Forex news for Asia trading Monday 2 March 2020
A LOT of headlines today, I have bolded the ones you probably do not want to mis:
- Officials say Brexit trade talks could break down within just weeks
- El Erian: The good, the bad and the ugly of the coronavirus response
- North Korea has fired an unidentified (as yet) projectile
- Two White House coronavirus meetings scheduled for Monday
- Westpac expect an RBNZ 25bp rate cut in March
- Australian data out earlier today - inventories will add to Q4 2019 GDP
- Coronavirus - NZ PM Ardern says will extend the inbound travel ban by a further 7 days
- China Beige Book indicators say revenue, profits, orders and production are all in "free fall"
- Ex RBA monetary policy board members says no RBA interest rate cut on March 3
- South Korea total coronavirus cases rise to 4,212, death toll to 22
- China - Caixin/Markit Manufacturing PMI for February 40.3 (vs. prior 51.1)
- National Australia Bank forecast an RBA rate cut for tomorrow
- PBOC sets USD/ CNY reference rate for today at 6.9811 (vs. Friday at 7.0066)
- FX option expiries for Monday March 02 at the 10am NY cut
- Stats NZ says NZ exports to China fell 8% y/y in the 4 weeks to Feb 23
- BOJ Kuroda statement - seeing unstable moves in financial markets
- South Korea Feb new export orders contract at fastest pace in over 6 years
- Australia data - ANZ job advertisements for February +0.7% m/m (prior +4.0%)
- Australian Q4 inventories +0.3% q/q (vs. -0.1% expected)
- Japan - Jibun Bank/Markit Manufacturing PMI (final) for February: 47.8 (prior 48.8)
- Westpac's fair value model mid-point for the AUD dropped 3.4% in a week
- Mainland China reports 42 new coronavirus deaths (all in Hubei)
- Coronavirus - Japan's PM Abe says is getting a law ready to enable declaration of state of emergency
- Westpac forecast an RBA interest rate cut tomorrow (Tuesday March 3 2020)
- Australia - Melbourne Institute monthly inflation for February: -0.1% m/m (prior 0.3%)
- Japan Capex for Q4 2019: -3.5% vs. -2.5% expected
- Australia's McCrann says RBA interest rate cut on Tuesday almost certain
- Coronavirus: RBA, other financial authorities in Australia to hold emergency meeting today
- Weekend reports that the BOJ may announce measures to stabilise financial markets ahead of the Tokyo open
- Global central bank co-ordinated interest rate cut coming on Wednesday 4 March
- Goldman Sachs forecasts an RBA interest rate cut tomorrow, and another to follow
- Trade ideas thread - Monday 2 March 2020
- An RBA 25bp interest rate cut tomorrow is now fully priced in
- More on the rocket attacks inside the green zone Baghdad - near the US embassy
- Australia's second manufacturing PMI for February goes up!
- JP Morgan forecast an RBNZ interest rate cut in March then another in May
- UK press front page: PM Johnson says virus will get worse before it gets better
- New Zealand terms of trade data for Q4: +2.6% (expected 0.8%)
- Australian 3 year bond yield falls to it lowest on record
- Coronavirus has probably been spreading undetected for about six weeks in Washington state
- JP Morgan forecast an RBA rate cut on Tuesday (3 March)
- Two blasts heard in Iraq capital Baghdad - rumours its missiles hitting near US embassy green zone
- Australia - Manufacturing PMI for February 44.3 (prior 45.4)
- Goldman Sachs again, looking for a 50bp interest rate cut in March, and a full 1% cut by June
- Qatar MotoGP Grand Prix race cancelled due to coronavirus
- ANZ expect the RBNZ to cut its cash rate this month, forecast a 50bp interest rate cut
- Coronavirus cases jump over the weekend
- Monday morning opening levels - indicative forex prices 02 March 2020
- Man in his 50s is first US coronavirus death as Seattle grapples with potential outbreak
- Trump says he's weighing Mexican border restrictions over virus
- A huge week ahead in the making
- China official PMIs February: Manufacturing 35.7 (expected 45.0) Non-manufacturing 29.6 (expected 51.0)
Saturday brought official PMI data from China and it was horrible:
Infections from the coronavirus increased over the weekend also, gaining ground in the US and Europe.
'Risk' opened lower in very early Asia Monday trade, AUD, NZD both down while the yen gained. USD/JPY traded down towards 107.00.
As the morning progressed we got other news, notably rocket attacks into the Green Zone in Baghdad (where the US embassy is located) - thankfully without reported casualties.
We also had a series of forecasts issued for rate cuts from the Fed, the RBA and RBNZ. Also chatter of co-ordinated global central bank rate cuts (an opinion piece, see bullets above, that caught the attention of the markets).
As futures markets opened in the subsequent hours the risk aversion was expressed in lower oil, lower equity indexes, higher fixed interest prices and slightly higher gold.
These moves all began to reverse and retrace though. Maybe it was all the talk of expected central bank action, maybe it was the statement issued by Bank of Japan Governor Kuroda (see bullets above) combined with BOJ action to ease fears a little but 'risk' currencies led the way retracing soon to be followed by reversal of those futures markets moves mentioned above.
Data from Asia (February PMI day) was weak, the private survey China manufacturing PMI (Caixin/Markit) came in at its weakest ever.
AUD/USD and NZD/USD have both had net gains for the session, as has USD/JPY, reversing and more their early weakness. EUR/USD has not been where the action was, cable is up a little (its softened a touch as I post, on that Brexit trade talk headline above).
CAD has gained against the dollar, CAD may be getting a little boost from the recovery in oil prices. Gold is a few dollars higher on the session, not much in it.
Chinese stocks have surged today, despite the awful PMIs. Its a green sea for HK, Japan, China equities.
Shanghai Composite:
