Forex news for Asia trading Monday 16 September 2019
Oil was the focus today with the attack on a Saudi Arabian production facility over the weekend. When I say "a Saudi Arabian production facility" I should add:
- The attack was on the world's biggest petroleum-processing facility
- The damage done has removed over half of the country's production
- And has removed more than 5% of world output
- It has also cut almost all spare capacity which was previously available at the plant
- And has cut global spare capacity by about two thirds
So, yeah, this is significant. The move in oil prices was huge, the biggest jump ever. In terms of price level though, the highs seen were last seen in late July, which outs the move into perspective. What to watch going forward is how quickly facilities can be repaired and brought back online. For events as they unfolded:
- Drone attacks cut as much as 5mbpd of Saudi oil production
- It could be 'weeks' before Saudi oil production returns to full capacity
- Goldman Sachs oil price forecasts after the Saudi attack
- Platts on the oil price impact of the Saudi attack
- CAD, yen both higher in thin Monday opening forex markets
- Images released of the extensive damage to Saudi production facilities
- Can Saudi Arabia restore almost half the oil production within just days?
- UBS on oil after the attack on Saudi production facilities
- Is a US SPR oil release imminent? No, say analysts
- Here we go - Trump says will authorise SPR oil release if needed
- Oil prices surge as futures trade commences for the week, Stock index futures open lower.
- More on those Goldman Sachs oil price forecasts after the Saudi attack
- Oil - Citi says one key takeaway from the Saudi attacks
- Trump says locked and loaded for response to attack on Saudi oil
- Weekend attack on Saudi oil production - oil price higher. Where we at.
- Here are the currency winners (& losers) from the attack on Saudi oil production
- US media says Iran launched nearly a dozen cruise missiles and over 20 drones in attack on Saudi
Currency impact.
As you'd expect NOK and CAD both saw gains, both countries are net oil exporters. Yen and CHF gained on the reading that the attacks are a ratcheting higher of geopolitical tension. Indeed, US President Trump has promised the US is 'locked and loaded' to proceed with a response. Iran is the suspect, although at this stage Trump has not tweeted beyond 'there is reason to believe we know the culprit'.
USD/JPY gapped lower in opening trade and retraced some of the gap before dropping back toward early lows. USD/CHF, too, moved lower on the session with a weaker attempt at a retrace.
Cable and euro were not where a lot of the action was but both have had moves during the session here. Cable is a touch weaker net for the session.
AUD/USD and NZD/USD were both softer early. AUD managed a complete retrace before losing some of it again to be net lower for the day. Kiwi though has outperformed to be net higher. Australia looks like it might become further entangled in a dispute with China re a cyber attack (see bullets below).
Gold surged, it managed above USD 1,510 at one stage before coming up a few dollars.
On the data front, the items of significance were from China, with missed results for August data across investment, retail sales and industrial production.
Japanese markets were closed for a holiday today.
Elsewhere:
- Buy the dip - Hong Kong real estate edition
- More comments from China State Bureau on the activity data misses
- AUD down a few points after the disappointing misses for China activity data
- China Industrial Production in August 4.4% y/y (expected +5.2%)
- China Retail sales for August: 7.5% y/y (expected +7.9%)
- China Fixed asset investment (excl rural) for August 5.5% y/y (expected 5.7%)
- ICYMI: US President Trump almost certain to announce tariffs on European products soon
- Blackstone is to buy Dream Global Units for 6.2bn CAD
- PBOC sets USD/ CNY reference rate for today at 7.0657
- FX option expiry data for Monday September 16 at the 10am NY cut
- North Korean leader Kim Jong Un invited US President Donald Trump to visit Pyongyang
- More on the story Australian parliament said to be hacked by China (& what it means for AUD)
- Forecasts for the NZD lowered
- China's Premier Li says maintaining economic growth of 6% or more is very difficult
- Australia - China firm $1.5 bn takeover scheme for Australian firm
- Brexit - BCC cuts 2019 UK GDP forecast o +1.2% from +1.3%, 2020 lowered also
- Australian intelligence says China responsible for cyber-attack on national parliament
- NZ services PMI for August: 54.6 (prior 54.7)
- Trade ideas thread - Monday 16 September 2019
- Brexit - UK PM Johnson says he thinks he can get a deal with the EU within weeks
- Monday morning open levels - indicative forex prices 16 September 2019
- Video: A look at implied volatility in the week ahead and euro crosses
- Seven times and places to book your profits
