Forex news for Asia trading Wednesday 4 March 2020
- South Korea's vice fin min says will take stern action if needed to stabilise markets
- AP and Fox both project Sanders to win California Democratic Primary
- RBA Dep Gov Debelle to appear in parliament … at 9pm!
- Fitch says G7 nations have little room to respond to virus
- Super Tuesday Democratic Primaries updated delegate counts - its closer than it looks
- US primaries contest Super Tuesday - is voter turnout the real story?
- US politics - Biden ahead in 9 states, Sanders ahead in 3, but one of those is a biggie, Texas
- Oil - Goldman Sachs lowers oil price forecast - Brent forecast down $10 in Q2
- US death toll from Tennessee tornadoes 25 or more
- China Caixin/Markit PMIs Services PMI collapses to 26.5 (prior 51.8)
- Mainland China new coronavirus cases 119, added deaths 38
- Fed's Evans: Doesn't expect a large coronavirus impact to US GDP at this point
- New Zealand PM Ardern says virus outbreak impact significant but not necessarily long-term
- Bank of Japan Governor Kuroda to appear in parliament from 0520GMT
- Australian Treasurer Frydenberg says working on targeted fiscal measures
- PBOC sets USD/ CNY reference rate for today at 6.9514
- FX option expiries for Wednesday March 04 at the 10am NY cut
- Biden firming in the US Dem primaries - US equity index futures also firming in Globex trade
- South Korea 11.7bn won extra budget to address virus outbreak impact
- More from Fed's Evans: possibility of again hitting zero rates
- Hong Kong February PMI hits a record low of 33.1(was 46.8 in Jan)
- Japan - Jibun Bank/Markit final PMIs Feb: Services 46.8 (prior 51.0) & Composite 47.0 (prior 50.1)
- Australia Q4 GDP: 0.5% q/q (expected 0.4%)
- NZ data - ANZ's Commodity Price index for February: -2.1% m/m (prior -0.9%)
- Fed Evans says he thought the rate cut would help boost confidence
- Singapore trade minister says it'll take more than a Fed rate cut to restore confidence
- HK 'central bank' cuts its base rate by 50bps
- China Securities Journal: PBOC may cut OMO rates this month
- BNZ forecasts an RBNZ rate cut at the March meeting, 25bp
- US VP Pence says should be 1.5m coronavirus tests available by end of week
- Coronavirus outbreak - World Bank initial package of up to $12bn in immediate support
- South Korean central bank to hold a meeting Wednesday morning - discussion of Fed rate cut
- RBNZ Gov Orr to speak on how Bank would assess & use unconventional monetary policy tools if ever needed
- Australia CBA/Markit Feb. PMIs: Services 49.0 (prior 50.6) & Composite 49.0 (50.2)
- KiwiBank says "RBNZ will be forced to keep pace" with RBA and Fed rate cuts - forecast a 50bp cut
- Trade ideas thread - Wednesday 4 March 2020
- New Zealand Building Permits for January -2.0% m/m (prior 9.9%)
- Australia construction PMI for February 42.7 (prior 41.3)
- UK Chancellor ready to end freeze on fuel duty in Budget
USD/JPY had a move under 106.90 during the session here before climbing back above 107.40. Of the majors yen was the best mover but the Chinese yuan was a bigger winner, gaining fuirhter strength the take USD/CNH below 6.93 at one stage.
News flow was light (except for politics) although there were some notbale data releases. The Caixin/Markit Services PMI is not usually much of a focus, coming at the tail end of the China PMI releases each month but wow, what a number today. It halved to 26.5 in February, its lowest ever.
Australian Q4 GDP beat its consensus estimate (0.5% q/q vs. 0.4% expected and prior).
Apart from politics (coiming to that soon) it was difficult to disentangle the muddled news flow from market movement.
What was clearer though was the impact of Joe Biden's strong eprformance on overnight trade in US equity futures (Globex). These gained as news filteredc through of Biden gaterhing the most delegates. Counting continues and its not over yet, but so far so good for Biden. The prevailing narrative in the market is that Biden is more electable than Sanders and is a positive for the market. There are arguments to be made the other way around though, but for today the popular one was the driver.
Chinese stocks faced down the dire PMI data, the Shanghai Composite is up on the day so far.
Coronavirus news took a bit of a back seat. In summary, while cases increase in China continue to slow down Iran, South Korea, and Italy are a concern. Still awaiting trustworthy data from the US. US VP Pence held a presser in the US afternoon/evening at which media audio and video recordings were not permitted. Hardly confidence inspiring and giving those accusing China of a cover up something else to mull.
CAD added on points against the USD, liking a slightly firmer bid for oil. EUR, GBP, CHF all a few pips down against the dollar, not much in these really. Gold sideways circa 1640/45 or so.
