Forex news for Asia trading Wednesday 29 May 2019
- Australia's international economic competitiveness ranking is 18 of 63
- MUFG expect USD/yuan above 7. Eventually.
- AUD/USD levels (support, resistance) & comments
- Huawei has asked a federal court in Texas to rule US equipment ban is unconstitutional
- NZ government budget leak - government says it was ‘hacked’
- RBNZ Gov Orr speaking - nothing on his economic outlook nor on monetary policy
- PBOC sets USD/ CNY central rate at 6.8998 (vs. yesterday at 6.8973)
- NZ data - May business confidence improves to -32.0 from -37.5 previously
- Japan chief cabinet secretary Suga says its unthinkable to call an arbitrary election
- China press: US will rue forcing China's hand on rare earths
- US yields fell hard overnight - Asia following along. Australian 10 year yield under the cash rate.
- BOJ Kuroda speaking - says nothing is perfect
- You heard the one about a Chinese man and two Americans walk into a room?
- China PMIs are due this week (Friday) - early indications are showing China's economy weakened in May
- Japanese PM Abe "Flirts With Early Election Ahead of Japan Sales Tax Increase"
- UK services companies report fall in work volume, have a negative outlook
- BRC Shop Price index for May: +0.8%% y/y (prior 0.4%)
- Here is another RBA cash rate forecast - 3 cuts coming up by the end of the year
- JP Morgan forecast the RBA to cut rates 4 times by mid 2020
- More on the US currency manipulation watch list - China
- More on the US currency manipulation watch list - Japan
- US FX currency manipulation watch list
- UK press report Corbyn set to announce he support a second Brexit referendum
- Italian Deputy Prime Minister Salvini called on the ECB to “guarantee” government debt
- UK housing market on the move - if the politicians will finish with the Brexit debacle that'd be great, TIA
- Reason #487 to not go to Ottawa - you get a summons from the Canadian parliament.
- RBNZ says risks to the financial system remain elevated
- Trade ideas thread - Wednesday 29 May 2019
USD/JPY dropped 20 points and bounced back 25 or so, covering some ground on otherwise lacklustre Asia session. Market gossip about the place was a barrier option triggered under 122 in EUR/JPY, with the selling dissipating once the level was reached and the pair recovering just a touch to be circa 122.10+ as I update.
USD/CHF extended its US afternoon drop away, not by much and still well above its lows in Europe on Tuesday.
EUR/USD, cable and USD/CAD are all little changed.
There were more forecasts for the RBA out today, JP Morgan with an aggressive '4 cuts' coming ahead. The bank sees the RBA cutting by 0.5% by Q3 2019 and then another 0.5% into 2020 thereafter. The Australian dollar didn't do too much, and has been described as resilient (by me). I wouldn't take too much comfort in the AUD stability, its more likely a positioning function (wary shorts taking some in) than anything much more than that. As soon as its through sucking us in a grind lower should eventuate.
Why the long face? Well, the fall in US yields on Tuesday carried over into Wednesday in Asia and of course, Asia followed suit. The Australian yield curve inverted, with the benchmark 10-year bond yield dropping under the RBA cash rate (1.5% ... at least until Tuesday ;-) The South Korean stock market turned negative for the year. For those who like to at Korea as a global bellwether ('canary in the coal mine' is how its often put), not a good sign. NZD lost a few points after the sad business cnfidence data. Not as sad as it has been but -32 is not good. The details of the report offered little reason to be cheerful either, although 'activity' did tick up a little in the month.
The US declined, again, to name China a currency manipulator ("day 1 promise" stretching on a bit). The PBOC edged the onshore yuan a little lower again, nudging 6.9.
Still to come:
