Forex news for Asia trading Friday 26 August 2016

  • China x3: Return to reform mode, Weakening business sentiment, Curbing property
  • China's NDRC says 'big room' to guide interest rates lower
  • Japan inflation data earlier today (biggest annual fall in three years)
  • Fed’s George wants to raise short-term rates to around 3% over next 2 or 3 Years
  • This is turning into a typical pre-NFP session in Asia
  • PBOC sets USD/CNY mid-point today at 6.6488 (vs. yesterday at 6.6602)
  • Reports of large explosion in Belgium
  • Fed's Kaplan repeats the Federal Reserve should raise rates patiently & gradually
  • Here is the agenda for speakers at Jackson Hole
  • If you're watching the USD/JPY waiting for the Japan CPI data to hit ...
  • CBA expects Yellen to be dovish, thus bullish for the AUD/USD
  • Fed's Fischer says the Federal Reserve is discussing the issue of overheating
  • Japan Headline CPI: -0.4% y/y (expected -0.4%)
  • Fed's Williams says the Federal Reserve is going to keep running the economy hot
  • What to expect from Yellen's speech? Dovish ... Nothing ... Hawkish?
  • Trade ideas thread - Friday 26 August 2016
  • G20 Communique is said to show less anxiety on Brexit

A session of small ranges as the market awaits Janet Yellen's speech at the Jackson Hole symposium on Friday morning (10am NY time, 1400GMT).

Data flow was once again light, although we did get the monthly CPI readings from Japan. These were very disappointing for the Bank of Japan and administration more broadly, far from approaching the 2% target core consumer prices fell for a fifth straight month and registered their biggest annual drop in more than three years.

The BOJ is conducting a review and assessment ahead of their next meeting (September 20 and 21) and while Kuroda and gang insist there is more they can do, what they've done so far has not got them close to their 2% inflation goal.

USD/JPY traded quietly into and over the data release, and then a few minutes later fell 30 or so points (from circa 100.55 to under 100.40 briefly).

EUR/USD ticked a few points higher through the session here, while USD/CHF dropped a few points. AUD and NZD (against USD) also found a few extra points

There were a few comments about the place from central bankers on the sidelines ahead of the Jackson Hole symposium.

Regional equities:

  • Nikkei -1.12%
  • Shanghai +0.57%
  • HK +0.60%
  • ASX -0.19%

Still to come:

  • At 0500GMT the Bank of Japan release their own measure of inflation, which is a national measure excluding fresh food and energy. Expected is +0.7% y/y, prior 0.7%. The official CPI data came out earlier (Headline CPI -0.4% y/y vs. an expected -0.4%)
  • Here is the agenda for speakers at Jackson Hole