Forex news for Asia trading on Monday 22 November 2021
Oil news - Japan reserves (read from the bottom up for chronology):
- More Japanese media speculation on an oil reserve release
- Japanese media (Yomiuri) with more on US-Japan oil reserve release speculation
- Japan chief cabinet secretary Matsuno says no plan fixed yet for release from oil reserve
- Oil futures have opened (lower) to begin the week
- Japanese Prime Minister Kishida confirms his government is considering an oil reserve release
Yuan news:
- PBOC sets USD/ CNY reference rate for today at 6.3952 (vs. estimate at 6.3880)
- China - PBOC-backed Forex Committee instructs bank traders to limit yuan speculation
Other:
- Goldman Sachs have lowered their forecasts for EUR/USD
- Taiwan and the US are to meet to discuss economic ties
- US President Biden to speak on the economy and inflation on Tuesday
- China President Xi says China and ASEAN have got rid of shadow of cold war
- European Central Bank speakers coming up on Monday 22 November 2021
- PBOC 1 and 5 year Loan Prime Rates left unchanged at 3.85% and 4.65% respectively
- Fitch says pandemic-induced scarring in developed markets is less severe than previously thought
- Moody's says Chinese offshore short-term bonds face higher refinancing risk than onshore bonds
- Australia to open up to (fully vaccinated visitors from) Japan and South Korea
- Bitcoin weekend update: Tested towards US$60K, currently circa $58.3K
- Barclays says the USD is overvalued circa 5 to 10%, but there are still supportive factors. Sees EUR/USD higher.
- RBNZ Shadow Board is overwhelmingly calling for a tightening in monetary policy
- Coming up this week - the RBNZ will hike its cash rate
- Weekend - Bank of England Governor Andrew Bailey says there is a “two-sided” debate over inflation
- Wall Street Journal says global supply-chain woes are beginning to recede, still danger
- Trade ideas thread - Monday 22 November 2021
- PBoC adviser says China’s economy could enter a period of “quasi-stagflation”
- Russian troop build-up near Ukraine - invasion possible in early 2022
- Monday morning open levels - indicative forex prices - 22 November 2021
- Central bank watch: RBNZ to hike by 50bps?
- Central bank watch: Will the Fed stay flexible?
While the forex space was fairly sedate to open the week crypto was more active.
BTC/USD traded up to US$60K over the weekend but has since given back some ground to lows approaching $57K (not quite getting that low). El Salvador's President spoke on the weekend, announcing that his government will build an ocean-side "Bitcoin City" at the base of a volcano and launch a Bitcoin bond offering to construction.
From China today we had the monthly prime rate settings, both the one- and five-year remained at unchanged rates for the 19th month in a row. At the yuan reference setting the PBOC set a weaker (yuan) rate than expected. Over the weekend there had been some news indicating the Bank was seeking to take some of the strength from the currency, or at least slow its gains (see bullets above). The reference rate was only very slightly weaker than expected and it barely dented the strength of the onshore (CNY).
Across other majors it was, as already referred to, a quiet beginning to the week. USD/JPY inched higher, continuing to cover its sharp downside move on Friday's Europe time (the drop from 114.50 to 113.60-odd in an hour and a half). USD/CHF is up a few ticks alongside. Cable is a few points lower, as is EUR/USD (in comparison to late Friday levels).
