Forex news for Asia trading Thursday 24 March 2016
- Campaigner against Australian-owned mine in South Africa found shot dead
- Fitch on China's coal sector - weaker further over next 2 years, financial distress
- PIMCO sees 7% yuan depreciation this year & 1 or 2 Fed rate hikes
- China Premier Li yuan comments: Will not devalue to boost exports
- China Premier Li comments not adding much
- BOJ's Kuroda in parliament - familiar comments
- Chinese official media report short selling allowed again
- PBOC sets USD/CNY mid-point today at 6.5150 (yesterday was 6.4936)
- Goldman Sachs says financial conditions eased, market sentiment improved
- BOJ 'Summary of Opinions' (March meeting) - risk balance still down
- Australia - Westpac says seeing some stress in consumer loans
- Reuters poll Japanese business: Most see negative rates as bad decision
- BOJ "focusing on holding down interest rates rather than expanding the money supply"
- More Japan press: "economic downgrade seen bolstering case against tax hike"
- New Zealand February trade balance: +339m (expected +90m)
- Japan press - "Strong yen seen persisting into April"
- Trade ideas corner - Thursday 24 March 2016
As the headline says, a day of USD strength in Asia today, but its performance was mixed.
AUD was a laggard, dropping under its overnight low and then below 0.7500. It had a bounce but its unsustained as I write AUD/USD is back near session lows under the figure. Not only USD strength weighing on the AUD, there was a round of negative news (the Woodside LNG plant suspension back on the news, ANZ warns on $100m bad debt blowout) along with heavy commodity prices (although they were supported (well, they halted getting trashed) on the comforting words from Chinese Premier Li (see bullets above).
NZD was weaker too, though not to the same extent as the AUD.
EUR, CHF, GBP all lost ground against the USD, but ranges were not large.
USD/JPY popped 50-odd points before giving some back (its still not too far from session highs as I update).
The People's Bank of China set the yuan weaker today in response to USD strength, with the largest daily weakening of the midpoint since January 7. Overnight developments in the US ignited increased speculation of the chance of an April Fed rate hike, and there was chatter in markets here today that the sharp PBOC move on the yuan was perhaps a warning 'shot across the bows' for the Federal Reserve on what to expect from China if an April hike is forthcoming.
Regional equities:
- Nikkei -0.47%
- Shanghai -0.91%
- HK -1.19%
- ASX -1.20%
More:
- Signs of stress are multiplying in Japan's government bond market
- This is from earlier in the week but will make for useful holiday reading: The International Monetary Fund has asked China's central bank to disclose holdings of forwards and futures, which could shed light on more opaque methods of intervention used to support the yuan
- Goldman to Fed: Stop Worrying So Much About the Stronger Dollar
