Forex news for Asia trading on July 29, 2019
- Hong Kong's Hang Seng index extends decline to over 1%
- China starts anti-dumping probe on chemicals from US, EU, and Japan
- Vietnam has a $200M trade surplus in July
- Australia's HIA new home sales rose 0.8% in 2Q
- Former Fed Chair Yellen endorses a 25 bp cut in rates this week.
- PBOC sets USD/ CNY reference rate for today at 6.8821(vs. Friday at 6.8796 )
- Bloomberg: Japan's Government Pension Investment Fund has started to hedge overseas bond investments
- ECB Nowotny sees rates to be lower in the long-term vs historical norms
- Japan retail sales for June +0.0% vs -0.3% estimate
- Japan's PM Abe: Unlikely to meet South Korea's Moon at UN in September
- UK Trade minister Truss: Main priority is free-trade deal with the US
- Conferation of British Industry: Neither the EU nor Britain are ready for no-deal Brexit
- China industrial profits June YoY fall -3.1%
- The major releases and highlights for the trading week
- Here is what is on the economic calendar today
- Dan Coats to step down as Director of National Intelligence
In other markets:
- Gold is up $1.76 or 0.12% at $1420.50
- WTI crude oil is down -0.10 or -0.18% at $56.11
- The JPY is the strongest. The GBP is the weakest.
The weekend was fairly quiet from the news front. China industrial profits did slump by -3.1%, hurt by tariffs and slower growth. This week, US and China representatives will be getting back together for the first time since the talks fell apart in May. The expectations are somewhat dialed back, but risk remains high, and global growth stories - not just for the US and China but other nations of the world - are reliant on coming to some conclusion. It is just hard to see it anytime soon.
In other news from China, it was reported that China was starting an anti-dumping probe on chemicals from the US, EU and Japan. Although has hinted that they would buy more US soybeans, probes into anti-dumping, unfair subsidize, manipulation of currency, are evidence of the long road ahead. PS. the offshore yuan shot up at the end of the Asian session to the highest level since July 8th. PSS China reported a -2.5% decline in soybean imports from the US over the weekend for the month and a plunge of -62.6% from last year.
The GBP is the weakest of the majors in the early trading for the week. Over the first weekend of the PM Johnson era, the Conferation of Business Industry, said that neither the EU nor Britain are ready for no-deal Brexit. Michael Gove wrote in Sunday Times, that "No deal is now a very real prospect, and we must make sure we are ready" Gove will lead a "war cabinet" of six senior ministers instructed to oversee revamped preparations. In other weekend headlines from the UK, Johnson's most senior aide Dominic Cummings told key advisors that Brexit will happen by any means necessary and that PM Johnson is prepared suspend Parliament or hold an election to thwart those who may seek to block a no deal. The GBPUSD moved to new 2019 lows and the lowest level since April 2017 (the low reached 1.2361).
The USDJPY got a shove lower from an article on Bloomberg saying that Japan's Government Pension Investment Fund has started to hedge it's overseas bond investments. Since they are likely long a boat load of US notes, and bonds - and bought dollars to do that - it would imply selling USDJPY. The USDJPY moved from 108.64 to around 108.41 before rebounding back higher.
The EURUSD traded most of the early Asian session above the closing level from Friday of 1.1128 (the high reached 1.11382). The pair got close-ish to the falling 100 hour MA which his currently at 1.11457. However, seller reentered and have pushed the price back below the Friday close to 1.1125. Last Wednesday the low reached 1.1126. On Thursday and Friday, there were swing lows at the 1.1124-26. Admittedly, the price did move below that area on both days on the way to lows at 1.11007 and 1.1111, but a move below the 1.1124-26 should give sellers the courage to retest those 2019 low levels.
In the equity markets, the Hang Seng index is trading down -1.2% on increased tension on the streets of Hong Kong (8th straight week of protests).
The South Korean Kospi was presurred (down -3%) as trade tensions between Japan and South Korea, threatens to slow supply chains and drive up prices of memory chips and smart phones. That would also slow down other economies reliant on their goods.
