Forex news for Asia trading Monday 3 February 2020
- Citi cuts its forecast for oil in Q1 of this year by $15 a barrel
- China Commerce Ministry says many export companies starting to resume production
- Australian monthly inflation gauge for January, headline is 0.3% m/m (prior was 0.3%)
- PBOC adviser says the chance of a rate cut on Feb 20 has increased significantly
- Plenty of reassurance out of China - NDRC says economic impact of outbreak to be minimised
- China Industrial Profits for December -6.3% y/y (prior 5.4%)
- China cuts rates
- China data - Caixin/Markit Manufacturing PMI for January 51.1 (expected 51.0, prior 51.5)
- China stock markets open down nearly 9%
- PBOC sets USD/ CNY reference rate for today at 6.9249
- FX option expiries for Monday February 03 at the 10am NY cut
- New Zealand expects slower GDP growth this year - coronavirus a new risk to economy
- Japan's January manufacturing PMI improved, but South Korea's fell. Both are in contraction.
- Job ads data from Australia for in January come in stronger
- Australia data - building approvals for December -0.2% m/m (expected -5.0%)
- Fitch has affirmed Japan's rating at A with outlook stable
- Coronavirus - Japan PM Abe says the country has begun developing rapid diagnostic test kits
- Coronavirus economic hit has seen demand for oil in China drop 20%
- Updating the toll from coronavirus 3 February 2020
- Here's an RBA preview looking for a cash rate cut - meeting Tuesday 4 February 2020
- Australia CoreLogic house prices for January: +0.9% m/m (prior +1.2%)
- Preview of the RBA interest rate meeting on Tuesday 4 February 2020 (& AUD impact)
- Australia - CBA/Markit Manufacturing PMI (final for January) 49.6 (up from preliminary of 49.1)
- Australia - AiG Manufacturing PMI for January (prior 48.3)
- China's Global Times reports 30 separate measures being taken today to stabilise China markets
- China state media latest coronavirus numbers: 2,103 new cases in Hubei on Feb 2, and 56 new deaths
- Australian 10 year (and 3 year … nearly) bonds falling to lowest ever yield
- Trade ideas thread - Monday 03 February 2020
- Report that under a hard Brexit Nissan would pull-out of Europe, ramp up in the UK
- Brexit - UK PM Johnson prepared to quit trade talks with the EU
- China will limit short-selling on market reopen on Monday
- Magnitude 5.2 earthquake hits in central China
- AUD/JPY continues slide. A look at implied volatility next week
- PBOC to inject cash funds today
- Monday morning open levels - indicative forex prices - 03 February 2020
Weekend:
- HIV drugs show great promise in treating coronavirus patients
- China unveils economic measures in effort to promote calm with markets set to re-open
- 44-year-old coronavirus patient dies in Philippines -- first outside China
- OPEC+ technical committee will meet Feb 4-5 to review coronavirus
- Hubei province reports 1,921 new coronavirus cases
- New York City has its first suspected case of coronavirus
- If you are wondering about where Zero Hedge is on Twitter - the site has been banned
- What's the number one thing to grasp in FX?
The focus for the Asian time zone today was the reopening of financial markets in China after the long, and extended, lunar new year holiday.
Commodity futures dropped heavily, many to limit down including iron ore.
Stock markets, too, opened sharply lower with thousands of individual stocks trading limit down. The drops surprised no one, futures markets covering China assets that had remained open last week (in Singapore, for example) had indicated lower and the moves today were mere confirmation.
Shanghai Comp:
The People's Bank of China injected cash into the markets, one of the many support measures Chinese authorities out in place (with more in the pipeline) and set in place a 10bp rate cut for these reverse repos. The NDRC and Ministry of Commerce were also vocal with support. More on all this in the bullets, above.
As I post a look at how China markets have fared during the morning session (afternoon yet to come):
- Shanghai -8.1%
- Shenzhen -8.3%
- CSI 300 -8.2%
- ChiNext -6.5%
- Iron Ore -8%
- Copper -6.6%
- Steel -7.5%
The yuan weakened today. The PBOC reference rate for the onshore was set back to its level of mid-January. CNY weakened further from the setting, USD/CNY to above 7.01 and the offshore traded above 7.01 also.
For the major currencies GBP was a mover. UK PM Boris Johson is to speak on Monday and the text of the speech will contain a threat to 'walk away' from trade negotiations with the EU if he does not get what he wants. Good for the headlines but do bear in mind this is the opening salvo in what promises to be long and drawn-out talks over the next year or so.
USD/JPY has edged just a little higher while EUR/USD is little changed. AUD and NZD also not much change. The RBA meet tomorrow and are widely expected to remain on hold.
