Forex news for Asia-Pacific trading on October 22, 2018:
- China releases household tax cut plan
- RBA's Debelle: We have an open mind on what constitutes full employment
- Yuan midpoint set at 6.9236 vs 6.9290 prior
- BOJ survey shows improving demand for household loans
- Trump is focused on creating more leverage, wants China to suffer more - report
- May to tell parliament 95% of withdrawal agreement settled - report
- Khashoggi spoke to Mohammed bin Salman directly moments before he was killed - report
- Swiss blockchain company Trade.io hacked as TIO tokens go missing
- Italy expects EU to reject budget on Tuesday - report
- BOJ's Amamiya: Japan digital currency isn't coming any time soon
Markets:
- Gold float at $1227
- Shanghai Composite +4.1%
- CAD leads, AUD lags
The FX market started with some GBP selling and then moved onto commodity currencies but all the moves were modest and they have reversed.
The story so far is Chinese stocks. The Shanghai composite is 8% off Friday's lows as the response to the coordinated jawboning along with the weekend household taxes drives a major bid. If it holds, it will be the biggest two-day rally in three years.
So far the spillover to FX has been modest but there are improving signs. US stock futures are flat after falling at the open.
Looking ahead, you would expect to see the positive sentiment spill over but those same markets didn't exactly track the 30% drop in Chinese stocks this year through last Thursday.
Thought for the day: In traditional wars, countries spend a tremendous amount of money to win and keep morale high at home. Why wouldn't they do the same in a trade war?
