Forex news for Asia trading for Wednesday 3 March 2021
- Reports a Chinese group has defaulted on 915m yuan of commercial bills
- China Global Times says: Link between HK man's death and Sinovac vaccine 'highly unlikely'
- Japan will decide on emergency declaration Tokyo extension on Thursday
- Nomura favours AUD over EUR
- More on the comments out of China yesterday on a bubble forming domestically in its real estate market
- China February Caixin PMI Services 51.5 (expected 51.5, prior 52.0) & Composite 51.7 (prior 52.2)
- BOJ's Kataoka says 2% inflation is hard to foresee
- TD forecasts EUR/USD down, cite lagging economic recovery in EZ
- PBOC sets USD/ CNY mid-point today at 6.4565 (vs. yesterday at 6.4625)
- Shares in the Bank of Japan (yes, really) have hit limit up the 3rd day in a row
- Australian Treasurer Frydenberg says there will be a time when rates go up, threatening financial stability
- Japan - Jibun Bank/Markit Services 46.3 and Composite 48.2 PMI (final) for February
- Australia GDP for Q4 2020 +3.1% q/q (expected +2.5%)
- Goldman Sachs forecasts a jump for US inflation, but to subside by year-end
- UK BRC Shop Price Index for February: -2.4% y/y (prior -2.2%)
- New Zealand - ANZ Commodity Price index for February +3.3% m/m(prior +3.6%)
- NZD long-term fair value model: 0.80 - 0.81
- NZD traders - ANZ NZ revise its milk price forecast higher
- China financial press says the PBOC may (targeted) cut the RRR this month
- AUD/USD forecast to 0.8150, not high enough yet make the RBA angry
- UK's Sunak will extend the furlough for UK workers through the summer, to end-September
- Australia - Markit Services 53.4 and Composite 53.7 PMI for February (final)
- Trade ideas thread - Wednesday 3 March 2021
- New Zealand Building Permits for January +2.1% m/m (prior +5.1% m/m)
- Private oil survey data shows a large build in headline crude inventory
- Australia AiG Construction PMI for February 57.4 (prior 57.6)
- US President Biden says every American can get vaccinated by the end of May
- Fed's Daly says inflation spikes will be shortlived
It was a subdued day indeed for major FX in Asia. EUR/USD has barely managed a 10 point range, crabbing along sideways circa 1.2085/90 and change.
Early in the session (late US afternoon) were comments from US President Biden saying he expected now every American could get a vaccination by the end of May. This is of significance as the previous expected for this to occur was July, quite the acceleration and a big positive for the US economy reopening. Also early on in the session was the news that the UK Chancellor is to extend the worker support (furlough) program in the country right through until the end of September.
On the data front the focus was Australian Q4 GDP which grew 3.1% q/q. In Q3 it was +3.4% q/q, and thus the first time in 60 years Australia has had 2 consecutive quarters of +3% growth. Growth y/y for Q4 was still negative, -1.1%, but given its now the first week of March it is very likely indeed that the Australian economy is now larger than pre-Covid. Meanwhile, the labour market is still growing, infrastructure spending is rocketing, the housing market is on fire, and monetary policy is very, very easy indeed. The RBA may very well face a tough task trying to hold down rates ahead.
As already said, major FX was quiet with the majors little net changed on the session here as I update.
