Forex news for Asia trading Friday 17 April 2020
Late NY/very early Asia markets were set on fire by a report that the coronavirus-fighting drug remdesivir was showing encouraging signs:
Not only did stock in the company, Gilead, rise but so did broader equity indexes trading at the time along with forex 'risk'. I described at the time the 'ballistic' raise in risk barometer AUD/JPY (this chart posted earlier in the session):
There were plenty of doubts about the report, not a scientific study, too many caveats, and more. But, those with experience of the Asia morning know such concerns
DO
NOT
MATTER:
Sure the caveats are all important, and relevant, and cogent, but for traders, the moves were there and not be sneezed at (no pun intended).
Alongside the COVID-19 news we got some news for oil - Saudi and Russia said they'd do more. Oil did not see the gains other markets did but posted a small rise.
After all this we had US President Trump providing a bit of a summary of the 'phased' reopening of the US economy. This will be up to each individual state governor but Trump's overview was useful.
Next up was the wait for the China data dump - Q1 GDP and March activity data. GDP was horrendous, a drop of 6.8% against already low expectations. The March activity data was more interesting, not only because it provides a more recent picture of the economy but also because it showed a stark divergence between industrial production data and retail sales. Long story short here is that supply disruptions do not appear as bad as were initially thought they'd be but demand disruption is deep. This is a recipe for deflation, that will be exported to the globe. The other thing to keep in mind is that China is 6-8 weeks ahead of the rest of us in its virus impacts, the data we got from China today will be repeated all over in the months ahead.
Across forex, AUD, NZD, EUR, GBP, CAD were moved higher against the USD on the coronavirus drug news while USD/JPY moved higher alongside. USD/JPY has since subsided to retrace most of its gain while retracements elsewhere have not been so deep.
Also, check out the Singapore data for a surprise positive result.
Headlines:
- China's Wuhan has revised its coronavirus death toil higher by +1290
- China NBS says March unemployment rate was 5.9% (6.2% in Feb) - here's why
- China stats bureau says employment stable despite COVID-19 impact
- China March data: Retail sales big miss already low expectations
- Q1 GDP from China: -6.8% y/y (expected -6.0%)
- Coronavirus - NZ proposal for bluetooth-enabled credit card-sized contact tracing tool
- More on that surprising jump for Singapore exports in March
- PBOC sets USD/ CNY reference rate for today at 7.0718 (vs. yesterday at 7.0714)
- FX option expiries for Friday April 17 at the 10am NY cut
- Fed's Kashkari says staged approach to reopening the US economy makes sense
- Singapore data - March exports (NODX) +17.6% y/y (-8% expected)
- Here's another share price surging on coronavirus news (old news)
- Switzerland's three-stage easing of restrictions imposed to suppress theCOVID19 pandemic
- US economy reopening planned (ps. its begun already)
- Just waking up (part 2)? Update on oil
- Trump says he expects US coronavirus deaths to be fewer than the 'optimistic' projections
- Coronavirus death toll by country - falling, plateauing
- BoC's Wilkins says Bank to buy 1-5 year corporate Bonds (as part of QE)
- BoC's Poloz - Bank would have cut interest rates anyway due to oil shock
- Boeing says it will resume commercial aircraft production in Puget Sound
- More on that Russia, Saudi discussion on prepared to take further measures
- Trade ideas thread - Friday 17 April 2020
- Oil - Saudi Arabia, Russia phone call, issue joint statement - ready to take “further measures”
- BOC Gov Poloz reaffirms substantial monetary stimulus is needed
