Forex and Bitcoin news for Asia trading Tuesday 13 November 2018
- China’s top trade war negotiator to head to the US, pave way for Xi-Trump meeting
- Abe - Pence discussion: Agreed to expand bilateral trade and investment
- China's Premier Li says China is willing to improve free trade through discussion
- Goldman Sachs on the yuan, the PBOC, and 7
- Looks like intervention in the yuan - China state banks selling USD/CNY
- Janet Yellen sees 3 or 4 hikes from the Federal Reserve in the next 12 months
- People’s Bank of China sets yuan reference rate at 6.9629 (vs. yesterday at 6.9476)
- PBOC is getting ready to loosen up - check this out from Governor Yi Gang
- Australia Business Confidence 4 (prior 6), Business Conditions 12 (prior 15)
- A third of small and medium sized UK firms think GBP to fall sharply after Brexit
- Japan finance minister Aso says no auto tariffs talks with Pence
- UK data - consumer spending drops in October
- How slowing global growth impacts on Italy (and lookin' at you too EUR)
- New satellite images identify more undeclared North Korean missile operating bases
- US Tres Sec Mnuchin has spoken with China on trade
- S&P has lowered Argentina's credit rating to B from B+, outlook stable from negative
- Goldman Sachs' 'bear market risk indicator' is indicating bear market risk
- RBNZ dep gov Bascand says bank lending standards have tightened
- Australia - ANZ / Roy Morgan weekly consumer sentiment survey: 119.8 (prior 116.8)
- More on PM May's Brexit endgame comments
- Trade ideas thread - Tuesday 13 November 2018
- ICYMI: White House said to be circulating draft report on auto tariffs - meeting Tuesday
- NZ data - October food prices down 0.6% m/m (prior down 0.1%)
- UK PM May says Brexit talks are reaching their 'endgame'
- More from Fed's Daly - appropriate to get rates back to neutral
We had some forex movement in Asia today. Currencies initially continued their US time move (generally stronger for the USD) before US/China trade news reversed the direction.
Early on news came out that US Treasury Secretary Mnuchin had spoken to his counterpart in China on Friday to defuse trade tensions ahead of the meeting between Presidents Xi and Trump coming up at the end of the month. A few hours later HK press reported that Chinese vice-premier Liu He is expected to visit the US for trade talks. This may well be some sort of short-term fix ahead of the summit, but I could be wrong. Maybe everything is hunky dory (you can probably tell I reckon its just a short-term fix). Do keep in mind that US President Trump has shown little sign of backing off on his approach to trade. Indeed, during the US afternoon there was news he has called a meeting for Tuesday on auto tariffs.
Anyway, the 'risk' markets liked it. Market favourite China proxy, the Australian dollar, got a good kick higher, from circa 0.7180 it moved towards 0.7210 (and above). NZD, CAD, EUR, GBP all gained against the US dollar also.
USD/JPY, of course, after having slipped a little in morning trade caught a bid, from lows around 113.60 it traded back above (just a little) 114.
China stock markets recovered some of their losses:
- Nikkei -2.34% (had been down more than 3%)
- Shanghai +0.11%
- HK -0.10%
- ASX -1.74%
Also today, the PBOC intervened to support the onshore yuan ahead of 7 on USD/CNY. Major Chinese State banks were the sellers of USD/CNY. Some liquidity action from the Bank too, driving up borrowing costs for CNH in Hong Kong, overnight rates to their highest in around 5 weeks.
Still to come:
- UK jobs and wages report due Tuesday - preview
- FX option expiries on Tuesday 13 November 2018
- Heads up for ECB speakers coming on Tuesday, 3 of them
- Federal Reserve speakers coming up on Tuesday (US time) - one voter, one non voter
- AUD traders - heads up for wages data due Wednesday
- FX options expiring later this week