Forex news for Asia trading Thursday 8 December 2016

  • Moody's: Australian banks' funding stability improving - buffer is strong capital levels
  • Honda to invest around 3 bn yuan ($436 million) in a new factory in China
  • China trade balance for November: USD +46.3bn (expected $46.90bn)
  • China trade balance for November: CNY 298.11bn (expected CNY320.00nn)
  • WSJ on 'China’s Banks Are Hiding More Than $2 Trillion in Loans'
  • "China Set to Rescue Australia Economy at Just the Right Time"
  • "The resilient Australian dollar - how long will it last?"
  • People’s Bank of China sets yuan reference rate at 6.8731 (vs. yesterday at 6.8808)
  • Federal judge lifts order that had allowed Michigan's recount, effectively ending it
  • New Zealand - Half-year Economic and fiscal update out now
  • Australia Trade balance (October) $A -1,541 (expected $A -610m, prior $A -1227m)
  • UK data - RICS house price balance (November): 30%(expected 26, prior 23)
  • Japan (final) Q3 GDP: +0.3% q/q (expected 0.5%, preliminary was 0.5%)
  • Japanese firms warn of global trade contraction under Trump presidency
  • Murmurs that China to tighten rules on European firms repatriating profits
  • The focus will be on the ECB Thursday - here's a preview (& EUR/USD view)
  • Trade ideas thread - Thursday 8 December 2016
  • Moody's affirms Italy ratings, changes outlook (to negative from stable)
  • Australian Treasurer says govmt 'continues to engage' with S&P on AAA rating
  • Japan to tell big companies to pay subcontractors in cash

EUR/USD popped up through its US timezone high in Asia today with similar moves in other currencies against the big dollar. CHF, GBP, AUD and NZD all carrying through to fresh highs compared with the US trading time.

News flow was light, nothing to drive the USD, this was continuation. But still, a few notable items today.

Japanese Q3 GDP was released (preliminary Q3 data was out in November, today's was the final, revised version for Q3). Results were much weaker than the preliminary data (private consumption the only metric coming in better) with weaker capex and inventories weighing heavily. The yen wasn't that fussed, gaining on the session against the USD.

We got more Australian data today, this time the first trade balance read for Q4 (October month data). It came in at a huge miss, a much wider trade deficit than expected. As I said earlier:

  • If you were following along with the responses to the Australian GDP (Q3) yesterday you'll know that many of the analysts expect Q4 GDP to bounce back quite strongly, one of the reasons is a rebound in exports, at higher prices (rallying commodity prices). Well ... October is the first month of Q4 and here we are with a big miss on trade balance. So, that's not a good start.

The AUD dipped back on the data but the fall was limited and after a couple of hours of sideways it made a new high on the session. Meanwhile NZD ticked more steadily higher through the session. There was some early supportive news from dairy giant, Fonterra, saying at its annual meeting in Darfield today that farmer payout this season will total $6.40/ kilogram of milk solids.

Also from New Zealand, it looks like all the contenders to be the new PM have dropped out in favour of current New Zealand finance minister Bill English. So, Mr E. looks like he is the new main man there - note though there is still the party vote to come on December 12.

Regional equities:

  • Nikkei +0.77%
  • Shanghai -0.05%
  • HK +0.65%
  • ASX +1.22%

Still to come: Its European Central Bank meeting day, with the announcement due at 1245GMT (1.45pm in Frankfurt).