Forex news for Asia trading Monday 22th February 2016

Big Bad Boris' Brexit GBP bash:

  • Boris back Brexit - his reasons for wanting to exit Europe
  • Here's the 'Boris backs Brexit' news

China

  • China press: There is still a need for a cut in the reserve requirement ratio (RRR)
  • ANZ on the Chinese yaun - likely change in how the mid point is being set each day
  • People's Bank of China (PBOC) sets yuan reference rate at 6.5165
  • PBOC injects 70bn yuan through OMOs today
  • China - iron ore, rebar both opening higher

Japan

  • Japan data - Flash manufacturing PMI for February: 50.2 (expected 52.0)
  • BOJ's Kuroda: Cites oil price falls, China for mkt instability
  • Heads up - BOJ's Kuroda to appear in parliament today
  • OECD's Tamaki: Japan must raise potential growth rate

  • Reuters survey shows vast majority of firms in Japan expect wage rises of less than 2

Australia / New Zealand

  • Australia's ongoing tax cut boosting savings and discretionary spending
  • Plenty of Australian politics today - discussion on voting reforms, bring fwd budget
  • Aussie TV show predicts 50% house price decline (Insert LOLs here)
  • NZ data: January Credit Card Spending 8.9% y/y (prior +7.4%)
  • BNP on the AUD/USD: Looking for it lower
  • Another Australian bank hikes rates - cites "higher funding costs"
  • ANZ forecasts for US, Japan, Europe, China
  • RBA's Debelle laments fixed interest market liquidity
  • Moody's on GCC banks: Extended low oil price environment to challenge resilience
  • Need something else to worry about? The "Next FX scandal"
  • $7 million lost in FX broker's 'simple Ponzi scheme'
  • Weekend - Iran has managed to boost exports by 0.5mln bbls/day
  • Trade ideas thread for Monday 22 February 2016
  • Monday morning Forex prices, early indications 22 February 2016

Weekend:

  • Greece could get gradual debt relief from EU
  • UK's Cameron says leaving the EU would be a "leap in the dark"
  • Bye-bye Bush as Trump and Clinton win further backing
  • UK referendum on EU to be held 23 June 2016
  • China ousts its head of securities regulation
  • The EU-UK deal: Read all about it. Full details here.
  • Cameron says his deal makes the UK "special". Is that really so?
  • UK's Cameron gets a "unanimously agreed" deal from Europe - What now for the pound?

The week ended with GBP being bid up on the deal British PM Cameron wrangled from Europe, but it started with a tumbling GBP as popular British politician Boris Johnson (Mayor of London) came out in support of Britain leaving the European Union.

There is going to be plenty more intrigue on this as Boris' remarks will be filtered through the perception of his desire for the top job in British politics; there is more to come indeed. Stay tuned for Mike and Ryan to weigh in (errr, literally .... now I'm in trouble ;-) ).

GBP was marked lower as the early FX market got going. Those who join me here at ForexLive each week for the early price movements will attest, I am a broken record in warning about the dangerously thin liquidity as the week opens, leaving currencies vulnerable to extreme movement on not a lot of volume. I stuck a chart of the early movements into this post, here, which gives a picture of the violent moves we can get on Monday morning even pre-New Zealand. And then it gets worse until it gets better when Tokyo, Singapore and Hong Kong eventually get active.GBP showed a bit of spunk, but 1.4300 proved too much for it on the bounce and it has since traded 1.4250/1.4300 ish as we await further action from Europe and the UK.

Gilts looked shaky, as did the FTSE futures.

Elsewhere, the yen lost ground today, a rallying Nikkei helping USD/JPY and some yen crosses higher. EUR and CHF lost a little ground (against the USD, they look like OK compared to GBP, of course).

AUD/USD and NZD/USD ticked higher, AUD toward recent highs yet again ahead of 0.7200.

China's USD/CNY fix continued volatile, the PBOc added a good chunk of liquidity to money markets via 7-day reverse repos, chatter continued surrounding the potential for an RRR cut, iron ore continued its rebound in Chinese markets, and Chinese stockmarkets added some fat. MNI's China Business Indicator came in at 49.9 in February (from 52.3 in January). Tumbleweeds on that one.

It wasn't a day notable for much in the way of news apart from Boris.

Regional equities:

  • Nikkei +1.16%
  • Shanghai +2.04%
  • HK +1.11%
  • ASX +1.04%

Water-cooler post of the day:

  • Aussie TV show predicts 50% house price decline (Insert LOLs here)