Forex news from the Asian trading session - 8 May 2018
Headlines:
- China April trade balance ¥182.8 bn vs ¥189.2 bn expected
- New Zealand Q2 2-year inflation expectation 2.01% vs 2.11% prior
- Here's a closer look at the Australian retail sales data miss earlier
- Australia March retail sales 0.0% vs +0.2% m/m expected
- PBOC sets USD/CNY reference rate at 6.3674 vs 6.3584 yesterday
- New Zealand ministry sees slower growth in tourist arrivals, spending
- Japan March household spending -0.7% vs +1.0% y/y expected
- Senior Trump Official: Trump will request $15B in spending cuts from Congress
- NZ 9-month budget surplus at NZD 910M higher than forecast
- NZ ANZ Truckometer heavy 1.4% vs prior -0.3% last month
- Feds Kaplan speaks to reporters: We should be removing accommodation gradually
- Fed's Kaplan: Lots of stimulus in economy amid tight labor market
- NY Times: Pres. Trump is likely to scrap Iran nuclear deal
Markets:
- JPY leads, AUD lags behind on the day
- Asian equities are higher on the day (Hang Seng +1.2%)
- Gold down by 0.17% to $1,311.87
- WTI down by 1.26% to $69.85
- US 10-year yields flat at 2.95%
- Bitcoin down by 0.14% to $9,424
The focus of the market right now is on the Iran deal, as Trump said he will make his decision at 1400 ET. The expected outcome is that he will be leaving the deal, but there's still a lot of possible twists to expect from the headlines and from his decision.
Oil is the biggest loser from all of this thus far, now falling to $69.85 after touching near four-year highs yesterday at $70.80 levels. And the drop in oil is also weighing on the Canadian dollar, with the loonie being the second worst performer on the day behind the aussie.
As for headlines during the session, the key one was the retail sales data for Australia and it missed estimates for both the month and the quarterly figures. The aussie was marked lower as a result and trades around the 0.7500 currently.
The poor data there will weigh on Q1 growth surely, and may cause a bit of a rethink in the RBA's recent stance to be slightly more bullish on the economy.
Leading the way on the day is the Japanese yen as the currency stays bid ahead of the uncertain outcome of Trump's announcement later. The dollar though is holding steady, sitting right behind the yen in terms of performance so far. USD/JPY fell to a low of 108.85 earlier in the session but has since recovered to trade around 109.00.
Other major pairs saw little action on the day with ranges still relatively tight. Apart from that, we also had Chinese trade balance figures for April released and they were indicative of solid global demand as the impact of trade tariffs can hardly be noticed from the report. Though the report has done little to stem the bleeding in the aussie on the day.
