Forex news for Asia trading Friday 24 September 2015

Federal Reserve chair Janet Yellen speech and health scare:

  • Yellen's health scare - recap from the WSJ
  • Fed official says Yellen felt dehydrated at end of long speech, felt fine afterwards
  • Bloomberg reports Yellen is departing speech event, resuming schedule
  • Fed Chair Yellen receiving medical attention after speech
  • Yellen's speech is her most detailed case yet for Fed to begin raising rates in 2015
  • Fed head Yellen says expects a rate rise later this year

Japan (CPI today, and more):

  • Japan revised July wages data
  • More from Japan's Amari: Do not see need for new stimulus spending now
  • Japan economy minister Amari comments-CPI decline caused by fall in energy prices
  • Japan CPI data today-analyst responses
  • Japan Cabinet Office monthly report-lowers assessment of economy
  • Japan PPI Services for August: +0.7% y/y (expected +0.5%)
  • Japan headline CPI for August: +0.2% y/y (vs. +0.1% expected)

Bank of England

  • BoE's McCafferty's comments crossing the wires
  • Why the Bank of England's McCafferty voted to hike
  • BoE's McCafferty-a good deal of current low inflation could be transitory

Australia, New Zealand:

  • Goldman Sachs: RBA will become increasing uncomfortable with near term growth
  • AUD traders-Video on Aust, economy outlook, RBA etc. from Shane Oliver
  • Fonterra CFO says $4.60 payout needs powder price of $3,000
  • PBOC official says impact of yuan devaluation is short term in nature
  • Yuan reference rate for today set by the PBOC at 6.3785
  • China Securities Journal: China won't face unexpected tight liquidity
  • Trade ideas thread for Friday 25 September 2015
  • Overnight press: Caterpillar looks at falling revenues, cuts sales forecasts, cuts jobs

The market was awaiting the afternoon (5pm New York time) speech from Federal Reserve Chair Janet Yellen. We got a lot more than we bargained for.

The text of Yellen's speech was released at the scheduled time, and it was less dovish than many had expected. The details are in the bullets above, but in a nutshell she still expects a 2015 rate hike and a very gradual pace thereafter. Given the 'dot plot' its hardly surprising that she is still speaking of a December (probably) hike. The USD stacked on a small gain across the board with EUR/USD down (eventually, it wasn't all instant) 60 odd points, AUD and NZD similarly weakened. The moves were not as pronounced against the yen, CHF and GBP.

Cable found some support from hawkish comments in the UK Times from the Bank of England's Ian McCafferty (see bullets, above).

So far, so good ... but soon we got a bit of a scare.

Towards the end of her speech Yellen began to stumble in her speech, with long pauses, missed words and so on. She cut the end of her speech off quickly, not taking a Q&A and was seen soon thereafter with medics. A little later it emerged she was suffering from dehydration. There haven't been any further elaborations offered apart from an announcement she was continuing on with her day's schedule as planned, and reports were she walked to her car unassisted. We wish her well.

Japanese CPI was the next 'heads-up' event on the schedule, the core rate (excluding food price changes) for the country (August) came in negative. The national and Tokyo 'core-core' (excluding food and energy) rate was higher though, and was higher than expectations. Yen did very little on the release.

Revised July labour force data from Japan showed a series of wage gains (see bullets, above) which seemed to weigh a little on USD/JPY after release, but if you hold a chopstick up to your chart it will obscure the tiny move.

Gold was softer from yellen's speech as has not bounced at all. Its on its lows for the session. Its down about $8 from session highs as I update. Oil is little changed.

Regional equities:

  • Nikkei (Japan) +0.3%
  • HK -0.4%
  • Shanghai +1.7%
  • ASX -0.3%

Still to come - watch out for possible comments from Bank of Japan (BOJ) Governor Kuroda