Forex news for Asia trading Thursday 28 May 2020
- EUR/USD tested its overnight high … does it love when a plan comes together?
- Oil - where we are at
- Australia Private Capital Expenditure for Q1 2020: -1.6% q/q (expected -2.6%)
- PBOC sets USD/ CNY reference rate for today at 7.1277 (vs. yesterday at 7.1092)
- FX option expiries for Thursday May 28 at the 10am NY cut
- New Zealand business confidence (May) -41.8 (vs. prior -66.6)
- South Korea central bank cuts base rate to record low 0.5% (as expected)
- More from RBA Gov Lowe: Repeats negative interest rates extraordinarily unlikely
- HSBC on negative interest rates - may be ignored by forex markets
- RBA Gov. Lowe - evidence so far is economic package is working
- Overnight piece on China to limit coal imports (note that this was news from last week)
- The US mission to the UN is seeking a security council meeting on Hong Kong
- UK Times report UK PM Johnson to go to Brussels in June to meet with EU
- North Korea says it is able to immediately launch a nuclear attack
- New Zealand report that Job numbers fell by a record 37,500 in April
- China embassy says it will take necessary countermeasures against meddling
- White House says Trump will issue an executive order against social media
- Grim update: US Coronavirus deaths are now above 100,000
- US House has the votes to pass the China sanctions bill re human rights abuses against Muslim minorities
- Boeing has resumed 737 Max production at its Washington plant
- On the politics front today - China expected to pass Hong Kong law
- Trade ideas thread - Thursday 28 May 2020
- Private survey data shows a surprise large build in headline crude oil inventory
- More from Pompeo on Hong Kong and China - remote chance of HK autonomy in future
US/China/HK issues intensified during the US session with Secretary of State Pompeo sending his report to Congress arguing Hong Kong is now under the purview of China and no longer qualifies for special status treatment by the US (that's the in a nutshell version). If this generated much concern in markets it was not too evident with currencies here today during the Asian timezone tracking more or less sideways with an upward hint. (As I update the governing body of Hong Kong have adjourned after rising tensions between pro-democracy and pro-China establishment factions).
EUR was a good performer, testing its overnight high although it has backed off a little since. Cable has not done much.
AUD/USD is slightly higher. RBA Governor Lowe spoke in a parliamentary committee hearing today. He was not his usual sanguine self, but he was not overly downbeat either - he emphasised keeping monetary policy accommodative and urged continued fiscal support for the economy. AUD dipped slightly ahead of the main data release for the session but soon recovered. The capex data was not much of a surprise, down (not as much as expected) for the headline, and estimates ahead also lowered in the face of the COVID-19 uncertainty.
The Reserve Bank of Australia did not buy any bonds for its QE program today, this is 3 consecutive weeks now of zero bonds purchases by the Bank.
Stay tuned for expectations China will pass the HK-impacting security law some time today, this will come as no surprise but will confirm the new law. Also a heads up for US President Trump to take action on Thursday (US time) to punish Twitter for flagging his deceptions on the platform.
The PBOC weakened the onshore yuan again today though not by as much as might have been expected. The Bank of Korea cut its benchmark rate to a record low 0.5% and is signalling using other tools such as QE ahead.