Forex news for Asia trading Wednesday 16 October 20
- Goldman Sachs has 1.5 trillion reasons yen remains weak
- S&P says the US and China made little progress on trade, technology dispute
- Euro has recorded a meaningful drop in fair value … to settle 1.05-1.10 in Q4
- PBOC to conduct 1 year MLF injection of funds, 200 bn yuan
- PBOC sets USD/ CNY reference rate for today at 7.0746 (vs. yesterday at 7.0708)
- South Korean central bank cuts cash rate by 25bps to 1.25% (as expected)
- China's Foreign Ministry threatening retaliation against the US sends risk lower
- China urges US to stop pushing forward bill over Hong Kong
- Brexit - UK PM Johnson still haggling with the "Show me the money!" DUP
- Australian Treasurer Frydenberg says again committed to budget surplus
- Japanese PM Abe says will spend from budget reserve on typhoon relief
- Australia - Westpac's leading indicator for September: -0.08% m/m (prior -0.28%)
- Fitch on Australia risk - China hard landing in 2nd place
- Politico reports US House Democrats will delay a full house vote authorizing Trump impeachment inquiry
- RBNZ's Bascand says lower rates may be needed
- Scotland wants (another) independence referendum (post is NSFW!)
- NZ Q3 CPI 0.7% q/q (vs. expected 0.6%) and 1.5% y/y (vs. expected 1.4%)
- US military aircraft carries out ‘show of force’ in Syria
- Brexit - former UK government minister says the emerging deal is "absurd" and "unacceptable"
- More from Fed's Daly: Would like inflation up to 2% within a year
- Gold - consolidating before higher
- Trade ideas thread - Wednesday 16 October 2019
- NZD - Westpac has raised its forecast for Fonterra's milk price payout
- US House of Reps passes a bill supporting Hong Kong protestors
- Fed's Daly says low inflation is showing the labor market has more room to run
- Brexit - DUP says 'gaps remain' and further negotiation is needed
The US House of Representatives unanimously passed a bill in support of Hong Kong protesters. News of this had little impact but when morning dawned in China there was a response from the country, promising retaliation (see bullets above). This sent AUD lower and yen higher, thus the AUD/JPY move mentioned in the headline to this post.
As I update we are not too far from its session lows.
More news and rumours swirled around Brexit into the UK Tuesday evening. Optimism is being tempered by reports of still 'much to do' and what have you but it is hanging in there. Whether that is justified or not will surely be tested as Europe and the UK open for business Wednesday. GBP has come back a little from its highs and has steadied somewhat circa 1.2750.
We got New Zealand inflation data for Q3 today, which came in above the central estimate but the y/y did show a drop from the previous quarter. NZD was marked higher on the data, topping out above 0.6310 before retracing somewhat, then all the way, then making a fresh session low! Contributing to the weakness for the NZ dollar were comments from RBNZ deputy Governor Bascand on likely more easing to come from the Bank as well as that China response to the US support of HK.
The South Korean central bank cut its cash rate again today (previously cut in July). The PBOC weakened the onshore yuan at its reference rate setting.
Still to come:
