Forex news for Asia-Pacific trading on June 8, 2016:
- Japan's largest financial company to abandon primary dealer role
- Chinese trade balance figures (much stronger imports)
- Chinese retail automobile sales up 11.4% y/y in May
- China maintains 2016 GDP growth estimate at 6.8% - PBOC paper
- Australia April home loans +1.7% vs +2.5% expected
- PBOC sets yuan midpoint at 6.5593 versus previous close of 6.5710
- SAFE says China forex demand and supply balanced in May
- Japan April current account surplus 1.87T yen vs 2.30T yen expected
- Japan Q1 final GDP revised to 1.9% from 1.7% (annualized)
- New Zealand Q1 manufacturing volumes -1.2% q/q vs +1.3% q/q prior
- BOE's Carney: Many of today's jobs will be gone tomorrow
- API weekly US oil inventories -3560K (close to expectations)
Markets:
- JPY leads, AUD lags
- Gold up $4 to $1247
- Japanese 20-year bond yields hit record low at 0.205%
- Nikkei 225 +0.6%
USD/JPY started at 107.35, fell to 106.75 and then climbed almost all the way back. Flows were the main driver of the decline but the GDP numbers cooled speculation about more BOJ action this year. The rebound came with the Chinese trade data. The better imports were seen as a good signal for the global economy.
The US dollar was generally weaker and that was reflected in mild cable and EUR/USD strength. Both climbed slowly and are up a handful of pips since the start of the trading day.
A better move came in NZD/USD as it slipped down to 0.6950 from 0.6972 but then climbed all the way back and up to 0.6990. It followed some early jitters in commodities and risk assets that were later erased. The RBNZ is tomorrow with the OIS market showing a 27.5% chance of a cut.
AUD/USD dipped down to 0.7430 from 0.7450 at the start of Asia-Pacific trading but bounced back after the Chinese data. The solid car sales numbers were another soothing data point and the PBOC affirmed the 6.8% growth target. The home loans data didn't move the market.
Oil is in focus. WTI crude is up another 17-cents and is making fresh 2016 highs. The level to watch is the October high of $50.92. Last at $50.54.
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