Forex news for Asia trading Wednesday 5 June 2019
- China's ambassador to Canada is to leave at the end of the month
- More on China to fine Ford JV for violating anti-monopoly law
- Mnuchin is scheduled to be in Japan for G-20 from June 7-9. Will meet with PBOC head.
- ICYMI - JP Morgan/Markit global manufacturing PMI hits its lowest since October 2012
- Highlights of the Australian GDP data (if you muttered 'lowlights', you're right)
- Larry Summers call for Fed interest rate cuts - more
- China May Caixin services PMI 52.7 (prior 54.5)
- Australian GDP data responses rolling in. Here are two. 1. 'Miserable'. 2. 'Miserable'
- Australia, Q1 GDP: 0.4% q/q (expected 0.5%)
- RBNZ assistant gov sees rates to be broadly unchanged
- PBOC sets USD/ CNY central rate at 6.8903 (vs. yesterday at 6.8822)
- Japan May 2019 PMIs: Services 51.7 (prior 51.8) & Composite 50.7 (prior 50.8)
- RBA July meeting is live … 'in theory' … u/e needs to be above 5.4% for a further rate cut
- On the Australian services PMI that moved up a more measured 0.4 points
- On the Australian services PMI that jumped 6 points in May
- China: China made "stern representations" to Canada after PM Trudeau criticized human rights record
- China's Foxconn has 'offshored' more than 150 jobs from the US to Mexico
- RBA watcher McCrann - says if unemployment rate stays at 5.2% then probably no July cut from RBA
- World Bank lowers its global growth forecast for 2019 to 2.6% (from 2.9%)
- Trade ideas thread - Wednesday 5 June 2019
- Dallas Fed Kaplan - Wants to wait to see if US/Mexico/China tensions increase
- US Commerce dpt. report wants to boost domestic rare earth production (in response the China supply threats)
- Oil - private data shows a surprise build in headline inventory
- The US and Mexico will hold trade talks on Wednesday. Pence presiding.
There were some items to take note of today despite forex rates staying in small sort of ranges.
Top of the list was the news China has levied a fine on Ford's JV in the country. As the trade war between China and the US intensifies its likely such tit for tat niggles wil escalate. On a brighter note, and to inject some four-letter word (h-o-p-e) there was also news US Treasury Secretary Mnuchin would meet with PBOC Governor Yi Gang in Japan this week, perhaps paving the way for a Xi-Trump meeting at the G20 (also in Japan) later this month.
As I update there is more news on China, this time in relation to Canada. China's ambassador to Canada is reportedly leaving at the end of the month. Icy CAD-CNY relations slide further.
The data focus for the session was on Australian Q1 GDP, which came in at a miss, a disappointing 0.4% q/q. Slowest growth y/y since the GFC. And a whole stack of other negatives I've already listed in the bullets above. Yesterday's rate cut from the RBA has the Bank well behind the curve. Since Q1, of course, we have seen the global economy suffer from the US trade wars, so the Q2 data is unlikely to be much better. The RBA tells us they are watching labour market developments, as growth slumps you can expect unemployment to rise and thus more RBA rate cuts ahead.
And so to the NZD, which was a bit of a mover in an otherwise subdued field. NZD/USD (and NZD crosses) jumped on comments from RBNZ Assistant Governor Hawkesby that the Bank's view is rates will remain broadly around current levels for the foreseeable future. NZD/USD hit a one month high above 0.6630.
The Australian dollar eked out a few point gain despite the poor data, nudging above 0.7000. USD/CAD has slipped a few pips to under 1.3380.
EUR/USD dropped back a few points early but recovered to be more or less unchanegd on the session. Cable is showing little net change also after a tiny range.
USD/JPY dripped from 108.25 to lows around 108.05 and is not too far from there as I post.
Bitcoin managed not to collapse again today...
Still to come:
