Forex news for Asia trading Tuesday 5 January 2016

China:

  • China retools Bank Reserve Ratio, casting doubt on RRR cuts
  • Wall Street Journal explains "Why China’s Market Fell So Much"
  • Early Asia wrap - where we at?
  • PBOC said to be intervening to support yuan
  • On PBOC's huge cash injection: "likely to be more easing"
  • China stocks - Shanghai Composite moves into positive for the day
  • China CSRC says studying rules to regulate share sales by major shareholders
  • China stockmarket opening indications - Shanghai Comp to open down 3%
  • China CSRC says will continuously improve stock market circuit breaker mechanism
  • PBOC injects 130 bn yuan - sets USD/CNY at 6.5169
  • Xinhua News Agency reports stock market trading halts won't become 'normal'
  • China Securities Journal carries more talk of a China RRR cut

Fed's Williams:

  • Fed's Williams: Repeats he expects 3-5 rate hikes this year
  • Fed's Williams: Monetary policy is 'poorly suited' to financial stability goals

Meanwhile in the rest of the world:

  • Australia is among the wildest frontiers for online FX cowboys
  • Japanese election coming up in 2016, a quick look ahead
  • Morgan Stanley's 'trade of the week' is to short AUD/JPY
  • US Treasury Secretary Lew: US has most resilient economy in the world
  • NZD traders note - Global Dairy Trade auction coming up
  • Australia - ANZ Weekly consumer sentiment: 116.3 (prior 115.4)
  • Tuesday 5 January 2016 trade ideas thread

We are still back in 2015 with all eyes on shaky Chinese stockmarkets in Asia.
We did have comments today from Federal Reserve Bank of San Francisco head John Williams, but they were mainly ignored. Maybe 'cause we were waiting on China stock markets to open or maybe because Williams is rightly ignored, he rarely says anything of much use. Today it was that he is expecting 3 to 5 Fed rate hikes in 2016. Yeah, right.

Anyway, back to China stocks.

Stockmarkets opened around 2.5% lower but did not sustain down there. There were numerous actions from officials, including a huge injection of funds into the money market (the biggest since September of 2015), intervention in the currency market in support of the yuan, and the likelihood of direct purchasing of shares (this is unconfirmed), along with media reports of new restrictions on selling. No word yet if any hapless sellers have been arrested on trumped up charges, but I expect that'll come soon enough.

Anyway, back to China stocks.

They rallied from the opening weakness and have closed for the lunch break at a positive for the session (so far, at least).

USD/JPY was bought (some chatter of Chinese buyers ... unconfirmed) after an early dip; the stabilisation in Chinese stocks (yes, thats right, back to China stocks again) diminished the attractiveness of the yen. The AUD was also a beneficiary of the stabilisation, gaining to above 0.7210 and just under there as I update.

EUR, CHF, GBP were all subdued, as was the Kiwi ahead of tonight's dairy auction.

Gold has net edged a little higher on the session while oil is up a few cents.

Regional equities with Shanghai closed for the lunch break:

  • Nikkei -0.4%
  • Shanghai +0.41%
  • HK -0.02%
  • ASX -1.64%

Still to come:

  • NZD traders note - Global Dairy Trade auction coming up