Forex news for Asia trading Monday 3 October 2016

  • BOJ head Kuroda says the bank still has a lot of room left to ease policy
  • FT on Fortescue metals - calling a cyclical upturn in the iron ore market
  • Moody's & Fitch on Japan
  • UK Chancellor Hammond plans to abandon 2020 surplus target
  • Weekly outlook for USD, EUR, JPY, GBP, CHF, AUD, NZD from Morgan Stanley
  • Looking for the USD/CNY setting from the PBOC? Sry, China holidays.
  • NZ Treasury publishes Monthly Economic Indicators
  • More on the Q3 BOJ Tankan report: "Corporate sentiment worse than expected"
  • Kuroda has blown his chance of a second term says Abe aide Nakahara
  • Australia (monthly) inflation gauge: +0.4% m/m (prior +0.2% m/m)
  • Japan - Nikkei Manufacturing PMI (September, final): 50.4 ('flash' was 50.3, prior 49.5)
  • BOJ Q3 Tankan: Large Manufacturing Index: 6 (expected 7)
  • BOJ Gov. Kuroda is heading to the Japanese parliament today
  • Australia data - House Price Index for September: +1.0% m/m (prior +1.1%)
  • Australia - AIG Manufacturing PMI for September: 49.8 (prior 46.9)
  • GBP/USD update ... gap filling after early losses
  • CIBC says get ready for another big slide in GBP/USD. Where to target.
  • 4 small Italian banks for sale - Monday meeting planned to do the deals
  • Ex-BOJ board member Nakahara - yield control, neg rate are mistakes
  • Trade ideas thread to open the week - Monday 3 October 2016
  • German economy minister worried about DB employees
  • UK press say US Justice Department expected to demand $10bn from RBS next year
  • Monday morning Forex prices, early indications

Weekend

  • UK to trigger Article 50 by end-March 2017
  • Note for those trading Australian markets - time zone change this weekend
  • Yuan finally joins the IMF's SDR basket today
  • China Manufacturing PMI (September): 50.4 (expected 50.5, prior 50.4) (The non-manufacturing PMI came in at 53.7, from 53.5 prior)

GBP a big mover first thing on Monday morning here in Asia. There was news over the weekend that UK PM May will trigger Article 50 by the end of March next year. This formally begins the negotiation process for a country's exit from the EU, and once invoked gives the UK up to two years to discuss with the 27 other member states and agree on the terms of its departure.

Cable dropped a quick 70-odd points from late NY levels. GBP/USD has retraced to some extent but has not entirely managed to regain 1.2970.

Apart from GBP crosses EUR and CHF have had small ranges only.

AUD is little net changed on the session, while NZD is a few points weaker overall.

Yen, however, has been more active. USD/JPY tested toward 101 but didn't gett to close before ticking relatively steadily higher to just above 101.60. It gave back 40 or so points and then had a jump higher again, another dip t its lows and has since ticked back to be just below 101.50 as I update. News flow was not seeminlgy a trigger for much of the moves. We have had plenty of chatter about that Bank of Japan Givernor Kuroda is at risk of not getting second term. Which is sort of a bit strange as, 1. His term does not expire until more than 18 months into the future and 2. Does he really want another term? I haven't heard anyone ask him. Its like this guy from Friday, once is surely enough: Please be careful gentlemen: Man bitten by spider twice (guess where ...)

Ove the weekend we also got official China PMIs for September (see bullets above), ANZ following up on Monday saying they expect China's GDP to expand by 6.7% in Q3 on the resilient PMI (underscored by large enterprises).

Regional equities:

  • Nikkei +1.03%
  • Shanghai +0.21%
  • HK +1.36%
  • ASX +0.85%