Forex news for Asia trading Tuesday 9 August 2016
- More on NAB's call for RBA to cut to 1%
- Morgan Stanley strategist says negative rates policy undermines confidence
- More on the China CPI and PPI for July
- China's recent stabilization in growth ... but what's the cost?
- AUD losing some ground after softer data this morning
- Australia - NAB Business Conditions 8 (prior 12) & Confidence 4 (prior 6) for July
- China July CPI: 1.8% y/y (expected 1.8%) and PPI -1.7% y/y (expected -2.0%)
- PBOC sets USD/CNY central rate at 6.6594 (vs. yesterday at 6.6615)
- NZ private inflation gauge -0.3% m/m
- BOJ September meeting - here's what's expected (yes, already!)
- Goldman Sachs says the path of least resistance for AUD to continue higher
- China press says PBOC unlikely to inject large-scale liquidity into the market
- Japan data: M2 up 3.3% and M3 up 2.9% y/y
- Australia - Roy Morgan ANZ weekly consumer sentiment: 114.7 (prior 118.00)
- BoE's McCafferty says bank taking gradual approach on Brexit impact
- UK data - BRC Sales on a like-for-like basis (July): +1.1% y/y (expected -0.7%)
- New Zealand - Card spending for July: 'Retail' +0.3% m/m (expected +0.1%)
- NZIER’s Shadow Board recommends the RBNZ cut
- NZ data - ANZ Truckometer for July: -5.7% m/m (prior up 4.7%)
- CIBC on the RBA and AUD, call it to 0.70 by year end, but note risks
- Tuesday trade ideas thread - 9 August 2016
- Buy the USD? Goldman Sachs says 'Yes', Morgan Stanley says 'No'.
- Overnight news - OPEC 'informal' meeting in Algeria September 26-28
Early NZD moves popped a few stops above 0.7145, taking the currency toward 0.7160 but not sustaining. After that it was a bit of a question as to which straw it was that broke the camel's back today, with GBP, AUD, EUR all lower (and NZD back to opening session lows).
Some commentary from Bank of England Monetary Policy Committee member Ian McCafferty (writing an op-ed in The Times) to the effect that the bank was prepared to do more weighed on Cable.
The weight was added to with a piece from Xinhua News Agency suggesting the PBOC would keep a rein on liquidity. The Xinhua piece also seemed to help soften AUD and NZD, and even EUR. AUD and NZD also saw some less good data today (see bullets above).
I hesitate to point a finger at any one of these items, but put them all together and sentiment towards the currencies took a step back.
Cable managed to get below 1.3 (stops under the figure) and eyes are now on the 1.2970 area, with more stops reportedly below.
AUD was further impacted by slightly lower business confidence and conditions data, which I'd be putting into the 'less good' basket rather than 'bad' ... but still, AUD dipped toward 0.7620. Again with the straw on the camel's back analogy, NAB changed their call for RBA rate cuts today. They were previously saying the central bank would be on hold through Q3 of 2017 but today altered their call, and are now looking for two RBA rate cuts (May and August 2017) and the possibility of 'non-conventional' policy measures if the economic outlook deteriorates further.
We also got CPI and PPI data from China today (for July). The CPI came in slightly lower on the month, while the PPI continues to show a slower pace of deflation at that level.
Yen took a back seat today.
Cable (15 minute candles):
Regional equities:
- Nikkei +0.37%
- Shanghai +0.29%
- HK -0.13%
- ASX +0.17%
