Forex and Bitcoin news for Asia trading Friday 29 June 2018
- EU summit reaches a deal on immigration - Italy happy - euro higher
- EUR/USD up - EU reaches immigration deal
- Rumours of an immigration deal at the EU summit dinner
There was movement in Asia forex today centred on a sharp rally for the euro and spreading to other risk currencies and to equities also.
Long story short was that late in the European day on Thursday Italy blocked all EU summit agreements, yes ... all ... because they would not accept the deal reached on immigration. I had warned on Thursday that immigration would be a sticking point at this summit.
EU leaders went to dinner without an agreement but someone may have slipped a mickey into the pasta or something because after dinner (5 hours after dinner!) we reported here on ForexLive that a deal had been reached. This was confirmed 2 hours later and EUR spiked hard, driving 50 points+ higher.
So once again the EU reach an agreement after many hours of talks and once again politics drives a move in the euro. I should probably file this post in 'education' 'cause if you are surprised that politics drove the euro today was (another) lesson. The Union has 28 sovereign state members and the EUR has 19 of them. Of course politics will drive it from time to time!
Elsewhere:
- UK PM May says wants deal on Brexit that will work for both EU and UK
- EU summit agrees to extend economic sanctions against Russia for 6 months
- ICYMI: China to allow more foreign investment (this should help ease trade tension)
- Australia - Private sector credit for May: +0.2% m/m (expected 0.4%)
- PBOC sets USD/ CNY mid-point today at 6.6166 (vs. yesterday at 6.5960)
- Bank of Japan cuts its JGB buys in 5-10 years
- China continues to tighten up restrictions on real estate loans
- What to expect next from the big 4 central banks: Fed, ECB, BOJ, BoE
- Bitcoin - the beatings will continue until morale improves
- Japan Industrial Production for May (preliminary): -0.2 % m/m (expected -1.0%)
- Japan data - Tokyo CPI for June, headline is 0.6% y/y (vs. expected 0.4%)
- Japan employment report: May unemployment rate 2.2% (vs. 2.5% expected)
- New Zealand Building Permits for May: +7.1 % m/m(prior -3.7%)
- NZ data - consumer confidence falls (only small) in June: 120 (vs. 121 prior)
- Sellers still present in EUR/USD - month-end, political wariness. Levels.
- Police deploy counterterrorism teams to media organizations around New York City
- Trade ideas thread - Friday 29 June 2018
AUD popped with the EUR, as did the embattled kiwi; GBP, CHF, CAD, equity indices ... all went along to a great or lesser extent for the ride.
I will note a development for the AUD that may have contributed - the opposition party (in Australia's Federal parliament) backed off on some of its objection to company tax cuts. This should spur passage of the cuts for business, but there is still work to be done.
What else? Well, we got Tokyo inflation data today, which came in slightly above the median estimate. Not anywhere near target, of course, but a wee bit better for the BOJ. Industrial production figures came in at a beat, so some good eco news for the admin and Bank. The BOJ trimmed its purchase of JGBs today (see bullets above). In the past this has resulted in the yen strengthening as every man and his dog yelled 'early exit'. Silly duffers. Today the yen moved in the opposite direction! USD/JPY moved higher later on the EU news (not by much) also.
The People's Bank of China cut the price of the onshore yuan at the reference rate setting again today. The pace of the fall was slower than it has been the prior two days. 6.7 remains a focus for the market, but there are signs of China being more accommodating on trade tensions (ICYMI: China to allow more foreign investment (this should help ease trade tension)) so be wary of further CNY falls from here I reckon.
Oh yeah - heads up for China PMIs over the weekend (I'll get a preview up soon)
Still to come:
