Forex news for Asia/Pacific trading on July 31, 2019
- China Global Times editor: The US/China atmosphere is good at talks
- Crude oil working on 5 day winning streak
- Australia private sector credit for June +0.1% versus 0.3% estimate
- Australia CPI for 2Q 0.6% vs 0.5% estimate
- PBOC sets USD/ CNY reference rate for today at 6.8841(vs. Tuesday at 6.8862 )
- China Manufacturing PMI for July 49.7 vs 49.6 estimate
- ANZ business confidence for July - -44.3 vs. -38.1 last month
- Japan June Loans and Discounts to Corp YoY rise 2.73%
- BRC shop price index YoY for July -0.1% versus -0.1% last month
- UK GfK consumer confidence for July -11 vs -13 estimate
- The major option expiries for Wednesday's 10 AM ET expiration cut
- Japan defense ministry: North Korean projectiles did not reach Japanese EEZ
- Any trade ideas for the new day?
- Gold ends the NY session up about $4. Stalls rally at the high from last week.
- North Korea fired multiple unidentified projectiles early Wednesday
- Weekly private inventory data show crude oil draw of -6.024M vs. est. -2.5M
- Apple reports EPS earnings of $2.18 vs est. of $2.10
In other markets:
- Spot gold is down -$2.66 or -0.19% at $1428.25
- WTI crude oil is up $0.40 or 0.67% at $58.45. The private inventory data showed another big draw of -6.024M barrels
Asian stock indices traded lower on US/China trade concerns. A snapshot shows:
- Nikkei225, -0.75%
- Hang Seng, -1.13%
- Shanghai composite, -0.53%
- Kospi -0.22%
- S&P ASX 200 -0.20%
Although lower, the indices are off their lowest level. There was a tweet by the China Global Times editor, Hu Xijin that seemed to correspond with a rebound. He tweeted:
Chinese and US negotiators started talks again. Based on what I know the atmosphere is good. I hope this beginning indicates the future talks will be smoother than various pessimistic predictions.
Although Trump tried to walk back some of his comments, the markets were not encouraged by his criticism of China for not buying US agricultural products and making promises but not delivering. As a result, the comments from Xijin were a positive shot in the arm for stocks at least.
On the economic front, the markets were reminded of the headwinds from trade with another reading below 50 for the China manufacturing PMI data.
Although the number for Manufacturing was a touch higher than expectations at 49.7 vs 49.6 (and above the 49.4 reading last month), it was the 3rd month in a row below the 50 dividing line between expansion and contraction for China .
Moreover the non-manufacturing PMI was lower than expected although still above the 50 level at 53.7 vs 54.0 estimate and 54.2 last month. New export orders were well below the 50 level at 46.9 for manufacturing and 48.4 in non-manufacturing.
The NZDUSD took the news the hardest but was also helped by weak ANZ business confidence data (-44.3 vs -38.1 estimate). The NZD is the weakest of the major currencies. The NZDUSD fell from a high of 0.6618 to a low of 0.6589, before nudging up a bit (trades at 0.6596 currently).
Although neighbors, the AUD is the strongest of the majors so far. For it, a stronger QoQ CPI number of 0.6% vs 0.5% and 1.6% YoY helped to bottom the AUDUSD after 8 straight down days. The AUDUSD has moved up from a low of 0.6862 just prior to the release, to 0.6895 (trading at the highs as I type). After 8 days down in a row, a close above the 0.6872 will break that string if it can hold the gains, but the corrective sledding is always tough after a trend move lower. The 100 hour MA is moving down and trades at 0.6916. That will be a tough hurdle should the rally continue.
For pairs like the EURUSD and the GBPUSD, each traded in a narrow range (EURUSD about 10 pips and GBPUSD 22 pips). The EURUSD sits between the falling 200 hour MA above at 1.1166 and the 100 hour MA below at 1.11392. The GBPUSD after the tumble from 1.2516 on Thursday last week, to the low on Tuesday at 1.2118 (nearly 400 pips in 4 days), the rest can be expected. However, the upside is still limited.
Up ahead in the European session is CPI in Europe, German retail sales and unemployment. In the US/NA session, ADP employment estimates, Canada GDP, and of course the long awaited FOMC cut in rates. The Fed last changed rates in December 2018 with a hike, but it has not been since way back in December 2008 that they last lowered rates. That's a long time. That string will end tomorrow at 2 PM ET.
