Forex news for Asia trading for Monday 19 October 2020
- China Q3 GDP recap: YTD growth +0.7%
- Oil - there is an OPEC+ JMMC meeting Monday 19 October 2020
- China Q3 GDP +2.7% q/q (expected +3.3%)
- RBA October meeting minutes are due Tuesday at 0030GMT
- The Brexit timetable ahead - its crunch time for a deal or no-deal
- PBOC sets USD/ CNY reference rate for today at 6.7010 (vs. Friday at 6.7332)
- FX option expiries for Monday October 19 at the 10am NY cut
- Taiwan says will tighten technology transfer rules to Chinese companies
- RBNZ Assistant Governor Hawkesby speech (text) - not on monetary policy
- AUD and NZD on the up in Asia morning trade
- Japan trade balance for September Y 675bn (expected Y 975.6bn)
- FT says 2nd wave means Europe’s economy is sliding towards a double-dip recession ... what it means for EUR
- NZD outlook - support / resistance levels ahead
- Survey of UK business highlights the two biggest risks - (unsurprisingly) COVID-19 and Brexit
- UK data - Rightmove house prices for October: +1.1% m/m (prior +0.2%)
- Trump says he wants a bigger stimulus plan than Pelosi
- Heads up for a speech from ECB President Lagarde Monday 19 October 2020 (and loads more from the ECB)
- UK PM Johnson to warn ‘time running out’ to prepare for end of Brexit transition
- Brexit - UK business told to accelerate planning for a no-deal exit
- New Zealand Services PMI for September 50.3 (prior 47.2)
- Trade ideas thread - Monday 19 October 2020
- PBOC Gov. Yi Gang (weekend) says coronavirus controlled in the country, 2020 growth will be +2%
- Italy has announced a new round of COVID-19 restrictions
- New Zealand weekend election, incumbent Ardern returned with a majority
- Pelosi has set a 48-hour deadline to approve a stimulus deal before the election
- Brexit - UK prepared to back down on law-breaking bill as part of an EU deal
- Monday morning open levels - indicative forex prices - 19 October 2020
GBP gained points today after a weekend of concern about what appear to be deteriorating Brexit trade talks. A lot of angst is playing out in the media and behind the scenes negotiations do continue. We are getting closer to the real deadline now:
GBP recovered 50+ points from its lows during the session as the worst fears were not realised. Yet, anyway. Lets see how it progresses from here.
Also higher are AUD and NZD, seeing some benefit from headlines such as Trump saying he is seeking a bigger stimulus package than even Pelosi is proposing. The US Senate have shown no inclination to pass anything even close to the Pelosi number so its difficult to place much credence on Trump's remarks. Now as I write this up AUD/USD has pretty much given back its earlier gains.
NZD also benefited from the country's weekend election result which saw the incumbent Ardern government returned with a bigger margin of seats. Ardern will be able to govern with a majority (64 seats in the 120 seat parliament). Ardern is a known quantity, has spending plans, and a continued government is a sign of stability.
EUR has not performed so well, albeit not poorly either. Markets are beginning to look ahead to the October 29 ECB meeting and perhaps a more dovish Bank . There are signs too of persistent outflows from EUR-related ETFs.
USD/JPY bounced from its early lows to circa 105.50, briefly.
From China today we got a disappointment on the Q3 GDP data, which came in under expectations by around >0.5%. In Chinese data terms, this is a substantial miss. During Q3 in China imports bounced strongly back, which is a sign of domestic market recovery so I suspect GDP will improve further from here. Another sign of domestic economic strength in China was the September retails sales data which was a good-sized beat. There is a caveat on this though, the YTD number is still well in the negative, so there is a way to go. In a broader picture China's consumers are coming off a strong savings base. This is not necessarily the case in other economies across the globe, domestic consumption will likely recover more slowly elsewhere than it has in China.
The PBOC set the onshore yuan mid-rate more than 300 points stronger today than on Friday. Offshore yuan continues its recovery after the previous weekend's PBOC move.
