Forex news for Asia trading Wednesday 17 August 2016
- NZD traders - BNZ says RBNZ to delay its next rate cut
- Cisco Systems laying off about 14,000 employees
- Australia - Wage price index for Q2: 0.5% q/q (expected 0.5%)
- Analysts weigh in on where the BOJ is likely to intervene
- Australia - Westpac Leading Index (July): +0.05% m/m (prior -0.22%)
- Japan's Asakawa: Will respond to FX market if there are excessive moves
- Goldman Sachs have 3 reasons why EM FX is attractive right now
- Bank of America Merrill Lynch monthly fund managers survey (Aug 5-11)
- ICYMI: RBA Stevens press interview overnight
- Moody's affirms Australia's AAA rating, maintains stable outlook
- NZ Q2 Employment change: 2.4% q/q (expected 0.6%)
- Steve Cohen barred from commodity trading until 2018
- Tudor Jones hedge fund said to have laid off 15% of staff
- Trade ideas thread - Wednesday 17 August 2016
Data and news flow was light today.
New Zealand employment data came in at solid beats pretty much across the board, although Stats NZ did caution that revised methodology overstated the gains.
Australian wage data for Q2 today showed soft growth, but on closer look the detail has real wage growth at its fastest in 3 and a 1/2 years. This should augur well for household spending and ongoing domestic economic stability. Along with this data we also got the Westpac leading index which indicates GDP growth close to trend in coming months. And Moody's pulled back on their rating downgrade talk, affirming Australia's AAA along with a stable outlook. Aussie economy permadoom bears did not have a good session.
Currencies traded in small ranges.
USD/JPY popped from early lows around 100.20 to circa 100.60. We got some tough talk from the Japanese Ministry of Finance's Masatsugu Asakawa (the guy who will give the word on when to intervene, if it ever comes to that, to the Bank of Japan), jawboning the yen lower. Whether it was the market paying heed to Mr. A or some other reason, no one at the Ministry will be arguing against the better bid (by 40 odd points) in USD/JPY today.
A couple of points to remember on the prospect for intervention:
- Japan may be limited in its ability to intervene against yen strength
- It has agreements with the G7 and G20 against 'manipulation'
- The U.S. Treasury could term intervention as manipulation, as unless there is some sort of exceptional event (eg. a damaging earthquake) the U.S. would cite the yen as being weaker than levels seen previously
- There are 3 'thresholds' the US uses to decide if a country is 'unfair' in its FX policy, and Japan already satisfies 2 of them (a "significant" bilateral trade surplus with U.S., and a "material" current-account surplus)
- The third would be net purchases of a foreign currency worth more than 2% of GDP over a year (this equates to around 10tln yen) ... so anything around or exceeding this amount in intervention would be politically difficult for Japan.
But, I digress from the wrap ...
EUR, CHF and GBP all had smallish ranges also. Oil and gold did little.
The NZD had a pop on the strong employment data initially but has since come back to be little changed. AUD is down 20 or so points from session highs.
The Nikkei was positive for its morning session
Regional equities:
- Nikkei +0.50%
- Shanghai -0.42%
- HK +0.21%
- ASX -0.10%
