Forex news for Asia trading Monday 25 May 2020
- ICYMI: US likely to impose economic sanctions if China proceeds with proposed national security law for Hong Kong
- Equities - more gains ahead: risk backdrop improves, looks like 2009 recovery not 2008 bear
- More on that $2,000 gold forecast
- Australian preliminary trade figures show 'exports remain strong'
- Weekend reports of China incursion into India
- PBOC sets USD/ CNY reference rate for today at 7.1209 (vs. Friday at 7.0939)
- FX option expiries for Monday May 25 at the 10am NY cut
- AUD/USD to fall this week (bank notes)
- Japan economy minister Nishimura says state of emergency no longer needed anywhere in Japan
- CAD traders - heads up for Bank of Canada Governor Poloz speaking Monday
- A short GBP/JPY trade recommendation
- Coronavirus ICYMI: Australian government misjudged the cost of its JobKeeper program
- M5.2 earthquake in Taiwan
- Reports that the UK Cabinet is revolting
- A weekend of rising US-China strains (ICYMI)
- Japan has begun finalizing a coronavirus relief package of more than 100 trillion yen
- Coronavirus - US has restricted entry from Brazil
- Trade ideas thread - Monday 25 May 2020
- China says the US bill to delist Chinese companies is "directly targeting China"
- UK and US holidays Monday 25 May 2020
- FT reports that the UK is laying out a bailout plan for strategically important companies
- M 5.4 earthquake New Zealand, 95 km N of Wellington
- Hong Kong protests on Sunday - to oppose China's national security law
- Japan may remove the coronavirus state of emergency in Tokyo
- Monday morning open levels - indicative forex prices - 25 May 2020
Weekend:
- Technical look at the major currency pairs into the new trading week
- MUFG recommends GBP/JPY short trade
- Coronavirus - China 'potent' COVID-19 treatment will likely be ready before a vaccine
- US oil production is falling more steeply than expected
- Russian President Putin has ordered bail out measures for Russia's oil industry
- On the horizon next week - vote in US Congress to sanction China officials over human rights abuse
- China will not back down from "US quickening technology war mongering" - warn of "ample countermeasures"
- The PBOC is expected to cut interest rates, RRR in H2 to support the economy
- US to add 33 Chinese firms, institutions to an economic blacklist - accusation of helping China spy, links to WMDs
- 'Frugal 4' European countries oppose the German/French EUR500 bn fund - propose an emergency fund instead
- US accuses China government of blocking US airlines flying to China
- US administration is suspicious of China nuclear weapon tests - may do so too
- Major indices end mixed. 2nd weekly gain in 3 weeks for the major indices
Check out the headlines above for the ratcheting up of US-China tensions further over the weekend. These spilled over slightly into forex markets for the opening session of the new week with a small bid tone for the USD. Ranges were not large though. It could be a bit of a wait for the ranges to extend with a UK and US holiday ahead for Monday, although if there is any news flow to drive currencies, moves could be exacerbated with the lower liquidity than usual.
On the data front we had preliminary trade data from Australia today (preliminary only, it is subject to revision). The data showed exports lower on the month but nevertheless relatively resilient. Imports were down substantially, reflecting the weakening in domestic demand we have seen elsewhere due to the impact of the coronavirus outbreak and response.
From the People's Bank of China today we got a huge drop for the onshore yuan with the central parity rate weakened 270 pips from Friday's to the lowest level for the CNY reference rate since the end of February in 2008.
Weaker CNY mid-rate setting:
