Forex news for Asia trading Tuesday 21 April 2020
Financial market moves were not as wild as they were during the US session, when oil plunged to below zero dollars a barrel. ICYMI, the wrap for the US time is here, it was one for the ages with the spot crude contract (WTI CL contract for May 2020) trading under negative $40:
The Asian timezone did not compete with such unprecedented moves, but we had an active session nonetheless. The May CL contract traded back above zero. There was the odd bit of news about for oil: Saudi and OPEC are said to be considering cutting output in the days ahead, in front of the planned cuts in May; Trump said the US would be buying oil for the country's Strategic Petroleum Reserve, subject to Congress allowing funding to do so (Trump wanted to buy for the SPR back in March but that plan was scuttled when Congress refused money to do - which has turned out quite well).
RBNZ news followed, looking to provide more support by easing lending restrictions (mortgage LVRs to be abandoned for a time). NZD moved lower (more to come on this in a moment) but it was pretty much due to a little stronger USD as Asian markets got fully underway.
RBNZ Governor Orr then spoke, firstly reiterating he does not rule out negative rates (though he said QE was a better tool for now) and then later dropping a bombshell (best to read these posts):
- 2. NZD grinding lower following RBNZ Gov Orr monetisation comment)
- 1. RBNZ Gov Orr says he is open minded on direct monetisation of govt debt
NZD fell further, dragging AUD down with it.
But the news flow did not stop. Reports followed of North Korean leader Kim Jong Un being in 'grave danger' following cardiovascular surgery in early April, some reports even had him as being 'brain dead'. As the reports hit the financial news wires the USD and yen drew bids as risk suffered. Later news flow had South Korean and Chinese officials denying Kim was seriously ill. Keep an eye on developments. I am not buying the reports from China and SK that everything is just fine.
Read from the bottom up for the chronology on NK:
- 5. China source weighs in - North Korea's leader Kim Jong Un is not believed to be seriously ill
- 4. South Korean government says North Korean leader Kim Jong Un is not seriously ill
- 3. USD and yen gaining as reports of Kim Jong Un's 'grave danger' to health spread
- 2. US media report North Korea leader Kim Jong Un is brain dead
- 1. North Korean leader Kim Jong Un is receiving treatment after undergoing a cardiovascular procedure
Other:
- Coronavirus - Australian PM Morrison eases lock down restrictions a touch
- Trump will suspend immigration into the US
- Australian jobs data - From 4 March to 4 April jobs decreased by 6.0%
- RBA April minutes: Likely that smaller, less frequent purchases of govmt bonds would be required
- RBNZ Gov Orr says again does not rule out negative rates
- NZD traders - heads up for the GDT dairy auction coming up Tuesday
- PBOC sets USD/ CNY mid-point today at 7.0752 (vs. yesterday at 7.0657)
- Forex option expiries for Tuesday April 21 at the 10am NY cut
- NZ finmin Robertson: NZ economy in strong position before crisis, well placed to recover
- US Pelosi on coronavirus economic relief deal -negotiations down to the fine print
- Singapore police have opened an investigation into oil trader $4bn collapse
- The mess in the USO ETF continues to unfold as it trades 7.8% above NAV
- South Korea April 1 - 20 exports down 27% y/y
- Oil - Goldman Sachs says the June WTI contract to come under pressure next
- Australia weekly consumer confidence 84.2 (prior 78.2)
- AUD/USD months-ahead view - below 0.59
- Australia - Virgin airline has collapsed, voluntary administrators called in
- Trump more comments on oil - looking to stop shipments of oil from Saudis
- Canada - oil - Alberta province wants a CAD15-30bn bailout
- Why the May CL oil contract traded (and is trading) at a negative price
- RBNZ propose to remove lending restrictions (LVR)
- Trump comments - says filling up the US Strategic Petroleum Reserve
- A guide to trading signals
- Saudi Arabia, OPEC are considering cutting oil output ASAP, not waiting until May
- Subzero oil - FT front page headline nails it
- Trade ideas thread - Tuesday 21 April 2020
