Forex news for Asia trading Friday 7 February 2020 Asia FX news wrap:
There was a resurgence in China-coronavirus related news again today. I've grouped it (roughly) together for those interested to check through and for those not to easily skip over
- Trump and Xi reaffirmed commitment to phase one trade deal implementation
- Chinese media report US and China Presidents Trump and Xi spoke over the phone
- Honda says will keep its factories closed in Wuhan through until Feb 13
- PBOC vice gov Pan says falls in markets rates will be reflected in LPR
- Individuals in Shanghai who conceal coronavirus contact will be put on the city’s credit blacklist
- China CBIRC vice chair says coronavirus will not have a big impact on China's financial system
- PBOC vice gov Pang says will strengthen counter-cyclical adjustments
- Moody's says the coronavirus outbreak, travel restrictions a credit negative for Australian banks
- China's vice fin min says will ensure fiscal funding for coronavirus control
- Fitch says coronavirus epidemic will be negative within and beyond China
- 61 passengers on ship quarantined in Japan with coronavirus - 11 are reportedly from the US
- Toyota factories in China will remain closed until February 17 at least
- Despite the censorship, China is in a rage over the death of the coronavirus truth telling doctor
- PBOC sets USD/ CNY reference rate for today at 6.9768 (vs. yesterday at 6.9985)
- The news from the cruise ship moored in quarantine in Japan is awful - coronavirus cases aboard are soaring
- A further 41 people aboard the cruise ship in quarantine in Japan have tested positive for the coronavirus
- Japan economy minister Nishimura says coronavirus starting to impact economy
- China official updates its total coronavirus cases to 31,161 (from 28,018 yesterday), death toll 636
- Updated coronavirus figures from Hubei province in China - more than 2000 new cases confirmed yesterday
Other (plenty of RBA in here):
- North-western Australian ports shutting down for cyclone impact
- New Zealand 2 year inflation expectations rise to 1.93%
- A survey has shown UK shops reporting their biggest sales jump in 6 years
- RBA SoMP: Bank has been discussing the case for further easing
- Fed's Quarles says he is hopeful phase one deal with China will boost us exports
- RBA Gov Lowe says discussed the case for lower interest rates 'extensively' during the February meeting
- RBA Gov Lowe says the Australian dollar is at its lowest level in a decade because rate cuts
- Japan data - Household spending for December -4.8% y/y vs. -1.7% expected
- Japan data - (wages) real cash earnings -0.9% y/y vs expected -0.9%
- RBA Gov Lowe on coronavirus - large risk to Australian economy
- RBA Gov Lowe says inflation probably will be back in target band next quarter
- RBA's Lowe in speaking in parliament - very optimistic again
- TD on the AUD and RBA .... "The RBA are a relaxed bunch at the best of times"
- Australia AiG Services PMI for January: 47.4 (prior 48.7)
- Downgrade for Japan GDP forecast - a recession is now the most likely scenario
- Trade ideas thread - Friday 7 February 2020
And, coming up:
- Its jobs day in the US and Canada. What are the estimates looking for?
- US January nonfarm payroll report is due Friday 7 February 2020 - preview
Narrow ranges prevailed across major FX pairs again here in Asia today. Net we have seen a very slight move against risk, AUD/JPY (for example) losing a few points.
Reserve Bank of Australia Governor Lowe spoke, for about three hours, in front of a parliamentary committee (one of his twice a year appearances in parliament). The RBA also released its SoMP, that is Statement on Monetary policy (a 4 times a year publication). There is plenty in the bullets above but in a nutshell Lowe was net upbeat and the SoMP produced another set of what will prove to be over-optimistic forecasts (if recent years' forecasts are any guide).
But it wasn't the credibility of the RBA that weighed on the AUD today (in that small range mentioned) but coronavirus developments. The catalyst for the AUD/JPY drop was the news that the cases aboard the cruise ship tripled from 20 yesterday to 61 today (see bullets above). There was plenty of other coronavirus-related news today but that seemed to hit risk the hardest... again, small ranges though.
The Japanese data we got today was bad. Household spending collapsed in December.
The Shanghai Composite has nudged a little lower on the session so far. On Monday it was hit hard (reopening after the long holiday) and since has rebounded little, but just a touch softer today. Risk will likely further be pared ahead of the weekend in case the news flow deteriorates over the two days.
