ForexLive Asia FX news wrap: Happy Original Brexit Day!

Forex news for Asia trading Monday 4 July 2016

News from the land downunder

S&P say they may cut Australian rating if budget gridlock continues
Fitch says the close Australian election could mean a changed fiscal outlook
Australia - ANZ Job Advertisements for June: +0.5% m/m (prior +2.4%)
Australian Building Approvals for May: -5.2% m/m (expected -3.5%, prior +3.0%)
Australia - Melbourne Institute inflation gauge (June): 0.6% m/m (prior -0.2%)
Moody's: Short-lived political uncertainty has limited credit implications for Australia
HSBC chief economist Bloxham: AAA credit rating at risk
What does a hung parliament mean for the Australian economy, dollar?
Australian election result - not yet ... Still too close to call

Monday:

China: 9 of 15 respondents predict a bank bailout within two years
Brexit - Carney to outline new tools to support economy, lending, encourage investment
Brexit will weaken the ability of the remaining non-euro members to shape financial regs
Germany's Finance Minister Schaeuble: Wants EU governments to set cooperation pace
Oil again - Rally Threatened as Gasoline Supply Surge Swamps U.S. Demand
Oil - Russian crude exports are on track to set a record this year
UBS on the Chinese yuan: End 2017 forecast to 7 - 7.2
NZ says Brexit impact not considered likely to be significant, at least in the short term
Gold higher, AUD continues its recovery
People’s Bank of China sets yuan reference rate at 6.6472 (vs. Friday at 6.6496)
Japan - Firms' inflation expectations fall further
Brexit - British businesses launch legal challenge to Brexit
Europe weekend news - Renzi want to bail out Italy banks
Japan press - 55% say PM Abe should re-examine economic policies
Trade ideas thread - Monday 4 July 2016
Saudi oil minister says oil market heading towards balance
Brexit - FT report: George Osborne to slash corporate tax rate
Monday morning FX - 4 July 2016 - foreign exchange prices, early indications

Weekend:

20 people killed in Bangladesh terror attack
The surprising usefulness of ATR (Free indicator inside)
Bundesbank head Jens Weidmann - Brexit is no excuse to loosen EU budget rules
Norwegian oil workers sign new wage deal - avoiding strike

Happy Independence Day to all traders in the US - showing how a Brexit is really done.

AUD the early mover today, with a gap opening lower after an inconclusive result from the national election on Saturday. There was no further counting on Sunday, and there was none today (Monday). Counting starts again on Tuesday. Maybe its an RDO for the public servants or something. FFS.

Anyway, the AUD opened in the early goings on first thing Monday in New Zealand circa 0.7440. Its has spent pretty much the rest of the session regaining the gap and as I update is little changed from late US Friday trading.

The election hasn't been called yet, its too close to call, but what we have so far indicates (this is based on projections, but not official by any means) the current ruling party (led by PM Malcolm Turnbull) will likely win the most seats but not a majority. Thus, they'll have first crack at forming a minority government in combination with independents and Greens. Australia has had minority government before, from 2010-13 (correct me if I have those dates wrong). The fear is that fiscal consolidation will be unachievable and thus the AAA rating will be threatened (some say this wouldn't be a bad thing). Fitch and Moody's both released statements today that soothed fears somewhat, but we will have to wait to see what happens (as I update S&P have weighed in too).

Elsewhere across the FX rate world movement was minor. USD/JPY has managed a gain after an early Tokyo dip. EUR and, more notably, GBP both traded up against the USD. The NZD is little net changed and there isn't much in the CHF either.

Silver and gold rocketed today, silver to above $21 and gold to > $1355, but both have since dropped back just a little. I can't pin down any specific news but silver has been threatening higher for a few weeks.

Regional equities: