Forex news for Asia trading Friday 15 July 2016
Dreadful news from Nice, France in the early Asian hours, with a terrorist attack killing more than 80 people:
- Bastille Day celebrators injured in apparent attacks
Market news:
- Time to bet on rebounding commodity prices? This hedge fund thinks so.
- AUD surging now
China data:
- China Stats Bureau cites domestic demand as driver of H1 economy growth
- China GDP data, IP, retail sales, loan growth ... more beats than a nightclub!
- More China data - new yuan loans, money supply etc.
- China Q2 GDP: 6.7% y/y (expected 6.6%)
- China June Industrial production 6.2% y/y (expected 5.9%) & Retail sales 10.6% y/y (9.9%)
Pre-empting the China data:
- China Daily: Q2 GDP may grow 6.7% y/y
- China GDP data - here's the 'whisper' (from Premier Li Keqiang, no less)
- Japan economy minister Ishihara declines to comment on market levels
- People’s Bank of China sets yuan reference rate at 6.6805 (vs. yesterday at 6.6846)
- Fed's Kaplan again - same sort of comments, gotta be patient on hikes etc.
- Here's how Trump can lose at the convention and still be right
- GBP/JPY a mover today
- Fed's Kaplan: Jury is out on Brexit effect on US economy
- Fed's Bullard: 'Really no rush' to raise US interest rates
- ASB flag surging house prices as risk for RBNZ rate cut delay
- Japan draws up work reforms to boost growth - more detail
- Here's how the RBA would use 'unconventional measures', if needed
- NZ data - REINZ house sales data for June: Median house price +11.1% y/y
- Japan press - Japan is planning labor changes to boost consumer spending
- Trade ideas thread (the TGIF edition!) Friday 15 July 2016
The news from Nice put a subdued tone to the start of trade with minor moves out of risk and into USD and yen. These were not to last.
Cable, and GBP crosses began to gain ground, retesting towards overnight post-BoE highs. USD/JPY (and yen crosses) also gained ground, as did the Nikkei (some very strong performance there, with the Line IPO debuting north of 45% on issue price at one stage).
AUD and NZD drifted quietly down, not much in it. EUR/USD nad USD/CHF did little
The focus in the timezone today was on Chinese data, with Q2 GDP topping the bill, but industrial production, retail sales and financing data also important. Pretty much all of this data was a beat when it hit just on 0200GMT. There was the usual concern expressed about the veracity of the data (Capital Economics say growth was probably 4.5%, not 6.7% ... but they are just one of many with doubts) but if the data is to be believed we saw:
- a big jump in (June) loan growth (More China data - new yuan loans, money supply etc.)
- and beats for Q2 GDP (China Q2 GDP: 6.7% y/y (expected 6.6%)),
- June Industrial Production, Retail sales,
- and a miss on Fixed investment (China June Industrial production 6.2% y/y (expected 5.9%) & Retail sales 10.6% y/y (9.9%)).
Apart from doubts on the data credibility those that do believe it pointed out the dangers of credit-fuelled growth, which has been going on for quite some time in China. Along with this concern is the worry over surging government spending/investment while private investment slows (this via Bloomberg's Tom Orlik):
Markets nevertheless responded, as they do.
USD/JPY jumped above 106 after the data, GBP continued its climb. AUD and NZD gained some ground (the NZD was a laggard, but AUD/USD hit a 10-week high ... AUD/JPY, well that was just a monster). EUR/USD popped toward 1.1140, USD/CHF didn't do too much.
As I update, cable is knocking on the door of session highs, as is USD/JPY. Othere currencies are off their highs, but not by much. Expect for the poor old kiwi, its mid-range and still lagging.
Regional equities:
- Nikkei +1.04%
- Shanghai -0.05%
- HK +0.68%
- ASX +0.57%
