Forex news for Asia trading Tuesday 22 September 2020
- Survey finds that Coronavirus supply chain disruptions are easing for companies in south China
- Global Times says TikTok - Oracle deal unlikely to get Chinese government approval
- Hong Kong's Lam says HK will extend all social distancing rules by another week
- Preview of the RBNZ monetary policy meeting on Wednesday 22 September 2020
- RBA Debelle Q&A: Says negative rates are an option, does not mean "on the table"
- PBOC sets USD/ CNY reference rate for today at 6.7872 (vs. yesterday at 6.7595)
- FX option expiries for Tuesday September 22 at the 10am NY cut
- Recap of Fed’s Bullard's remarks - says US has already delivered enough fiscal aid
- RBA dep gov Debelle says watching AUD rate carefully, intervention is a policy option
- Level ahead to sell AUD/NZD
- Australian ANZ Roy Morgan Weekly Consumer Confidence index 93.5 (prior 92.4)
- Preview of the RBNZ monetary policy meeting Wednesday 22 September 2020
- Coronavirus - UK PM Johnson to request people to work from home if they can
- Fed's Bullard says the Federal Reserve will be much less pre-emptive about hiking rates
- Two Fed officials make further pleas for fiscal support from Congress - Bostic and Williams
- Pompeo says welcomes UK, Germany, and France's rejection of China's unlawful maritime claims
- Fears over a harsh national COVID-19 lockdown in the UK appear to be overblown
- Upgraded forecasts from the Australian economy from the big four pillars
- Trade ideas thread - Tuesday 22 September 2020
- Fed's Powell: Fed will do what it can for as long as it takes
- The NASDAQ index nearly erases all their losses. Dow the worst performer.
Reserve Bank of Australia Deputy Governor Guy Debelle spoke today on his economic and policy outlook. In his speech he indicated four further options the RBA is considering:
- to buy bonds further out along the curve to lower rates at longer maturities
- FX intervention (conceding while he did so its not clear it would be effective)
- to lower the cash rate further, without going into negative territory
- negative rates
(see bullets above for further detail):
As he spoke the AUD was taken lower (not a big drop) and as I post a few hours later it is tracking sideways circa 0.7213 or so.
USD/JPY has dribbled lower on the session, again not by much, but putting these two together has seen a decent raneg move lower for AUD/JPY. A clear catalyst to prompt the lower USD/JPY was not clear and given USD/CHF is barely changed it does seem a yen specific move. There has been much speculation of the yen becoming more attractive as real yields in the country edge positive (inflation is weak and on many measures negative). Its not overly clear that offshore investors benefit from 'real' rates given they are not buying goods and services in Japan but for onshore investors its an understandable argument and so far its caught on as a narrative to explain yen strength. It was a Japanese market holiday again today (Monday was also) and no fresh news nor data out of the country of note for forex.
EUR/USD, USD/CAD, NZD/USD cable ... all are barely changed. Federal Reserve System Powell is giving testimony to the US Congress on Tuesday (US time, and Wednesday and Thursday also) which seems to have given Asian FX an excuse to hold back on trading. Note, though, in the bullets above are some of the main points Powell will be making in his prepared remarks tomorrow (i.e. Tuesday US time). Admittedly its the Q&A that is likely to be more interesting. Curiously, Atlanta Fed President Bullard gave an interview in which he said the current level of fiscal action from the Congress is enough, which contradicts Powell and other Fed officials.
For those following along the US politics surrounding nominating a new Supreme Court judge key Trump ally Senator Lindsey Graham said the nominee already has the votes in the Upper Hpouse to gain approval. His comments come before Trump has even announced his nominee, but, well, there you go.
