Forex news for Asia trading Wednesday 14 December 2016

  • Japan Final October Industrial Production: 0.0% m/m (preliminary was +0.1%)
  • Goldman Sachs on the FOMC and USD
  • MAS survey - Economists cut 2016, 2017 Singapore growth forecasts
  • Oil markets will swing from surplus to deficit in H1 2017 on supply cut says IEA
  • Japanese government forecasts +1.5% GDP for FY 2017
  • More on this - Superlong JGB yields fall after BOJ increases buying operation
  • BlackRock's Global Investment Outlook for 2017 ... "We expect US-led reflation"
  • China NDRC says will target 2tln yuan investment in tourism industry by 2020
  • BlackRock's Miller expects the AUD to trade around 0.70 to 0.75 range in 2017
  • Thailand to suspend gold mining on environment and health concerns
  • PBOC sets USD/CNY mid-point today at 6.9028 (vs. yesterday at 6.8934)
  • Reuters report BOJ increases purchases of superlong JGBs in Wednesday's operations
  • "Democracy sausage" has been named Australia's 2016 word of the year
  • Australia - WPAC on why to be more confident about the economic outlook for 2017
  • Australian Treasurer Morrison: Vital we reduce borrowing for day-to-day spending
  • Australia - new motor vehicle sales (Nov.): -0.6% m/m (prior -2.4%)
  • Morgan Stanley say Trump US infrastructure plan may boost steel demand by 20%
  • BOJ Q4 Tankan: Large Manufacturing Index: 10 (expected 10) + more
  • Australia - Westpac Consumer Confidence (Dec.): -3.9% m/m (prior -1.1%)
  • UBS on gold - support at $1150 currently looks vulnerable (& what to watch from the FOMC)
  • WPAC's High Conviction FX Trades: NZD/USD & USD/CHF upside the focus
  • Jeff Gundlach says expect stocks to fall around inauguration day
  • Trade ideas thread - Wednesday 14 December 2016
  • OIL - price drops after private inventory data

A year ago (give or take a few days) the Federal Reserve began its rate hike cycle. The (nearly unanimous) expectation is we get another rate hike from them today (it's a very slow cycle). Asian forex markets thus adopted very much a wait and see approach, with sideways movement pretty much the order of the day.

We didn't get much in the way of fresh news, but there were a few data points to heed.

Australian consumer sentiment for November (the monthly measure from Westpac) came in at a big tumble, down 3.9% m/m and to its lowest since April. More detail:

  • Australia - Westpac Consumer Confidence (Dec.): -3.9% m/m (prior -1.1%)
  • Australia - WPAC on why to be more confident about the economic outlook for 2017

AUD did little on the data.

The Bank of Japan Tankan for Q4 was next, with a good result for Japan Inc. (i.e. the big manufacturers; the diffusion index for this lot was up for the first time in a year and a half and at its highest since this time last year). Apart from this, though, the survey was patchy and lacklustre - with mainly misses for other measures. This included big firms cutting their expectations for capital expenditure this fiscal year (ends in March 2017); estimates of +6.3% in the prior survey down to +5.5% in today's.

The Bank of Japan were active in JGBs today, looking to (& succeeding in) pushing down long-bond yields:

  • Reuters report BOJ increases purchases of superlong JGBs in Wednesday's operations
  • More on this - Superlong JGB yields fall after BOJ increases buying operation

USD/JPY tracked along in a 30-odd point range today and is net little changed on the session.

EUR and CHF both gained a few points against the big dollar. Cable dribbled a few points lower. None of these movements were much at all.

AUD was a few points to the worse, while NZD buyers saw NZ/US and NZD/AUD a little higher on the session.

Gold ticked a dollar or two to the better, oil dropped a little upon the release of the API stock survey for the week (an unexpected build) and hasn't managed much of a recovery

Regional equities:

  • Nikkei +0.10%
  • Shanghai +0.06%
  • HK +0.60%
  • ASX +0.64%