy will recover 'steadily' through 2nd half of 2020
- Germany's Weber: European Union should impose a temporary ban on Chinese takeovers
- Saudi sovereign wealth fund has bought a big stake Boeing
- BoE's Haldane says looking at options alongside, or beyond negative rates
- Fitch affirms France rating at 'AA' but lower its outlook from stable to negative
- Swiss National Bank's Maechler says EUR/CHF FX intervention, 1.05 is not the new informal limit
- Stanley Druckenmiller's most recent talk with the Economic Club of NY - video
There was plenty of weekend news to prompt movement as markets opened for the week, and more incoming with Federal Reserve Chair Powell giving an interview to US TV show 60 Minutes that aired Sunday evening in the US.
Powell was, of course, the main focus and he had plenty to say on monetary and fiscal policy (plus a lot more). His key message was the Fed can, and will, do more if necessary (see bullets above - the post on Powell's remarks contains a link to the full transcript of the interview if that is of interest). Gold was a big winner during the session, adding to gains further as it rose above 1760; Powell's promise of loose policy doing it no harm at all. Silver perfomred well also.
Back to the weekend news, for GBP is was negative. Bank of England Chief Economist Haldane spoke on the Bank pondering negative rates and other news indicated lack of progress on the Brexit negotiations prospects. GBP opened lower in very early trade, circa 1.2075 but as the Asian morning progressed it recovered back above 1.2100.
It was a better session for currencies pretty much across the board. There were the usual slew of US-China tension items about and they did contribute to a little currency weakness early but these were shrugged off as the morning ticked on. AUD, EUR, GBP (already noted), NZD ... all higher. CAD was a performer, with oil (WTI) above $30 for the first time in weeks CAD was a beneficiary. Unusually, there was no awful news for oil out over the weekend.
