Forex and Bitcoin news for Asia trading Wednesday 23 May 2018
- Australian data out earlier was a big miss - recap
- Comments from Morgan Stanley on NZD - looking for a bounce
- Australian Construction Work Done Q1: +0.2% q/q (exp +1.3%)
- RBNZ McDermott: Currently no prospect of unconventional monetary policies
- PBOC sets USD/ CNY reference rate for today at 6.3773 (vs. yesterday at 6.3799) (note the Bank net drained liquidity today too)
- Australia: Westpac leading index for April: +0.19% m/m (prior -0.22%)
- Japan: Flash reading for May manufacturing PMI: 52.5 (prior 53.8)
- Trump says Ways and Means Committee working on more tax cuts by Nov
- Goldman Sachs: Rising frequency of "flash crashes" … an important early warning sign
- RBNZ says it not projecting a significant decrease in the cash rate
- "AUD still has upside from here", and "good news for New Zealand"
- USD/TRY on the move
- Trade ideas thread - Wednesday 23 May 2018
- New Zealand - Fonterra increases 2017/18 milk price forecast
- Oil - private data shows in US crude inventory
Funny old session here in Asia today. The net result is lower yen crosses.
There was continued selling of the Turkish lira very early in the session (pre-Tokyo, at the worst liquidity time of the session). Note that the lira has been week for days and weeks, the selling was nothing new. I posted this chart during the session, to give a clue about how persistent it has been:
Accompanying the lira selling was a little yen buying (USD/JPY dropped a few points as USD/TRY surged). This was related to JPY/TRY positioning (short yen, long lira) being unwound further.
OK, now all this was early in the session ... prior to the bigger moves.
What bigger moves? OK.
- The USD strengthened nearly across the board. A notable outloier was the yen, which strengthened against the USD.
- EUR/USD fell from around 1.1785 to around 1.1750 (as I update)
- AUD/USD from around 0.7580 to under 0.7540.
- Cable from 1.3440 to 1.3400.
- USD/CHF from 0.9920 to 0.9930.
- NZD .... let me come back to that one.
Apart from the TRY move the other 'explanations' around the place related to news that had been about since the US session:
- Trump expressing negativity on China trade issues and also casting some doubt on whether the meeting with North Korea would proceed
This was cited as a reason for the move out of 'risk', and indeed Asia stocks were mainly lower in line with falls on US equity markets.
On more specific news ... for AUD we got a miss on headline 'construction work' (which will be a negative for Q1 GDP (data due in a couple of weeks time).
OK, back to the kiwi.
It had traded higher early in the session, Fonterra raising its milk price forecast did it no harm. We then got RBNZ headlines, related to a paper they had published (see bullets above). Despite the paper being not concerned with current policy nor the outlook, it did trigger some nervous NZD sellers. We then got headlines from the bank's dep gov McDermott (see bullets above) which again being unrelated to current policy nor outlook was read as bearish yet again. Of course, NZD has been heavy for a few weeks now and the broad USD strength elsewhere didn't help either.
Still to come:
