Forex news for Asia trading Wednesday 5 February 2020
- ICYMI - the central bank in Singapore adjust monetary policy via the exchange rate, not interest rates
- Singapore dollar on the move lower after the central bank comments on easing
- More again from RBA Gov Lowe: Can see case for further easing but there are risks
- Singapore's central bank says room to ease given coronavirus concerns
- More from RBA's Lowe - says again wants government fiscal support
- US President Trump delivers his third State Of The Union Address - live link
- Shanghai Composite gaining in early trade
- China Caixin Markit PMIs for January: Services 51.8, Composite 51.9, both down
- BOJ' dep gov Wakatabe - BOJ won't hesitate to take further easing steps if needed
- RBA Governor Lowe says board continue to discuss further monetary stimulus
- PBOC sets USD/ CNY reference rate for today at 6.9823 (vs. yesterday at 6.9779)
- FX option expiries for Wednesday February 05 at the 10am NY cut
- Ex-Fed chair Janet Yellen says coronavirus is a risk, but past epidemics had limited impact on economy
- Reuters polling show gains expected for EUR and USD
- A couple of other PMIs from Asia for January - Singapore and Hong Kong both improve
- Japan January PMIs: Services 51.0 (prior 52.1) & Composite 50.1 (prior 51.1)
- ANZ project negative economic growth in Q1 for Australia - what the RBA will do
- New Zealand - ANZ Commodity Price index for January: -0.9% m/m (prior -3.4%)
- Japan confirms 10 people on cruise ship have coronavirus
- China updates total coronavirus cases to 24,324 (from 20,438 yesterday)
- Australia - ANZ forecast negative GDP for Q1 2020
- Westpac on the RBA statement yesterday: "brave" assumptions. To cut in April.
- Ahead of markets in China opening for Wednesday - support measures so far and here is what is still to come
- Capital Economics on the RBA - their outlook is too optimistic, will have to cut rates twice again this year
- China's Hubei province now has 479 deaths from coronavirus, and 3,156 new cases
- Australia CBA services PMI 50.6 (prior 49.8), & Composite 50.2 (prior 49.6)
- NZD response to the employment data - headline looked good but the details, no
- NZ Q4 2019 jobs report. Unemployment rate 4.0% (vs. expected 4.2%)
- Private oil data shows larger than expected build in crude oil inventory
- Australian AIG Construction Index (PMI) for January : 41.3 (vs 38.9 prior)
- Trade ideas thread - 05 February 2020
There was quite a lot for the market to focus on today:
- NZ jobs report
- Developments on the coronavirus outbreak
- RBA Governor speaking
- BOJ Dep Gov speaking
- And US President Trump's SOTU address
Chinese stock markets stabilised further today. I did a post earlier on the efforts to calm markets in the country (see bullets above) - its worth checking out as there is al,so a list of what is yet to come.
For currencies, NZD and AUD movers. Singapore dollar also.
NZD added a few points after the jobs data (see bullets above) but was unable to hold onto the gains. The u/e rate dropped but a fall for the participation rate took some fo the shine off.
AUD/USD responded to the comments from RBA Governor Lowe. There was a speech followed by a Q&A but in brief, what he said was:
- If the Bank does not see progress on u/e and inflation they'd consider a rate cut, but there are risks.
Given the history of the RBA under Lowe, which is not taking action until its way too late, the market read his comments as no rate cut for now. Fair enough. AUD popped a bit higher but as of positing has come back mid-range.
The SGD weakened sharply with the Monetary Authority of Singapore indicating it had room to ease if needed over the coronavirus impact. For those who are not aware the MAS conducts monetary policy by adjusting the parameters of where the SGD trades, not via interest rates. That is, through direct adjustment of the exchange rate of the SGD.
Elsewhere, little change for EUR, GBP, (cable down a few tics), yen, CAD Oil is reasonably steady for the session, as is gold.
