- Morgan Stanley cuts China 2023 GDP growth forecast to 4.7% (from 5.0%)
- Further Chinese intervention to prop up the yuan: State banks USD/CNY sellers
- AUD/USD marked lower after the poor employment report - is there a caveat though?
- Australia July Jobs -14.6K (vs. +15K expected) & Jobless rate 3.7% (vs. 3.5% exp)
- Hong Kong's Hang Seng index to open nearly 2% lower today, down 20% from January high
- PBOC sets USD/ CNY central rate at 7.2076 (vs. estimate at 7.3047)
- HSBC highlight two continuing headwinds that'll drive the Chinese yuan even lower
- Singapore July exports slump, NODX down 20% y/y
- Japan's July exports -0.3% y/y (expected -0.8%) & Imports -13.5% y/y (expected -14.7%)
- RBNZ Orr says Bank's cash rate projections for next 2 years deviate little from 5.5%
- Barclays on what's driving yen selling (spoiler: carry trade). And an intervention warning
- New Zealand PPI data for Q2: Small index movement only
- Coinbase has been given approval to operate a futures trading service
- JP Morgan mulls corporate power, higher CPI, requires central banks re-start hiking cycle
- Morgan Stanley says Fed Reserve Chair Powell will keep his options open at Jackson Hole
- US mortgages could hit 8% says Realtor economist
- Forexlive Americas FX news wrap 16 Aug: The USD moves higher as data remains strong.
- RBNZ Governor Orr says he is confident that inflation pressure is lessening
- A nasty close for the US stocks
- Trade ideas thread - Thursday, 17 August 2023
China was once again a focus with Hong Kong’s Hang Seng index plunging again, on approach to 20% down from its high in January this year. After falling circa 2% it has found support and as I post its only down around 1% on the day. Rumours are circulating that Chinese authorities have told funds and banks not to sell stocks. While I haven’t confirmed this information at this stage such instructions are not unusual at all in China. It’s a one-party state and the Chinese Communist Party is very accustomed to getting its way. Of course, bullying investors is only a short-term solution and really only locks in deeper malaise over time.
The People's Bank of China set the USD/CNY reference rate nearly 10 big figures under the estimated (modelled) rate, its most aggressive setting divergence in this episode of yuan weakness so far and a sign the Bank want to slow the descent of the currency.
Apart from China, the other notable event was the July jobs report from Australia. This was a poor one, with 24K full time job losses and the unemployment rate climbing to 3.7% vs. 3.5% expected. The Australian Bureau of Statistics warned of holiday-time distortion in the data (see bullets above) but headlines are headlines for a reason and AUD/USD was marked lower immediately on the job loss and unemployment rate numbers. At its session low it was down around 60+ points on the day. NZD/USD is lower alongside.
EUR and GBP are lower against the USD also. A little more hawkish tone from the FOMC minutes publicised on Wednesday saw UST yields rise further here in the region and thus weigh on ‘risk’. USD/JPY ticked higher, popping above 146.50 at one stage and is just under there as I update.
Asian equity markets:
Japan’s Nikkei 225 -0.9%
China’s Shanghai Composite -0.2%
Hong Kong’s Hang Seng -0.9%
South Korea’s KOSPI -0.6%
Australia’s S&P/ASX 200 -0.9%