Forex news for Asia trading Tuesday 13 October 2015

Federal Reserve:

  • Fed's Brainard dropped a policy bomb today, and an outright challenge to Yellen
  • Recap Fed Brainard comments: "One of the strongest defenses yet of a go-slow approach"
  • More from Fed's Brainard: 'We've been observing lack of demand over last few years'
  • Fed's Brainard: Near-term inflation outlook risks tilted to downside

China

  • China USD denominated trade balance data out now ... still uuuugly
  • More on China explosion, fire
  • China trade balance for September: CNY 376.2bn (expected CNY 292.4bn!)
  • People's Bank of China (PBOC) sets yuan reference rate at 6.3231
  • China press: Chinese stock investors confidence jumped in September
  • China Securities Journal: China may cut nat. gas prices in November
  • China sets October 26-29 for meeting to draft the next 5-year plan
  • PBOC academic warns of falling borrowing demand in real economy

Japan

  • Japan's Suga: Will raise sales tax again unless there is a Lehman like shock
  • Japan PM Abe: Will push ahead with productivity reforms
  • BOJ Minutes: Production, exports have been more or less flat recently

New Zealand, Australia

  • NZ finmin English: Says NZ economy could expand by less than 2% in 2015
  • Australia-NAB Business confidence: 5 (prior 1) & Business conditions: 9 (prior 9)
  • Australia - ANZ Roy Morgan weekly consumer sentiment: 115.6 (prior 110.0)
  • More again, RBA's Lowe: Still have flexibility on interest rates, fiscal policy if needed
  • More from RBA's Lowe: Can clearly see impact of lower AUD on service exports
  • RBA's Lowe: Fall in AUD over last couple of years helping economy adjust
  • New Zealand-Food Price Index for September: -0.5% m/m (prior -0.5%)
  • Mersch: ECB determined to use all available instruments to achieve mandate
  • UK-BRC sales for September: +2.6% y/y (vs. expected +1.5%)
  • Trade ideas thread for Tuesday 13 October 2015

AUD the biggest loser today, NZD not too far behind, while yen did a few victory laps.

The session kicked off with a speech from Federal Reserve Governor Brainard, which created few initial ripples but has at least some analysts saying it was a game changer for the 'when will they hike?' question (see bullets, above).

AUD was a big mover during the session. It was impacted by yen cross selling (buying of yen against other currencies) in the immediate wake of the BOJ Minutes (for September) released in the Japanese morning. The initial market interpretation of the Minutes was one of the central bank still showing patience and not ready to further ease yet. AUD/JPY was sold heavily, and it fed into wider AUD selling. AUD/USD has had a huge up run in the past 9 days and gave some back today.

Economic data from Australia today (NAB Business Conditions and Confidence) showed a good improvement (see bullets, above). The market is not the economy, though, and any bidders who liked the AUD on this data were soon filled in as it fell a little more.

Next up we got Chinese trade balance data for September. Exports came in better than expected, but imports were worse, and registered another big y/y drop. The initial response from the AUD was a marking higher, better exports from China hints at improving global demand, but after the shake out the AUD/USD was hit hard again and it eventually dipped (briefly) under 0.7300 before finding some stability. A bounce has so far proved elusive, though, its just above 0.7310 as I update.

NZD traded in a similar fashion to the AUD, NZD/JPY sellers triggered wider NZD selling and the story for the AUD translates into a similar one for the NZD.

EUR, CHF, GBP all traded lower, though EUR/USD has recovered nearly all its session loss. Cable has not.

USd/JPY ground higher a few points in the early going but, as noted, was sold on the Minutes and has had only a 10-odd point bounce from it session low toward 119.80

Oil has been subdued, flattish on the session. Gold has lost nearly $10.

Regional equities:

  • Shanghai -0.3%
  • Nikkei -1%
  • HK -0.5%
  • ASX -0.55%

Still to come:

  • RBNZ's Wheeler speech- Wednesday New Zealand time