- Friday (Asia time) will bring Japanese CPI data (December)
- China to encourage investment to boost chip supply
- China says it imported crude oil from Iran for the first time since December 2020
- Scotia expects a Federal Reserve lift-off rate hike in March
- US President Biden said that he’s not ready to lift Trump's tariffs on Chinese imports
- China cuts Loan Prime Rates: 1 year to 3.7% (from 3.8%) & 5 year to 4.6% (from 4.65%)
- PBOC sets USD/ CNY central rate at 6.3485 (vs. estimate at 6.3482)
- Australian dollar marked up following the strong employment report
- Australia (December) Employment Change: +64.8K (vs. expected 30.0K)
- NZ PM says restrictions will be tightened if there is community transmission of Omicron
- Google’s digital cards might soon enable users to hold bitcoin and spend fiat
- UK RICS house price balance for December +69 (prior 71)
- Australia Consumer Inflation Expectations (January) 4.4% (prior 4.8%)
- Japan trade balance (December) Y -582.4bn
- US Senator Manchin says has not restarted talks with Biden on Build Back Better program
- Westpac forecast an RBA rate hike in August 2022
- Updated AUD outlook - "headwinds have strengthened early in 2022"
- Japanese media say Tokyo will raise its coronavirus alert to the highest level
- US President Biden backs the Fed's likely monetary policy tightening
- New Zealand Food price Index forDecember +0.6% m/m
- US President Biden says will keep working to try to increase the supply of oil
- US President Biden warns Russia not to invade Ukraine
- Trade ideas thread - Thursday 20 January 2022
- Australia’s drug regulator grants provisional approval to two oral treatments for COVID-19
- Private oil survey data shows build in headline crude inventory
- Biden - job to make sure inflation does not become entrenched lies with the Fed
The Australian dollar rose on a very strong jobs report for December 2021 with the unemployment rate falling to its lowest since 2008 and near a 50-year low. As noted in the data post (see bullets above) the survey for the report was conducted prior to the Omicron outbreak taking hold, which means there will be weaker reports ahead for January and February. Still, the headlines were strong and AUD/USD was taken higher.
Prior to the publication of the jobs report Westpac joined CBA in issuing a note forecasting a Reserve Bank of Australia rate hike in 2022. WPAC was previously looking for a rise in February of 2023 but have shifted forward now to August this year (+15bps followed by +25bps in October 2022 is their projection). Australia’s largest fund manager (AMP) is, so far sticking to its call for a November ‘22 hike but acknowledge after the jobs report that the risk is increasing that it will come earlier. UPDATE – no they are not, AMP have joined the call for an August rate hike from the RBA.
Following soon after was the news out of China that both the 1- and 5-year Loan Prime Rates (LPR) were cut (see bullets above). This had been widely expected following the cuts to both the rate on the 1-year Medium-Term Lending Facility (MLF) and on the Reverse Repo (RR) earlier in the week. China has pivoted to plenty of ‘supportive policy’ statements, and now actions. This comes as the property sector is seeing a slow-motion implosion under the weight of debt that is not being repaid, and a strict ‘covid-zero’ response to Omicron outbreaks weighing on the economy.
The Australian dollar rose after the strong jobs report and, as I post has subsided to now be little changed on the session. EUR and GBP, too, rose against the USD only to see some give-back. USD/JPY dropped towards 114.00 but has since come back to be barely changed on the session. The supportive China policy played a role in the small weakness for the USD.
For oil, it fell back also after more strength on Wednesday. China said it imported oil from Iran in December 2021, the first shipment since the same month in 2020.
The Australian unemployment rate is at its lowest in nearly 50 years: