Forex news for Asia trading Tuesday 1 March 2016
- Abe adviser says Japan may need FX intervention to limit yen's gains
- RBA announcement: NO CHANGE
- Heads up for NZD trades - Dairy auction during London time today
- Estimates for Australian Q4 GDP revised lower
- Japan PM Abe to convene new "economic growth" advisory panel
- Japan - Nikkei Manufacturing PMI for February (final): 50.1 (Flash was 50.2)
- China - Caixin February manufacturing PMI: 48.0 (expected 48.4)
- PBOC sets USD/CNY central rate at 6.5385
- PBOC - no open market operations today
- China official PMIs: Manufacturing 49.0 (expected 49.4), Non-manu 52.7 (prior 53.5)
- PBOC's Chen: Strong dollar cycle may trigger crisis in emerging mkts
- Australia data - Building approvals (January): -7.5% m/m (expected -3.0%)
- Australia - BoP Current Account balance for Q4: -21.1bn (expected -20.0bn)
- Japan Q4: Capital spending +8.5% y/y (expected +8.7%), Profits % (prior +9.0%)
- Japan data - Household spending -3.1% y/y (expected -2.7%), plus employment data
- Australia data - February Corelogic RP Data House Price: +0.5% m/m (prior +0.9%)
- USD/JPY falls heavily
- Australia - Weekly Consumer Sentiment: 111.3 (prior 114.3)
- Australia data - AIG Manufacturing PMI for February: 53.5 (prior 51.5)
- NZ data - terms of Trade Q4: -2.0% q/q (expected 0.0%)
- Trade ideas thread for Tuesday 1 March 2016
- South Korea Exports (Feb): -12.2% y/y (expected -16.6% previous -18.8%) & - Imports Feb: -14.6% y/y (expected -16.0% prior -20.0%)
The yen was bought heavily in post-US trading but pre-Tokyo time. That's the thinnest liquidity time of the 24-hour cycle and the move was sharp. USD/JPY hit stops below 112.60 and EUR/JPY hit a 3-year low as it triggered sell stops also. Other yen crosses were hit too.
USD/JPY fell to under 122.20 and chopped back to 112.50 and then back to 20 again in following hours. Its back above 112.50 as I update.
It was a busy day on the data calendar, with poor data from Japan and mixed from Australia.
Australia kicked off with a stronger manufacturing PMI, and a weaker weekly consumer sentiment. CoreLogic reported another jump in house prices, though the pace is moderating. Building approvals came in lower than expected, and the simultaneous release of the BoP current account was worse than expected.
We get Q4 GDP tomorrow; the partials we've seen argue for a lower result than Q3 (the latest update to expectations has dipped from earlier estimates).
Net result for the AUD was a 25-odd point dip down to around 0.7110 where it pretty much sat until the RBA announcement. No Change, as expected, and the statement came across (to me at least) as quite sanguine. AUD/USD popped back toward 0.7140.
Japanese household spending data was poor (again missing already low expectations), while capex data was also on the soft side.
The Japanese 10 year bond auction went off at a negative rate.
We got poor PMI results from China, both official (manufacturing and non-manufacturing) and private (manufacturing).
It wasn't all bad news out of China. iron ore prices gained today. They've been on a bit of a roller coaster, but moving generally higher.
Gold performed strongly today, continuing its overnight rally and up toward 125o. Its back a few bucks from there as I update. Oil had a small range but is more or less unchanged on the session.
Regional equities:
- Nikkei +0.9%
- Shanghai +0.2%
- HK +0.55%
- ASX +0.67%
