Forex news for Asia trading Friday 4 March 2016
China:
- PBOC official on the yuan: Govt won't play dominant role in offshore mkt
- Coming up from China this weekend - the official 2016 GDP forecast
- The yuan 'basket of currencies' comments from PBOC - more
- More from PBOC's Yi: Monetary policy will depend on economic data
- People's Bank of China (PBOC) sets yuan reference rate at 6.5284
- PBOC open market operations: Inject 50bn yuan today (via 7-day reverse repos)
- China to use the National People's Congress to water down yuan fall expectations?
- BOJ's new board member seems to be even more dovish
- NZ govt authority warns of FX broker false claims
- Kuroda comments on ECB negative rates! (Euro yawns)
- Japan election this year? 90% sure, says this Abe aide
- Japan economy minister Ishihara: Here's another advisory panel
- Australia - Retail Sales for January: +0.3% m/m (expected +0.4% m/m)
- Goldman Sachs preview and tip for the NFP report
- Japan - Labor Cash Earnings for January: +0.4% y/y (expected is +0.4%)
- US-based junk bond funds see their highest inflows ever recorded
- North Korea's nukes to be readied for use at a moment's notice
- AUD/USD & NZD/USD orders
- Ahead of the NFP on Friday - another huge US retailer hikes wages
- Trade ideas thread for Friday 4 March 2016
USD/JPY fell during the Tokyo morning toward 113.20 but has since come back to be little changed on the session around 113.60 odd. A new BOJ board member was announced today and he appears to be more dovish than the board member he is replacing (see bullets, above). Most of the yen crosses followed a similar pattern, down then a bounce. EUR, CHF and GBP against USD were all subdued within small ranges.
Australian retail sales came in ahead of the previous month's results, but below expectations. There were two completely different takes on the data, both of which sound reasonable and are being made by sensible analysts. One is that the data was disappointing and points to slowing spending momentum after the positive surprise in the Q4 GDP report. The other is that despite the miss and slowing its still proceeding at a healthy clip, which is being confirmed in strong vehicle sales. I'm going with the second interpretation, but choose a side you're comfortable with.
AUD/USD spent much of the day in a holding pattern after the overnight gain. It dipped under 0.7340 very briefly after the data and since has made a new high (compared to overnight) ... but failed to sustain it.
NZD/USD dipped early and then spent the session inching back toward overnight highs.
Plenty of activity from China today ahead of the opening of the National People's Congress this weekend. The People's Bank of China set the yuan higher again today (USD/CNY lower); its expected that the Congress will attempt to water down expectations for further yuan devaluation.
Along with the reference rate set we got OMO news, notable for the PBOC confirming a weekly drain of net 840bn yuan from money markets, the biggest in 3 years. This is not just mopping up liquidity after the Chinese New Year but also after the reserve requirement ratio cut earlier in the week (the RRR cut effectively injected around 685bn yuan into the system). Rates have barely moved this week, which will satisfy the central bank's prudence and stability goals.
Regional equities:
- Nikkei +0.14%
- Shanghai -0.31%
- HK +0.70%
- ASX +0.37%
Still to come:
- US NFP is a biggie - here's a preview from Goldman Sachs, and don't forget the competition with two big prizes!
- Coming up from China this weekend - the official 2016 GDP forecast
More: Hot Money Rolling Into China Property Seen Deflating Bond Bubble
