Forex news for Asia trading Friday 9 June 2017
Ladies and gentlemen, I haven't included all the headlines from the session, most of them were related to ongoing results seat by seat from the UK election and are not below. I've ncluded the major items
- There are only two things that are certain after the UK election
- Forex technical analysis: USDJPY looks to test 200 day MA
- Conservative minority increasingly likely, if not certain
- UK election: 550 seats declared: Cons 256, Lab 231
- If the Conservatives abandon Brexit it could be a stroke of genius
- Forex technical analysis: EURGBP trades up and down in the top half of the range
- DUP leader says the party has always found it difficult to work with Corbyn
- UK election: Count so far, with 500 of the 650 seats declared: Cons 220 Lab 221
- There's headline coming that could give a lift to GBP
- Three (and a half) reasons the pound trade could turn into another US election-night U-turn
- Pound tumbles as exit poll says Conservatives fail to achieve overall majority
- Pound plunges as exit poll shows disaster for Theresa May
- UK election - exit poll: Conservatives 314, Labour 266
Other:
- China (May) CPI 1.5 % y/y (expected 1.5%) & PPI 5.5% y/y (expected 5.7%)
- Australia - April home loans: -1.9% (expected -1.0%)
- PBOC sets USD/CNY mid-point today at 6.7971(vs. yesterday at 6.7930)
- Saudi, UAE, Egypt, Bahrain designate 58 individuals, 12 entities in Qatar as Terrorist
Market eyes were on the UK election counting. The night began with the exit poll, which showed the Conservatives were likely to win a majority of seats but not enough to govern outright. As the majority seat winners they'd get first crack at forming a coalition government (likely supported by Northern Ireland's DUP), but the perception is this weakness the UK negotiating position in Brexit. GBP took a hammering, gapping down 150+ points and falling further.
Official results started to trickle out about an hour later, with the poor exit poll (poor for the Conservatives) confirmed - Labour outperformed very strongly in most seats and have since chalked up multiple gains (many more than the Conservatives have).
Long story short, it is looking like the result will be indeed be a 'hung' parliament, with the Conservatives forming a government in coalition. About the only certainty appears to a period of instability for the UK, with questions now on how to manage (or even if there will be) Brexit.
GBP waxed and waned as seats were declared, in a wide range of 100+ points.
Counting and seat declarations will continue.
It was if the rest of the world was on hold, with little in the way of nes or data crossing through the session apart from the UK election. There were a few items, though, and some FX movement elsewhere.
Australian housing finance data (for April) showed a reduction in investor lending. This is likely in response to both new restrictions being brought in and a diminishing in enthusiasm for residential investment (sentiment has turned a little weaker for housing). Authorities in Australia have been worrying, and publicly so, about housing-related debt, so this will be welcome.
In China we got inflation data for May, CPI in line with, and PPI slightly under expected.
Currencies fell alongside the pound earlier, not nearly to the same extent but a touch weaker overall. EUR, CHF, AUD and NZD all lower. NZD has got a rocket up it since, though (relatively speaking), up 30 or so points from lows. AUD, CHF and EUR have all retraced a little, but are losers compared with the NZD/
USD/JPY is higher on the session, with little fresh news norJapan today to point the finger at. USD/CAD is little net changed, while gold has slipped a few dollars.
Regional equities:
- Nikkei +0.60%
- Shanghai +0.07%
- HK -0.20%
- ASX +0.11%
