Forex news for Asia trading Tuesday 2 February 2016

  • Here is some great news on Friday's NFP due from the US
  • RBA decision as expected - response of the Australian dollar
  • RBA announce rates stay on hold
  • China - Caixin reports that over 500 trust products at default risk
  • Comments from Goldman Sachs chief economists on US recession probability
  • China - Did the PBOC signal overnight that more yuan weakness is on its way?
  • OPEC can save oil, right? Nope, "It may already be too late" say Goldman Sachs
  • NZD/USD traders - heads up for the dairy auction during London time
  • China stockmarket opening indications - Shanghai Comp to open flat
  • PBOC open market operations today: Injects 100 bn yuan today
  • PBOC sets USD/CNY mid-point today at 6.5510
  • Japan - Comments from new economy minister, same old chestnuts
  • Contrasting views on the yuan: 'Wouldn't fall far" vs. "Growing risk to drop"
  • China top hedge fund: Wage gains to slow abruptly, profits fall, will hit retail-sales
  • NZ data - ANZ Commodity Price Index (January): -2.3% m/m(prior -1.8%)
  • Greek debt repayments will be difficult says ex-fin min
  • Poor communication from the BOJ is losing them effectiveness and credibility
  • RBA preview: No cut today, but a question on the AUD
  • Calling on contrarians, you're gonna love this. 1 of 29 calling for an RBA cut today
  • Australian data - Weekly consumer sentiment: 111.2 (prior 112.2)
  • Trade ideas thread for Tuesday 2 February 2016
  • PBOC academic warns on an abnormal surge in January new loans in China
  • RBA decision & statement today. But the most important AUD clue will be missing.

A weaker USD/JPY for nearly the entire session, although the fall wasn't huge, its down around 40 points or so (a touch more at one stage ... as I update its making new lows, down 50+ now). EUR/JPY is down a little also, a small gain for EUR/USD helping it to remain steadier.

Cable and USD/CHF did little.

In China today we had the PBOC step back into 'stronger yuan' mode after yesterday's minor hiccup, USD/CNY was set a little lower today while open market operations injected a decent 100bn yuan into the market. The Shanghai Composite opened near flat and has gained for the session to be posting up over 2% as I update. The Nikkei wasn't so strong though.

For the AUD it was a wait for the RBA decision. There was a near unanimous expectation of 'on hold', & the unanimity was well founded, the decision came in as expected. As did the Statement accompanying the decision, with positive developments on the domestic front offset by concerns over what's happening in offshore economies and markets. RBA governor Glenn Stevens faces a delicate situation, the domestic improvements in the economy will threaten to send the AUD higher if we can get some stability in offshore markets (global 'risk off' moves will harm the AUD, of course). Stevens' statement today tried to walk a fine line between bank confidence on the domestic front and talk of concerns offshore. In highlighting the offshore concerns Stevens has tried to play down the strength of the Australian economy. Stevens does not want upside pressure on the AUD.

Ahead of the RBA decision the AUD was reasonably stable, trading a 20-odd point range and little changed overall. It popped on the announcement but has since come back quite heavily, plumbing new session lows as I update. Barring an offshore 'risk off' development I suspect we'll see the buyers in again circa 0.7065/70.

NZD/USD followed a similar pattern, stable for most of the session and now lower with the AUD. We'll see a dairy auction during London time which should provide impetus for a move. Expectations are for a lower dairy price index.

Gold had an early gain for a few dollars, but lower as I update; oil has lost a little on the session also.

In US politics, Clinton and Cruz won their respective Iowa caucuses (Added: Late edit ... some reports the Clinton / Sanders race is still too close to call)

Regional equities:

  • Nikkei -0.78%
  • Shanghai +2.36%
  • HK -0.79%
  • ASX -1.21%

Still to come: NZD/USD traders - heads up for the dairy auction during London time