Forex news for Asia trading Friday 19 July 2019
- NAB on the FOMC - 25bp cut in July, and more to follow
- Fitch on the BOJ (likely to ease) , ECB (more QE) and Fed (one cut this year)
- ps. Here's why there are no in person US China trade talks scheduled
- Still no indications on when in person US China trade talks will take place
- US National Economic Council Director Larry Kudlow to meet with Huawei suppliers
- The New York Fed 'clarified' Williams' comments - but will anyone clarify Clarida's?
- PBOC sets USD/ CNY reference rate for today at 6.8635 (vs. yesterday at 6.8761)
- Significant forex option expiries on Friday 19 July 2019
- BOJ Governor Kuroda coming up too
- There are more Fed speakers coming up on Friday
- BoAML monthly survey of fund managers, shows them embracing 'risk'
- NZD/USD hit the 0.6785 target
- The New York Fed wound back Williams comments at the most damaging time of the day - here's why
- US dollar gaining points on New York Fed disavowing Williams
- New York Fed says Williams' speech was not about potential policy actions at the July FOMC meeting
- Deutsche Bank Wealth Management to equity investors: quit while ahead, move to safety
- Citi forecasting a 50bp rate cut from the Federal Open Market Committee in July.
- UK Times reports on an expected wave of ministerial resignations if Johnson becomes PM
- Iran's Foreign Minister Zarif - drone? what drone?
- Trade ideas thread - Friday 19 July 2019
- ICYMI: US Treasury Secretary Mnuchin said no change to USD policy for now
If you missed the US session you missed the speeches from Fed officials Clarida and Williams - the two of note. Clarida got the ball rolling with dovish comments and Williams followed up later with more. Markets were quick to latch onto Williams' remarks, taking what he said as signalling a 50bp rate cut at the upcoming July meeting. The response was swift, equities caught a bid and the USD dropped. This was during the US session but its the background for what came next …
We entered early Asia (well prior to Tokyo markets, i.e. only NZ and Australia getting active) with a bit of consolidation, but this didn't last. Officials at the New York Fed issued a correction to Williams' comments, saying they were academic and 'not about potential policy actions at the upcoming FOMC meeting'.
Market response to this was even more swift, with a sharp upmove for the USD and equities dropping. As the dust settles the market has pulled in its expectations for 50bp, although not removing it completely from the table, and moving back towards it'll be a 25bp cut.
Movements for currencies were, in summary, that sharp move up for the USD and then retracement moves to varying extents across currencies.
- EUR/USD dropped from touching just over 1.1280 to circa 1.1240 and a retrace towards 1.1270.
- USD/JPY lows were just above 107.20, the clarification from the Fed took it back to 107.60 and its just over 107.50 as I update.
- AUD/USD high just over 0.7080 (NZD/USD just over 0.6790) then the drop to under 0.7060 (NZ under 0.6770) before stabilising above 0.7070 (NZ circa 0.6765).
- CAD, CHF, GBP played out accordingly.
Gold had a great US session and managed a high above $1,452 before given 15 or so dollars back.
News and data flow apart from this was limited. Japanese CPI data indicated well under the BOJ target, nothing new here.
