Forex news for Asia trading for Tuesday 19 January 2021
- Moody's is more upbeat on its outlook for APAC this year - China a driver
- Ronald McDonald says GBP is 22% undervalued against the US dollar (Big Mac index)
- China's Q1 2020 GDP drop was -19.4%, not the officially reported -6.8%
- China's State Planner says there will be no sudden shift in monetary policy in 2021
- 4 reasons NZD/USD is heading higher still
- FX option expiries for Tuesday January 19 at the 10am NY cut (big EUR/USD expiries today)
- WSJ report on China's economy to reach parity with the US by 2028
- PBOC sets USD/ CNY reference rate for today at 6.4883 (vs. yesterday setting at 6.4845)
- A new Trump video to drop on Tuesday - a farewell address
- US media report that North Korea Kim could be planning a missile launch to welcome Biden administration
- Biden adviser says new administration does not intend to lift EU travel restrictions
- Bank of Canada meeting this week - preview (spoiler - an uneventful meeting)
- Japanese firms intend to hold or boost capex ahead -
- South Korea warns again it is monitoring market volatility
- Reuters report Trump plans lifting travel restrictions on much of Europe and Brazil over Covid-19 starting Jan. 26th
- There are some (unconfirmed) report of US airstrikes in Iraq
- Coronavirus - New Zealand to require a pre-departure test from next week
- Australia weekly consumer sentiment: 108.7 (prior 108.9)
- Biden's Keystone canning came more rapidly than expected, Trudeau flailing
- Janet Yellen to tell confirmation hearing that the US should ‘act big’
- Coming up - Yellen testifies on Capitol Hill today - will it weaken the USD?
- Trade ideas thread - Tuesday 19 January 2021
- NZ data - December card spending: Retail +3.5% y/y
- The pattern in EUR/USD around Presidential inaugurations
Monday was a holiday in the US and FX remained subdued, the very early hours of Asia followed suit. As Tokyo became active though the USD began to show some weakness with currencies gaining except for yen. USD/JPY has subsequently rallied to highs over 104 while EUR, AUD, NZD, CAD and GBP all gained against the dollar. The net result has been a strong session for yen crosses. There is no obvious immediate catalyst or catalysts, some are attributing the dollar weakness (except against the yen) to Yellen's upcoming testimony on Tuesday (US time).
Meanwhile regional stock markets have, broadly, also surged on the day. As I post Hong Kong's Hang Seng index is up over 2.4%, supported (it is said) by China flows and, more objectively, 19 consecutive days of inbound (to HK) flows from the Shanghai-HK Stock Connect, 2 days showing the largest net flow to HK on record.
US equity indexes futures traded higher on Globex (which reopened after its Monday holiday).
HK skyrocketed:
