Forex news for Asia trading Thursday 14 January 2016

China:

  • Overnight Yuan HIBOR drops to a one-week low
  • China stockmarket pre-open indications - Shanghai Comp to open down 2.6%
  • China to amp up monitoring of stock selling activity
  • People's Bank of China (PBOC) sets yuan reference rate at 6.5616
  • China Securities Journal: Little possibility yuan will depreciate further - more
  • China tightens money exchange control to stem outflow: Ming Pao
  • China Securities Journal: Yuan is unlikely to keep falling sharply
  • Reuters: around 10-14 attackers in Jakarta
  • Australia - Police operation at Sydney Opera House has concluded
  • More on Jakarta explosion - bomb reported, gunfire
  • Police operation underway in Sydney (CBD and Manly), also Jakarta explosion
  • Japan's NHK reports earthquake hits Hokkaido
  • Comment's from BOJ Governor Kuroda: Japan price trend improving
  • Bank of Korea Governor Lee: Excessive volatility of yuan expected to ease
  • Japan chief cabinet secretary Suga: Global recovery is gradually recovering
  • Australian employment data beats for the 3rd consecutive month - analyst responses
  • Fitch say house price growth to slow significantly in Australia and New Zealand
  • Barclays gold price target (oil too)
  • Bank of Korea leaves rates on hold at 1.5%
  • Australia Dec. Employment Change: -1.0K (-10K expected)
  • Japan data: Machine orders -14.4% m/m (expected -7.3%) ... the biggest fall in 18 months
  • US oil shale in rapid retreat - production expected to fall by >1m barrels a day
  • NZD/USD running stops under 0.6500
  • Nikkei reports Japan may use FX reserves to cover reducing tax rate
  • More NZ data - Card sales for December (retail): -0.2% m/m (expected +0.5%)
  • Canada fin min Morneau: Opportunities for lower CAD, not in our control
  • Trade ideas thread for Thursday 14 January 2016
  • NZ data - ANZ Truckometer for December: +2.6% m/m (prior was +0.4%)

We didn't have to wait for China today for market volatility, with Japanese stocks (Nikkei225) down 3% or so prior to the Chinese markets opening. USD/JPY had slipped further also, taking out 117.40 before some consolidation.

AUD and NZD both dropped away also, with the Australian employment report (showing the 3rd beat on jobs added in a row) finally giving the AUD some support (but not a lot).

The PBOC set the yuan mid-point reference rate a little stronger for the yuan today, continuing the run of stable settings for a 5th consecutive day. Notably, the CNH weakened in trading again today despite this.

In addition to the yuan fix, the PBOC also flooded the money market with liquidity, the biggest single-day injection of funds (160bn yuan today) since February of 2015. The China 10-year bond yield fell to 2.7% for its lowest since 2007.

Chatter now is of the likelihood of more PBOC easing ahead of the February 8 New Year.

Much of the action in currency majors had finished by the time Chinese markets opened, with only limited movement after this.

EUR and CHF had a session the strong side, they are both near session highs against the USD as I update. Cable, on the other hand more or less wallowed near its late US low.

As I update the AUD and NZD are both near session lows also, as is USD/JPY.

Its worth noting the comments from Bank of Japan (BOJ) Governor Kuroda today, and the form of word's he chose to use, saying he will 'do what it takes' to hit the 2% inflation level in an overt echoing of ECB head Draghi's famous uttering.

The Indian rupee fell to its lowest since sent 2013 today. This was despite the Reserve Bank of India intervening to sell USD and buy the rupee .

Explosions in the Indonesian capital of Jakarta sent the rupiah and the Indonesian stock market lower. As I update the worse news is at least 4 dead and multiple injuries in the attacks.

Gold is on session high as I write, oil is more or less sideways.

Regional equities with Shanghai closed for the lunch break:

  • Nikkei -4.03%
  • Shanghai -0.93%
  • HK -1.63%
  • ASX -1.61%

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