Forex news for Asia trading Thursday 16 April 2020
- Goldman Sachs chief executive Solomon on consumer response to the coronavirus
- New York Fed to launch a high frequency (weekly) economic index
- Australia March jobs report: Employment change +5.9k (expected -30k)
- NZ PM Ardern reiterates will make lock down decision on Monday 20 April
- PBOC sets USD/ CNY reference rate for today at 7.0714 (vs. yesterday at 7.0402)
- Most Japanese firms say govt's $1 trillion coronavirus stimulus too little, too late
- Australia survey of consumer inflation expectations, for April: 4.6% (prior 4.0%)
- FX option expiries for Thursday April 16 at the 10am NY cut
- Jobless claims data due from the US on Thursday likely to take 3 week total toward 20 million
- (Not FX) Tour de France postponed, will take place 29 August to 20 September this year
- RBNZ Gov Orr - COVID-19 economic shock is a fiscal policy challenge
- US restaurant same-store sales fall 62.3% in a week - being hailed as encouraging news
- NZ job ads in fell 29% m/m in March (April will be even worse)
- More UK data: Consumer spending -6% y/y in March
- Japan data - Reuters Tankan (April) - business sentiment hits fresh decade lows
- UK data - BRC Sales like-for-like for March -3.5% y/y (expected -5.5%)
- G-20 agree on a debt standstill for the world’s poorest nations
- US coronavirus deaths set new single day record, +2371
- Trump says the data suggests US has passed the peak for new cases of COVID-19
- Mexico downgraded to BBB- by Fitch, outlook stable
- More from the US Navy - Russian Su-35 jet in “unsafe” intercept of a US P-8
- US Navy statement says Iran ships in unsafe interaction with US ship
- Goldman Sachs optimistic that measures to contain the spread of the coronavirus are working
- Japan press reports government to cut its economic assessment (2nd consecutive monthly cut)
- Trade ideas thread - Thursday 16 April 2020
- Pelosi says she's unmoved, continues to reject another $250B for PPP program
Dismal data from the US on Wednesday and the prospect of further to come on Thuirsday was a factor leading to soft 'risk' markets here in Asia today with continued declines for equities and nearly across the board strength for the US dollar.
EUR and GBP fell against the USD, as did even CHF and yen. All of these without much in the way off idiosyncratic news for the currencies.
AUD and NZD were lower against the big dollar also, with various factors weighing on them along with the background sentiment. Reserve Bank of New Zealand Governor Orr reiterated the Bank is not averse to negative rates if needed - he, and other RBNZ officials, have already said this but each time he repeats it it seems to raise eyebrows. His comments saw NZD drift lower, dragging AUD along lower also.
On the AUD, today we had the March jobs report which came in at a gain for employment in the month. The important factor, though, was that the survey for the report was conducted from March 1 to 14, well before the lock down restrictions came into place (and thus the economic disruption). The AUD had a bit of a pop on the surprise (shock) result but the rise was limited to 20 or so points on a few shorts being taken out before AUD dropped back down again to establish a fresh session low.
While the jobs report really is ancient history (we await the tectonic shift job losses to come in the April report) the details nevertheless were not comforting, showing a jobs market with underlying weakness even before the crisis began, with:
- underemployment to a 4 year high
- under-utilisation up to its highest level in two years
- growth in employment and hours worked already slowing
The April jobs report is 5 weeks away, so I do not want to be previewing it here now, but while it is going to be bad, showing huge job losses, one factor that will cap the inevitable rise in the unemployment rate will be the government 'JobKeeper' wage subsidies - the Australian Bureau of Statistics note that people paid thru JobKeeper will be classified as employed.
As a positive input for the AUD today the RBA once again 'tapered' its QE bond buying:
- AUD 1.0 b vs. 1.5 b in the past week
Regional stock indexes:
- Nikkei: -1.53%
- Hang Seng: -0.72%
- Shanghai: -0.01%
- ASX: -1.38%
