Forex news for Asia trading 8 January 2020
An early one today if you are just waking up and wondering what has gone on!
- Japanese PM Abe cancels his middle east trip planned for this weekend
- Iran say they'll stop attacking if there is no response from the US
- US FAA has issued an emergency restriction over Persian Gulf airspace
- Reports now that US President Trump is not planning to address the nation
- Iran threatens United Arab Emirates and Israel if Iranian soil is bombed
- US official saying there are no US casualties at this time - (CNN?)
- There are reports of US casualties after the Iranian attacks
- Pentagon confirms more than a dozen ballistic missiles were launched from Iran at US bases
- Pentagon statement - its clear these missiles were launched from Iran
- These recent tweets from Trump loom large
- The next critical thing to watch for are report on what US casualties there are
- US President Trump briefed on the attacks, now meeting with National Security team
- White House says Trump has been briefed on Iraq, is monitoring
- US official confirms missiles been fired from inside Iran at multiple US military facilities in Iraq
- Is this it? Are the US and Iran at war?
- If these rocket attack reports are true, this is a major escalation
- Further reports on that rocket attack on Al Asad Airbase in western Iraq
- (Rumour) Another report of rocket attack in Iraq - on Al-Asad airbase
- Another rocket attack rumour on US forces in Iraq
- Multiple reports now on likely attacks by Iran (update: rumours were false)
Iran launched missiles and rockets at bases in Iraq with US military presence. Initial reports were sketchy and came after false reports a little earlier and thus the market acceptance and then response was a little delayed.
As the news came in it became clear that Iran had hit out against three targets, As I update though there is little news on US casualties. News on this will be important to watch for - it will indicate the likely scale of a US response. Earlier this week US President Trump did warn, though, that he may act 'disproportionately'. Something to bear in mind.
As for markets, the response was as you would expect, higher for yen, gold and oil and lower for equities. However, the response from AUD and NZD to the 'risk off' mood were muted indeed, small losses only and more or less retraced.
CAD was a beneficiary of the higher oil price.
As the dust settled somewhat and there were still no reliable reports on the extent of US casualties markets began to retace the earlier moves, yen and gold both giving some ground back
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While relegated to minor news only on the session, Australian building approval data was a strong beat - this sector has been in the doldrums (still is) but looks to be showing some signs of stability
Other:
- PBOC sets USD/ CNY mid-point today at 6.9450 (vs. yesterday at 6.9690)
- FX option expiries for Wednesday 8 January 2020 - 10am NY cut
- Australian building approvals for November +11.8% m/m (vs. expected +2%)
- This was the best chart from Jeff Gundlach's presentation
- Brexit - UK PM Johnson plans to tell the EU he will not extend trade deal talks beyond Dec 31 2020
- Private oil data shows a larger than expected draw in headline crude oil inventory
- Australian data - construction PMI drops to 38.9 (prior 40)
- BoE Governor Carney says the Bank of England can still cut rates close to zero
