Forex news for Asia trading Wednesday 7 December 2016

Our thoughts are with Indonesia today where a pre-dawn earthquake has caused (at most recent count) 25 deaths.

  • Magnitude 6.8 earthquake off Sumatra, Indonesia (subsequently revised to M6.5)
  • Terrible news on the Indonesian earthquake earlier: 18 dead so far

On to the markets. Australian Q3 GDP was the big focus, and it came in at a very, very poor result, the biggest q/q decline since the GFC and the first negative result since March of 2011. The Australian dollar sliced 50-odd points off before stabilising 0.7420/30 (and thereabouts) and then edging back toward 0.7440. Apart from the initial drop the moves since have been muted. There are more details at the links to the data and the response posts. Views for Q4 are leaning towards a rebound, mainly citing the surge in metals prices.

  • Australia Q3 GDP negative and big miss on expected - more analyst responses
  • Does the poor Australian Q3 GDP have negative implications for AAA rating?
  • Australia Q3 GDP negative and big miss on expected - analysts responses
  • Australia Q3 GDP negative and big miss on expected - AUD response
  • Australia Q3 GDP: -0.5% q/q (expected -0.1%, prior +0.5%)

Apart from the Australian action forex markets have been subdued. USD/JPY ground out a few points higher toward 114.30 and since the Tokyo fix drifted back for a retrace and sideways centred around 114.10 or so.

EUR and CHF against the USD are little changed, while GBP is net a few points lower. NZD/USD, too - little changed on the session. Gold, ditto.

Oil popped earlier on private inventory data showing a bigger than expected draw in stocks, but this was not sustained (the price is lower than just prior to the release).

The People's Bank of China weakened the onshore yuan against the USD substantially today.

More headlines:

  • "The Yen's Swift Decline Could Go Too Far"
  • Trade ideas thread - - Wednesday 7 December 2016
  • BOJ Deputy Governor Iwata: Won't hesitate to take additional easing steps
  • PBOC sets USD/CNY mid-point today at 6.8808 (vs. yesterday at 6.8575)
  • Morgan Stanley make the case for USD/JPY longs into 2017: Rationale, Targets
  • Japan - Reuters Tankan: Manufacturing index +16 in Dec. (+14 in Nov.)
  • Australia - Construction PMI for November: 46.6 (prior 45.9)
  • RBNZ's Wheeler: Expects inflation back in target band by Q4
  • OIL - private inventory data shows bigger than expected draw in stocks
  • NZ data - ANZ Job Ads for Nov. +2.9% m/m (prior +0.6%)

Regional equities:

  • Nikkei +0.55%
  • Shanghai +0.10%
  • HK +0.35%
  • ASX +0.86%

Still to come:

  • China data still to come today, through Friday: FX reserves, trade balance, CPI

China November FX Reserves data is due today some time ... the trend since mid-2014 has been down:

More: