Forex news for Asia trading Monday 24 December 2018
- China will remove its export tariff on iron ore from January 1 2019
- Update on who will likely be the next President of the European Central Bank
- PBOC sets USD/ CNY reference rate for today at 6.9006 (vs. Friday at 6.8825)
- China and the US held another call on trade,the 2nd in a week: “deep exchange of views”
- China's NDRC says will boost support for economy in 2019
- Trader who sold Bitcoin top has covered his short
- US Treas Sec Mnuchin to speak Monday with Fed, CFTC on financial markets
- US Treas Sec Mnuchin confirms he called CEOs of 6 largest banks (here's why)
- Trade ideas thread - Monday December 24
Weekend:
- One year after the big US tax cut, an investment boom fails to materialize
- White House goes into damage-control mode on talk of Trump firing Powell
- Trump asks Mattis to leave early, will replace him with top deputy Jan 1
- UAE says OPEC+ could mull deeper cuts if 1.2 mbpd not enough
- Video: Why it's time to buy gold
- Trump discussed firing Fed Chairman Jerome Powell - report
- US government shuts down in stalemate over Trump's border wall
US politics again provided a shove for financial markets. Over the weekend US Treasury Secretary Mnuchin relayed that US President Trump never suggested firing Federal Reserve Chair Powell. White House budget director Mick Mulvaney (who will be the new chief of staff) followed up by saying President Trump does not believe he has the authority to fire Powell. Oh, the US government shut down too.
USD/JPY was marked lower first thing Monday here in Asia (ie 'flight to safety' yen higher) on a 'where there's smoke there's fire' basis.
As NZ and Australian forex markets opened (on a holiday-thinned week) the Gong Show continued. US Treasury Secretary Mnuchin tweeted that he had called the CEOs of six major banks and was told they had ample liquidity for loans and market operations. Trader responses to this included 'Huh? Does this mean there might be a problem?' (no one had actually expressed any concern about bank liquidity) to 'Ah, so the rumours a fund (or funds) blew up last week are true?'. Mnuchin seemed to be answering a question no one had asked.
The Treasury Secretary went further, saying he had convened a meeting of the President's Working Group on Financial Markets for Monday. In case you are wondering, this group is affectionately known as the Plunge Protection Team and are active in times of market turmoil.
As the morning progressed initial USD/JPY moves were retraced, from lows under 110.90 back towards its late Friday level circa 111.20.
Other currencies managed to move higher on the session against the USD also. Cable was notable for stacking on 60 or so points from its late Friday level, while EUR, AUD, NZD, CAD are all higher too against the dollar. Gold is up around 8 USD.
As the session progressed reaction to the weekend news and Mnuchin's tweets faded away, and the where there is smoke there is fire seemed to morph into a storm in a teacup. China removed some tariffs, and holiday lethargy may both well have played a part also.
To all, have a very merry Christmas!
