Forex news for Asia trading Friday 26 May 2017

  • More Bullard: Looking fwd to beginning b/s reduction in H2
  • Oil - large volumes of crude to draw from US storage in coming weeks
  • Fed's Bullard with advice for the BOJ - communicate taper clearly
  • More on Fed's Bullard. Yes, he really did compare the US with Japan ...
  • More on Fed's Williams - sees limited bump from Trump fiscal policies
  • Fresh leg higher for USD (includes Bullard headlines)
  • "China's multi-faceted indebtedness, a growing worry for investors"
  • PBOC 'is effectively anchoring the yuan to the dollar'
  • Moody's official comments on China - no hard landing
  • New FX code of conduct to deal with privileged information, collusion
  • PBOC sets USD/CNY central rate at 6.8698 (vs. yesterday at 6.8695)
  • Little USD pop ... GBP, AUD, EUR, CHF lower
  • AUD/USD traders - a quick heads up to the freak outs coming over the next 2 weeks
  • Fed's Williams: 3 hikes appropriate in 2017 still his view
  • Japan PPI (Services) for April: 0.7% y/y (expected 0.9%, prior 0.8%)
  • Japan CPI (April): 0.4% y/y (vs. expected 0.4%)
  • UK - YouGov/CEBR consumer confidence, weakest since weeks after Brexit vote
  • US politics: NBC reports Jared Kushner under FBI scrutiny in Russia investigation
  • ANZ on the ECB - committed to full implementation of its QE program, but ...
  • BoC Dep Gov Sylvain Leduc speech - text (its on payment systems)
  • EU is to offer post-Brexit rights to Britons living in Europe
  • UK election poll (polls are still a thing?): Cons 43, Labs 38
  • BlackRock on Australia, "in effect it's been denying gravity"
  • Trade ideas thread - Friday 26 May 2017
  • The strongest and the weakest currencies at the end of the trading day
  • Its inflation day in Japan (ummm, no, not a holiday, the data for CPI)
  • S&P and Nasdaq sets another record (what's new?).
  • Economic data due from Asia today - Japanese inflation data (+Fed & BoC)
  • ICYMI: ForexLive Americas FX news wrap: Oil rolls over after OPEC extends deal

On the news and data front we had Japanese inflation data, two Federal Reserve speakers, UK election polling. And yet ... none of it amounted to much.

A recent poll on the UK election put Labour within (behind) 5 points of the Conservatives, the gap is narrowing as we approach June 8. Is a Conservative loss conceivable? I don't think so but if we've learnt one thing on elections its not to have a closed mind (does not apply to cheering for your team, of course) . GBP was on the soft side for most of the session, the polling was cited (in the search for narrative :-D Maybe it did impact, but it took a looooong time to do so.) but a stronger USD was also a factor.

A stronger USD? Well, yes, for a lot of the session. EUR/USD fell, but has since recovered somewhat, USD/CHF popped, and CHF has since recovered somewhat. Cable has also bounced back a little, but as I update its under 1.29 and looking a wee bit heavy.

Put AUD into the 'weak' basket today, AUD/USD dropped with the USD strength and has not recovered much at all. It is barely off its session low as I update. I expect the weakness will continue for the next couple of weeks (AUD/USD traders - a quick heads up to the freak outs coming over the next 2 weeks). NZD is also on its session low against the USD, but is down only small on the day. USD/CAD is up a little too.

And so to Japan. It was Inflation Day (no, not a holiday ... but hey, why not?) Headline inflation was in line with consensus expectation, and 'core' inflation hit its best since April of 2015. But the one to watch, Japanese 'core-core' inflation (see here for a quick explainer if you need) registered a big fat egg ... zero % y/y ... again. If the BOj is targeting 2%, as they say they are, and will keep accommodative policy until its stable there, which they say they will ... then the data was yen bearish.

But ... nope, the yen found some strength today. USD/JPY is off 25-odd points, and yen crosses are down.

Gold gained a few dollars on the day (BTC was volatile but is net not much changed on the Asian session).

The "fall" out from the OPEC/non-OPEC agreement continued for oil, its down further on the session, taking a look below its overnight low.

Sell

the

fact

Right?

China was (relatively) calm today. The USD/CNY reference rate was set at a barely changed level from yesterday's mid-point. The PBOC injected a net 20bn yuan into money markets (nevertheless, yuan borrowing rates rose; overnight HIBOR to its highest since January ... so no let up from the PBOC tightening efforts). Iron ore is down around 1% on the session, it had been a touch lower.

Regional equities:

  • Nikkei -0.32%
  • Shanghai +0.09%
  • HK +0.05%
  • ASX -0.64%

GBP/JPY delivery service.

Have a great weekend all!