Forex news for Asia trading Monday, May 13 2019
- Ahead of the UK open - PM May is promising to reopen Brexit talks with the EU
- Oil - Saudi energy minister says two of its vessels were targeted in an attack on Sunday
- The 2 to 4 week window to get a US China trade deal agreement
- Australian Housing finance approvals … disappointing
- Nomura on the RBA (rate cuts in August & November) and AUD (likely lower)
- HSBC revise yuan forecasts, also lower in near term but stable further out.
- China press on China should direct precision strikes at vital links in the US economy
- More yuan forecasts along the same lines as the Goldman Sachs forecasts
- Australia, March housing finance. Home loans: -2.8% m/m (expected -0.5%)
- Morgan Stanley say China is in a strong position, so 'trade tensions will likely stay with us'
- PBOC sets USD/ CNY reference rate for today at 6.7954 (vs. Friday at 6.7912)
- Forex options expiring Monday 13 May 2019 10am New York cut
- Goldman Sachs forecasts for the yuan - lower in near term but unchanged further out on expected trade deal
- Ahead of the onshore yuan set today the offshore has fallen to its lowest since January
- Brexit - ministers in UK Cabinet want more indicative votes in parliament, not talks with Labour (UK Times report)
- US President Trump taunting China further on Twitter … "ripping off America!"
- South Korea's vice fin min says will act to stabilise markets (AKA intervention) if volatility increases
- AUD traders - heads up for RBA Deputy Governor Guy Debelle speaking later
- Updated views on AUD and NZD from Westpac
- Trade ideas thread - Monday 13 May 2019
- New Zealand Food prices for April: -0.1% m/m (prior +0.5%)
- China press (People's Daily) says the US obstructs trade talk progress
- US equity overnight (Globex) futures open lower
- Cross party talks to break the Brexit deadlock are "not getting very far"
- US has issued a security alert following reports of Iranian plan to attack US interests
- Trump on Twitter again re China trade war - promises bail out for US farmers
- Today's (China - US trade war related) four-letter word is (warning, NSFW) … 'hope'
- Heads up early warning for a headline coming from China on the trade war Monday
- White House economic adviser Larry Kudlow says both the US and China "will suffer" in trade war
- Early FX price guide - Monday 13 May 2019
- Trump on Twitter - Says trade deal will be far worse for China in his 2nd term
- Houston ship channel closed after ships collide, one sinks
- White House may nominate Judy Shelton to Federal Reserve
- Liu He: China is cautiously optimistic about the future talks
After the break down of negotiations between the US and China on trade late last week US President Trump was on twitter again over the weekend not backing down. On Saturday evening (US time) he tweeted the terms offered to China would be 'far worse' in his second term. He backed this up with a Sunday evening tweet saying he had China right where he wanted them, and further warning China to not wait it out until 2020 later (see bullets above).
The very early moves here in Asia reflected the Saturday tweets, yen moving stronger and risk currencies (AUD for example) trading down. The tweets that followed came when there was a little more liquidity in markets and the moves extended. To keep it all in perspective, though, apart from the yuan, forex ranges were not large. USD/CNH jumped to its highest since January this year.
Equities took more of a hit, overnight Globex trade (ES eminis) were more than 1% down as the opened for the new week. Regional equities also fell.
USD/JPY opened lower from its circa 110.95 level late Friday and fell to 110.60 before coming back to around 109.80. Its just under there as I post. AUD/USD, too, opened lower. It managed a retrace move to around 0.7 before dropping down to lows around 0.6975. Its barely off the canvas as I post. NZD/USD has traded a similar pattern.
EUR/USD is net little changed while cable has recovered all its early dip to be above 1.3010. USD/CAD is up also.
Gold looked promising in early trade, hitting above 1288USD but has since fallen under 1284.
Apart from the trade war developments, we had a few Brexit snippets and data that only had a minor impact.
