Forex and Bitcoin news for Asia trading Friday 20 July 2018
- Reports of intervention in the yuan
- Some NZ data: June credit card spending jumps m/m and y/y
- Japan inflation data earlier today - recap
- Checking in on the yuan against its basket. It is … (have a guess), yep lower ;-)
- ANZ says China to take action to support economic growth in H2 2018
- PBOC sets USD/ CNY reference rate for today at 6.7671 (vs. yesterday at 6.7066)
- PBOC official says leverage has stabilised, debt increase now slowed
- Japan inflation data: National headline CPI 0.7% y/y (vs. expected 0.8%)
- The FT reports its not just Brexit slashing banking jobs in London
- German Finance Ministry sees threats to eco growth from protectionism, Brexit
- How Trump's attack on Fed independence could backfire and see higher US rates
- Morgan Stanley says market is too bearish on the EUR
- Trade ideas thread - Friday 20 July 2018
Its true, I used yesterday's headline over again! And why not ... the People's Bank of China slashed the value of the onshore yuan yet again today, firing another shot in the trade war (devaluing the yuan is like a tariff on everything imported!):
- The reference rate was set at at it lowest (for the CNY against the big dollar) since mid-July last year
- The devaluation was the biggest one day cut to the CNY since June of 2016
Just like yesterday, traders took a big stick to the offshore yuan, CNH slumping; USD/CNH traded above 6.83 at one stage before settling a little:
Markets responded by quickly cutting risk, overnight US stock index futures (and equity indexes generally) got a hit as did 'risk' currencies; everyone's favourite AUD/JPY copped it too.
There was a recovery for the yuan, though, above 6.83 did not last long. Chinese state owned banks reported sellers of USD, an intervention to support the yuan. While the PBOC wants a lower currency, they don't want it too fast.
Elsewhere .... yes, there were other things going on …
Japanese inflation data the other item of interest in Asia today. The headline and core (excluding fresh food but not energy) both came in not too badly for the BOJ. Both well short of target, but, yeah not too bad.
However .... and its a big however ... taking energy out and the inflation result is woeful if you are at the Bank of Japan. ICYMI the target for core (excluding food and energy) is sustainably around 2% y/y. If you take 2% and divide it by 10 you'll get 0.2%, and that was the result announced today. Kuroda will not be happy.
Currency movement ... 'risk' fell in response to the CNY 'fix' and that's about it in a nutshell. As I update AUD, NZD, EUR, GBP, CAD, CHF have all come back to barely net changed on the session against the big USD. Even USD/JPY is off just a few tics.
Yuan is where the action was, and remains.
Have a great weekend!
Still to come:
