Forex news for Asia trading Monday 8 May 2017

  • China trade balance (April), USD terms now: $ +38.05bn
  • China trade balance (April): CNY +262.3bn (expected CNY 197.2bn)
  • Saudi energy minister: Worst clearly behind us, market moving into rebalancing
  • Stay tuned for the China April trade balance data .... coming up
  • RBNZ meeting this week - no change is expected - preview 3
  • RBNZ meeting this week - no change is expected - preview 2
  • Australia: Building approvals (March) -13.4% m/m (expected -4%)
  • Australia: NAB (April) Business Conditions 14 (prior 14) & Confidence 13 (prior 6)
  • Australia, ANZ Job ads for April: 1.4% m/m (prior +0.3%)
  • Moody's: China shadow banking sector impacted by increasingly tight liquidity
  • Bank of Japan JGB buying today at same amounts as previous
  • People's Bank of China sets yuan reference rate at 6.8947 (vs. Friday at 6.8884)
  • RBNZ meeting this week - no change is expected - preview
  • French election - Macron's gap is even bigger
  • Brexit: UK consumer spending growth slowed (April), expected to remain weak for months
  • Euro update, sliding after early highs following Macron French election win
  • Soc Gen on the EUR after the French election, prefer EUR/JPY
  • ANZ on oil, OPEC
  • ANZ outlook for China commodities
  • Goldman Sachs on the French election outcome
  • Macron win: ECB preparing for greater pressure to ease off monetary policy accelerator
  • "Macron Stuns Sceptics by 36% Margin"
  • Q: What time is the China trade balance data due today? A: It depends
  • Trade ideas thread - welcome to the new FX week, Monday 8 May 2017
  • French election counting continues, official puts Macron on 64+% so far
  • Economic data due from Asia today
  • MOAR weekend news - China FX Reserves (April), up for 3rd consecutive month
  • Merkel victory in German state election
  • French election results, official counts coming now
  • Macron wins French election - EUR higher (early price indications)
  • French election results - Le Pen concedes defeat

Weekend:

  • France heads to the polls
  • Canada threatens retaliation for US lumber tariffs
  • US wage growth might be soft but it's downright awful in Canada
  • You know you're good when you can raise $5 billion in 24 hours
  • Technical analysis: USD/CAD finished on the lows after a big reversal
  • Huge trove of Macron campaign emails leaked

And, ICYMI:

  • ForexLive Americas FX news wrap: Wages weight on US dollar

Macron's win in the French election was telegraphed early in exit polling, the pollsters giving him around 65% for the win. Early FX pricing took EUR/USD to around 1.1020 and EUR crosses higher alongside. USD/JPY, too, had higher earlier pricing (EUR/JPY a big gainer, early highs around 124.60).

As slightly better liquidity to forex came in the EUR gave back its pop, covering its 'gap' and extending then to under late Friday US levels; EUR/USD touching below 1.0960 for a 'sell the news' response.

There was some other election news from Europe, a state election in Germany being won by Merkel's party, outperforming expectations. There is more on the French and German elections in the bullets, above.

Apart from the politics the news flow came mainly from economic data, and that from Australia followed by China a little later.

Although the Australian data is covered in the bullets above, a little more on the main item, building approvals:

  • multi-unit approvals fell 22% m/m and 28% y/y, while houses fell 5% m/m & 11% y/y
  • As further APRA restrictions take effect its difficult to foresee too much of a pick-up for these in the immediate future
  • Non-residential approvals down 4.5% m/m, up 25% y/y

While I have said it many times (& twice today already), approvals have peaked and are on a downward trend, but there is still much work in the 'pipeline'. Indeed ANZ describe work in this construction pipeline as a 'huge backlog'.

The other important (for the market) Australian item of data was the National Australia Bank Business Survey results, conditions and confidence both higher on the month (again, see the bullets above for more)

Trade data for April from China showed a larger than expected surplus, but with misses on both of the y/y imports and exports. As an aside, there are reports emerging from China that inventories of imported iron ore inventory sitting at Chinese ports have hit new record highs.

And so to currencies. EUR I've covered, above. After its early pop for a small gap higher USD/JPY has slid back to cover, but has had only a small range and is not much changed from late US Friday levels around 112.70 as I update. Japanese markets reopened today after being closed for Wednesday through Sunday last week.

USD/CHF has edged a few points higher, while cable is down a few points. Ranges for both have been small for the session. USD/CAD is little changed. NZD/USD showed a very small bit of early weakness but is now barely changed on the session.

Gold is up a few dollars, oil is slightly higher too.

Regional equities:

  • Nikkei+2.13 %
  • Shanghai -0.92%
  • HK +0.36%
  • ASX +0.55%

Still to come ... much later this week:

  • RBNZ meeting this week - no change is expected - preview 3
  • RBNZ meeting this week - no change is expected - preview 2
  • RBNZ meeting this week - no change is expected - preview