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- China intensified efforts on Monday to stabilize the weakening yuan
- China December USD denominated Exports +10.7% y/y (expected +7.3%) Imports +1.0% (-1.5%)
- HKMA and PBoC to set up a CNY 100bn liquidity facility for trade finance
- Some Chinese trade data is dribbling out. 2024 total imports +2.3% y/y
- Singapore bans Polymarket
- More on China’s Central Bank, Forex Regulators Pledge to Stabilize Yuan
- Yen finding a bid on the Japanese market holiday
- PBoC Gov Pan says interest rate and RRR tools will be utilized to maintain ample liquidity
- Weekend - China's Ministry of Commerce promised to enhance domestic consumption
- China Foreign Exchange Committee (CFXC) held meeting - pledged to support yuan
- PBOC sets USD/ CNY reference rate for today at 7.1885 (vs. estimate at 7.3442)
- PBoC and SAFE move to allow Chinese firms greater access to foreign capital
- US economy "reaccelerating", there's a near coin toss chance of a Fed rate hike this year
- Australian December inflation gauge 0.6% m/m (prior 0.2%) & 2.6% y/y (prior 2.9%)
- UBS expects further Federal Reserve rate cuts, but at a slower pace
- ICYMI - Bank of America see no Fed interest rate cuts in 2025, risk skewed towards a hike
- Optimism for higher gold prices in 2025, but what are the risks?
- US and UK tighten sanctions on Russian oil industry
- Canada PM Trudeau says has counter-tariffs ready If Trump launches a trade war
- Goldman Sachs now expect two Federal Reserve interest rate cuts in 2025, down from three
- ICYMI - Morgan Stanley expect the Fed to cut rates in March
- New Zealand November building approvals +5.3% m/m, huge jump from -5.2% the prior month
- Trade ideas thread - Monday, 13 January, insightful charts, technical analysis, ideas
- Monday morning open levels - indicative forex prices -
Weekend:
- Weekly Market Outlook (13-17 January)
- Newsquawk Week Ahead: US CPI & Retail Sales, China Activity Data, UK CPI, Aussie jobs
- How the Federal Reserve might be reshaped in Trump's term
- Forexlive Americas FX news wrap 10 Jan: Strong US jobs sends the USD & yields higher.
The reverberations of the blockbuster US December jobs report continued in Asia today:
- US treasury yields remained firmly near recent 14-month highs
- the USD flexed, sending EUR and GBP sliding lower
- US equity index futures slipped lower in Sunday evening (US time) Globex trading
- Regional equities here in Asia weakened
Oil moved higher, the Friday news of the US and UK tightening sanctions on Russian oil continuing to impact.
It was a holiday in Japan today, which thinned out liquidity somewhat. Despite the holiday the yen carved its own path, initially losing some ground against the USD (session highs were above 157.90 briefly) before the yen strengthened, taking USD/JPY back under 157.50. Yen crosses were pounded, GBP/JPY and EUR/JPY notable losers.
We had a barrage of announcements from China today, supportive of the yuan (or intended to be), see the posts above for the details but, in brief:
- the PBoC and SAFE increased the macro-prudential adjustment parameter from 1.5 to 1.75, allowing companies to borrow more from abroad
- the China Foreign Exchange Committee pledged to keep the yuan exchange rate stable at reasonable levels, combat pro-cyclical market behaviors, and prevent excessive exchange rate volatility
- PBOC Governor Pan Gongsheng reiterated that China has the capability to maintain the stable operation of its foreign exchange market.
The yuan was reasonably steady against the USD in response, not dropping like EUR and GBP.
