Forex news for Asia trading Thursday 5 January 2017
- S&P's Kraemer says the likelihood of a hard Brexit is increasing
- Yuan "will likely consolidate around current levels before the Chinese New Year"
- Got $636,000? Congrats, you can buy this fish!
- HK offshore yuan overnight borrowing rate fixed at its highest since 12JAN2016
- Oil - 75% in SGX survey looking for $50 to $60 range for 2017, doubts over cut compliance
- Survey says: UK economy keeps momentum but inflation pressures mount
- Japan press - "Early elections in Japan look unlikely till fall, if at all"
- China NDRC approves 33.6bn yuan high-speed railway project
- China December Caixin Services PMI: 53.4 (prior 53.1) & Composite 53.5 (priors 52.9)
- PBOC sets yuan reference rate for today at 6.9307 (vs. yesterday at 6.9526)
- China - yuan liquidity tightening even further
- Ahead of today's USD/CNY setting ... the PBOC is getting its wish for a boost to the yuan
- Japan data - December Nikkei Services PMI 52.3 (prior 51.8) & Composite 52.8 (prior 52.0)
- USD/JPY testing 117.00
- Barclays on the December FOMC minutes: 4 observations
- Japan December monetary base +23.1% y/y (vs. +22.3% expected)
- German press cites economists wanting exit from loose EU policy
- Australia - Services PMI for December: 57.7 (smashing the prior of 51.1)
- This guy reckons the bond market will see a worse 'massacre' than 1994
- OIL - inventory survey shows a bigger than expected draw in US crude stocks
Early Tokyo traders walked in the door, looked at the FOMC minutes and hit the bid in the USD. And then hit the bid some more.
Overnight trade saw USD/JPY dip lower on the release of the Minutes, but recover in the following hour or so. By the time Tokyo traders arrived though USD/JPY had slipped back toward its overnight lows. From there it was a quick one-way traffic flow, sliding under 117 and all the way toward 116.25 before stopping for a breath. USD/JPY has since bounced a little, but is straddling 116.50 near the bottom the end of its session range as I update.
Meanwhile, EUR, CHF, AUD, and NZD all gained against the USD too, but it was the yen as the biggest winner.
Gold has had a stand-out session, up more than $10 from earlier in Sydney time. Oil is little changed; we got private inventory data earlier but the market is awaiting the official data on Thursday morning (US time).
The weaker USD overnight played out into the CNY fixing today. CNH had strengthened (against the USD) since Wednesday; and today the PBOC ratcheted up the CNY at its biggest gain since December 6 last year. In Hong Kong the funding squeeze on CNH continued:
- HIBOR rate for overnight contract is highest since January 12, 2016
- & the one-month interbank loan rate a one-year high
Regional equities:
- Nikkei -0.32%
- Shanghai +0.11%
- HK +1.30%
- ASX +0.30%
