Forex news for Asia trading Tuesday 3 January 2017
- Overnight yuan rate in Hong Kong climb to the highest since September 2016
- Federal Reserve's FOMC voters change for 2017 - who's out & who's in
- China's SAFE increasing scrutiny of FX purchases, closing loopholes
- Q4 GDP: "Singapore's economy posted surprisingly strong growth"
- More on the PMI: China's factory activity picked up more than expected
- More on China's economy could grow 6.5% in 2017; devaluation could stabilise yuan
- China - Caixin Manufacturing PMI for December: 51.9 (expected 50.9, prior 50.9)
- China - Yuan basket increased from 13 to 24 currencies on January 1 this year
- PBOC sets USD/CNY central rate at 6.9498 (vs. Friday at 6.9370)
- China press: China should consider a one-off devaluation to the yuan
- JP Morgan's outlook for 2017 - "world grows a little faster in 2017 than in 2016"
- Singapore Q4 GDP hugely beats estimates, beats government forecasts also
- ANZ sells stake in Shanghai Rural Commercial Bank for $1.8b
- China Securities News: Economy expected to grow about 6.5% in 2017
- Australia - CoreLogic House Prices for December: +1.4% m/m (prior +0.2%)
- The three seasonal trades to watch in January of 2017 (Gold, EUR & USD)
- Australia - Manufacturing PMI for December: 55.4 (prior 54.2)
- Want more holidays? OK then, but be back for NFP data due Friday (preview)
- ICYMI - there was a heap of PMI data out in Europe on January 2
- Trade ideas thread - Tuesday 3 January 2017
- BOJ likely to extend their 7 year old free money program
The Australian dollar squeezed higher today, through 0.7200 and then running above 0.7220 before finding some sort of resistance. There was some perceived positive news for it from China, with the decent official manufacturing PMI (which was out on new Year's Day, result here) being confirmed by a big beat for the private-survey (Caixin) manufacturing PMI:
Caixin Manufacturing PMI for December: 51.9 (expected 50.9, prior 50.9)
- That is a big beat
- And is its highest since January of 2013
- The 'output' component came in at its highest since January of 2011
Whether it was the Chinese data or not, the AUD squeezed higher. NZD/USD went along for some of the ride, its higher on the session also. While Australia, Singapore and HK markets were back from holidays today, New Zealand and Japan were still out. Thinner than normal liquidity was a factor in the moves today.
Other currencies were not nearly so active. USD/JPY is barely changed on the session. Japanese markets were closed again today for a holiday (they reopen on Wednesday, local time) so that may be the excuse.
EUR/USD and GBP/USD edged slightly higher with USd/CHF edged down a fraction. A net weaker greenback across the board.
Note, though, a real weakling loday on the session was the Malaysian Ringgit, down to its lowest against the big dollar since 1998. Elsewhere also, Singapore Q4 GDP surprised strongly to the upside, surging q/q after the contraction in Q3.
The PBOC weakened the CNY against the USD today, but more notably the bank drained a net 150bn+ yuan of liquidity today. This resulted in yuan borrowing rates surging in HK:
Tight liquidity in money markets may well be driven by the PBOC's desire to support the yuan against expectations of a devaluation (refuelled again today by comments from China: More on China's economy could grow 6.5% in 2017; devaluation could stabilise yuan )
Regional equities:
- Nikkei (Japan closed today)
- Shanghai +0.71%
- HK +0.49%
- ASX +1.21%
