Forex news for Asia trading Wednesday 5 July 2017
- Australia press: RBA cash rate: Concern about the dollar keeps bank's hands tied
- Australia hits new-car sales record in June
- "North Korea's genuine ICBM missile is a dangerous milestone"
- China Caixin/Markit June PMIs: Services 51.6 (prior 52.8) & Composite 51.1 (prior 51.5)
- Goldman Sachs: 'low volatility regime' in markets might need a war or recession to shift
- (More from China) - Bond Connect has potential to shift PBOC policy
- More from China - shadow banking lacks sufficient regulation
- PBOC sets USD/CNY reference rate for today at 6.7922 (vs. yesterday at 6.7889)
- New Zealand - ANZ Commodity Price Index for June +2.1% m/m (prior +3.2%)
- PBOC panel says China's economy is stable amid complex conditions
- Japan (June) PMIs - Services 53.3 (prior 53.0) & Composite 52.9 (prior 53.4)
- A little USD weakness across the board as Asia gets active
- USD/JPY slipping further, under 113 now
- Australia services PMI for June 54.8 (prior 51.5)
- More on the RBA - RBC have dropped its forecast for one more cut
- UK data - BRC Shop Price Index for June: -0.3% y/y (prior -0.4%)
- Forexlive Americas FX news wrap: Just the headlines!
- UN Nth Korea meeting on Wednesday. (Also, more now on US/SK missiles.)
- RBA recap - "feels like an important change in tone ... not a major change in outlook"
- Yen - on the move with the North Korean headlines?
- US Sec State Tillerson - N Korea ICBM launch a new escalation
- NZ data - ANZ job ads for June up 1.3% m/m (prior -0.6%)
- N Korea says ICBM launch tested stage separation, warhead re-entry, late-stage control
- RBA recap - no forward guidance (but here's what to watch ahead)
- RBA recap - 4 changes, and 2 notable absences
- Goldman Sachs outlook for Bank of England monetary policy, & GBP forecast
- Trade ideas thread - Wednesday 5 July 2017
- WSJ: Federal Reserve eyes September announcement on balance-sheet reduction
- Moody's on Qatar - affirms rating, changes outlook to negative
- Forex technical analysis: AUDUSD stays below topside resistance in London/NA session
- Economic data due from Asia today - more China PMIs
Coming off the US holiday the start of Asian trade in NZ and Australia was with thinner liquidity than normal. Early news of US/South Korean firing off test missiles into the East Sea marked potential escalation of the conflict with North Korea:
- N Korea says ICBM launch tested stage separation, warhead re-entry, late-stage control
- US Sec State Tillerson - N Korea ICBM launch a new escalation
- Yen - on the move with the North Korean headlines?
- UN Nth Korea meeting on Wednesday
(And more here: "North Korea's genuine ICBM missile is a dangerous milestone")
There were flows into the yen, USD/JPY falling from just above 113.30 to under 112.85 a good few hours later. Yen crosses, similarly, slipped lower.
EUR/USD managed a gain of 25 or so points from its early session lows. The CHF (against the USD) is also a little higher, as is cable (GBP/USD up 30 or points on the session). The weaker USD was also reflected in AUD/USD but NZD/USD is little net changed at all. After its overnight strength (BOC Governor Poloz donned his little hawk hat in speaking the German press) the CAD too is little changed against the USD.
Today we got the final set of PMIs from China for June, the Caixin Services/Composite indicators. These were a little softer than in May; they are both still in expansion but they do indicate a degree of slowing that was not evident in the official surveys:
- China manufacturing PMI for June: 51.7 (expected 51.0)
- China non-manufacturing PMI for June: 54.9 (prior 54.5)
And in the Caixin manufacturing survey
Also from China, the People's Bank of China skipped offering funds in open-market operations for a ninth day today, in effect draining net 90b yuan in open-market operations (due to maturing reverse-repurchase agreements). The PBOC statement said there is once again ample liquidity in the banking system.
The Bank has effectively drained more cash in the past two weeks (660bn yuan) than it had injected from June 1 to June 19 (540b yuan) amid funding demand ahead of quarter-end.
Regional equities:
- Nikkei -0.14%
- Shanghai +0.24%
- HK +0.38%
- ASX -0.26%
