Forex news for Asia trading Wednesday 25 August 2015

China

  • China NDRC: China has conditions to achieve about 7% growth rate
  • PBOC sets yuan reference rate at 6.4043
  • Reuters - China raises margin requirements for trading of stock index futures
  • Bloomberg headline on PBOC's Ma - rate cuts not a shift of monetary policy
  • PBOC chief research economist on interest rate and deposit reserve ratio cuts
  • Increased bets that the yuan devaluations are not over
  • Four China brokers say they are being probed by the regulators
  • PBOC researcher blames Fed rate hike expectations for stock market slides
  • China - Boy trips and punches 5 trillion dollar hole in global equity markets (video)
  • Economic Info Daily: China still has room to cut Reserve Ratio this year
  • More on China consumer sentiment .... "demands very close attention"
  • China Westpac-MNI Consumer Sentiment for August: 116.5 (prior 114.5)
  • FT report: "Questions over Li Keqiang's future amid China market turmoil"
  • Australian Q2 'Construction Work Done' - reads like a mining boom report!
  • NZD trader? Print this out, stick it on the fridge. Hot RBNZ dates for 2016/17.
  • Reuters: Japan chief govt spokesman says hope China's rate cut decision stabilises mkt
  • Australia - Q2 Construction work done: +1.6% q/q (expected -1.5%)
  • RBA watcher says if the Fed doesn't hike, it increases RBA preparedness to cut
  • RBA Stevens says a key question is how we generate sustainable growth
  • Japan - Services PPI for July: 0.6% y/y (vs. expected is 0.4%)
  • Central bankers at Jackson Hole have a 'new economic mess' to sort out
  • New Zealand 'trade balance' data for July: -649mln (-600m expected)
  • Citi says watch out for Fed's Fischer speech - a 'key wild card'
  • Trade ideas thread for Wednesday 26 August 20155
  • American Petroleum Institute (API) crude oil inventories: -7.3 million bbls
  • El Erian: Fed window for raising rates is now closed

The focus today was again on Chinese stock markets, specifically how they would respond to the late Tuesday PBOC rate cuts. OK, lets not be a curmudgeon ... the stock indices didn't plunge again today! They didn't soar either (thats gonna be a long way off given the huge overhang of sellers around now), but two-way movement was a change from the liquidation moves we've had.

The Shanghai Composite is closed for the lunch break as I update, and after a morning of gyrations (positive on the open, then a slip into negative territory, positive again, then new session lows and then a climb into the break to be slightly higher (up 0.8%) ). I could write a thousand words, but here's a pic. I'm pretty sure thats the going exchange rate:

Before stocks opened today in China we got the weakest central reference rate set for the yuan in 4 years. That one sort of slipped through barely noticed, but the devaluation policy obviously continues, a little more quietly of course, but its still there.

Elsewhere we had continued action.

EUR/USD had traded higher in the late NY afternoon and that carried on (somewhat) in early Tokyo before topping out for the session just above 1.1550. A near 50 point drop over following hours and we've settled around 1.1520 as I update.

USD/CHF was a not-quite mirror, CHF gains were not as notable before it gave back 40 or so points. Cable continued its 'not bothered' sideways movement, before net gaining a 30 or so points as the session progressed.

AUD ground out a small loss in the early going, hitting briefly below 0.7100 before its own 40+ point gain and sits not too far from session highs around 0.7130 as of now. While the wild gyrations on China stock market moves have dissipated, today was spent following like a nice little doggy on a leash. NZD/USD followed a similar pattern, down below 0.6470 before gaining toward 0.6510 and now around 0.6500.

There was early Asia/late US action in oil, with API data showing a huge inventory draw relative to expectations. Oil went bid, as you'd expect, with WTI gaining nearly a dollar before giving 60 cents back and settling in for some sideways chop. Its ticking back towards its earlier highs as i update.

Gold gained into early Tokyo time before dropping back to overnight lows around $1135.

Still to come:

  • US Durable Goods. Here's a preview