FOREX: FX Trends Little Changed, Markets Awaiting Tariff News
Jan-23 04:40
Aggregate G10 FX moves have been negligible in the first part of Thursday trade. The USD BBDXY index sits unchanged in latest dealings, holding just under 1304.
- There was focus on a Fox News interview with President Trump, but this was largely focused on domestic issues. Trump defended TikTok during the interview, but broader sentiment didn't shift. part 2 of the interviews late US time on Thursday (so Friday time for Asia Pac markets), where foreign policy and China relations are expected to be in greater focus. For FX markets the tariff issue remains a central watch point.
- US equity futures sit modestly lower, but this follows recent strong cash gains. Most regional Asia Pac markets are higher (except for South Korea). China markets have recovered as further supports were unveiled by policy makers, but we sit off best levels. US yields are down a touch, but losses are not much beyond 1bps at this stage.
- USD/JPY is holding close to 156.55/60 in latest dealings, little changed for the session. Earlier lows were at 156.29. Export growth was slightly better than forecast but still sub other NEA economies. The trade position also improved.
- AUD and NZD are little changed. AUD/USD last 0.6275, NZD/USD around 0.5665/70.
- Looking ahead, we get French manufacturing sentiment, along with EU consumer confidence. Canada retail sales and US initial jobless claims are also out.
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FOREX: USD Modestly Higher, Yen Pares Losses Post FinMin Warning
Dec-24 01:35
Early G10 FX trends are skewed towards the USD, albeit with modest moves overall. AUD and NZD are seeing some slight underperformance (which followed some outperformance on Monday). Rhetoric around FX moves has crossed from the Japan FinMin as well.
- The reaction so far from USD/JPY has been limited. We were last 157.15/20, close to unchanged for the session. Earlier highs were at 157.39.
- Japan FinMin Kato reiterated recent concerns on FX - "JAPAN FINMIN KATO: CONCERNED ABOUT RECENT FX MOVES, RTRS" "JAPAN FINMIN KATO: RECENTLY SEEING ONE-SIDED, SHARP FX MOVES" and that the authorities will take action against excessive moves.
- USD/JPY is still sub post BoJ highs (157.93), with these comments highlighting intervention risks as we approach the holiday period. Earlier the BoJ minutes from the Oct policy meeting came and went with little market reaction.
- AUD/USD sits down around 0.20%, last near 0.6235/40. Downside focus will rest on the 0.6199 low seen recently. The RBA minutes from the Dec meeting were out earlier. Upside risks to inflation have diminished but it was still too soon to be confident that inflation is sustainably at target.
- NZD/USD is also lower, last near 0.5635/40. Also, still up from recent cycle lows.
- Trends are biased in favour of the USD elsewhere, but aggregate moves are modest. In the cross asset space, US equity futures are down a touch, along with US yields, but again overall moves are modest.
- There is little in the way of further risk events for the remainder of today's Asia Pac session.
CHINA: Central Bank Drains Liquidity via OMO.
Dec-24 01:27
- PBOC issues CNY64.1bn of 7-day reverse repo.
- Today’s maturities CNY355.4bn
- Net Liquidity withdrawal CNY291.3bn.
- The PBOC controls liquidity in the interbank market through the daily issuance of reverse repo.
MNI: CHINA PBOC CONDUCTS CNY64.1 BLN VIA 7-DAY REVERSE REPOS TUES
Dec-24 01:24
- CHINA PBOC CONDUCTS CNY64.1 BLN VIA 7-DAY REVERSE REPOS TUES
