Forex news for Asia trading Thursday 19 March 2020
- Fed broadens its program of support for the flow of credit to households and business
- RBA announce cuts the cash rate to 0.25%
- South Korean exchange halts KOSPI trading - circuit breaker after fall of more than 8%
- Coronavirus - New Zealand bans indoor gatherings of more than 100 people
- US and South Korea detected their first coronavirus case on the same day -
- Japan fin min Aso says not considering cash payments to individuals as part of economic relief package
- South Korea reports 152 more cases of coronavirus, total 8,565
- PBOC sets USD/ CNY reference rate for today at 7.0522 (vs. yesterday at 7.0328)
- FX option expiries for Thursday March 19 at the 10am NY cut
- Coronavirus - NZ government advises New Zealanders not to travel overseas
- Australian employment report (February): Unemployment rate 5.1% (expected 5.3%)
- Asia FX intervention - SK selling USD against won
- BOJ January meeting minutes (pre-coronavirus disaster)
- Fed's Kashkari says the coronavirus pandemic could be devastating
- Japan CPI data for February: headline CPI 0.4% y/y (expected 0.5%)
- ECB's Lagarde says there are no limits, determined to use full potential of our tools
- Japan press reports on a planned 30tln yen government stimulus package
- ECB announces a new coronavirus pandemic response, EUR750bn purchase program
- Coronavirus - Update on US auto producers - widespread shut downs
- US GDP forecast from JP Morgan is for a stunning minus 14% in Q2
- Coronavirus - Australian airline QANTAS completely shuts down international flights, 2/3 of staff stood down
- New Zealand Q4 GDP: 0.5% q/q (expected 0.5%, prior 0.7%)
- US Treas Sec Mnuchin pushing for the next coronavirus legislation to be finished by early next week
- ECB's Villeroy says Bank buy more bonds if needed
- Brazil's central bank cuts its benchmark rate by 0.5%
- Trade ideas thread - Thursday 19 March 2020
White House economic adviser Kudlow mentioned the government might buy stocks, sending equities on a little pop towards the end of the US session. Once Globex reopened after its scheduled break though index futures fell away a little.
Then the news hit that the ECB was launching a new EUR750bn stimulus measure (see bullets above) which sent them back up again! EUR/USD traded higher on the news also, topping out around 1.0980 (just above). In following hours all the gains for EUR were washed away. Equity index futures declined again also.
USD strength was also evident against the yen, it shot towards 109 into the Tokyo fix and after a 45 minute or so of chop under its highs moved up to around 109.50.
Cable, too, lost ground during the session and is barely above its overnight lows as I post.
But the huge movers on the session here AUD and NZD, weak against the strong dollar, of course but also on the crosses.
AUD/USD highs for the day were above 0.5800 with lows circa 0.5510. We had better jobs data from Australia during the session, but the data was for February and the focus is on what is ahead as the COVID-19 outbreak shutters large swathes of the economy both in Australia and around the world.
NZD/USD fell to lows under 0.5500.
Offshore investors have been big sellers of the two countries, that continued today.
The RBA announced a cash rate cut, its targeting the 3 year yield, and embarking on QE during the afternoon after its emergency meeting (see bullets above). As I post the net impact on the AUD from their announcements is little after its huge drop.
The Fed also announced further supportive funding measures at the same time (see bullets above).
Yet to come is a speech from Reserve Bank of Australia Governor Lowe and, a first after a policy meeting, a press conference!
