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Thursday, October 31, 2019

USD/JPY revisiting its earlier lows after the BOJ announcement

While the Bank of Japan held policy unchanged today the key takeaway was a change to forward guidance signalling further policy accommodation ahead (ie lower rates)

More on the BOJ statement - forecasts and more

I posted the main points from the Bank of Japan here:  -   More: And, from the BOJ quarterly report: -  risks are skewed towards downside for economy, prices

BOJ announce September policy decision - policy held steady

Bank of Japan monetary policy statement for October 2019 While policy is unchanged the BOJ has adjusted its forward guidance  boj keeps monetary policy steady boj maintains short term rates at target at -0.1% boj maintains 10 boj modifies forward guidance on interest rates to more clearly signal future chance of rate cut boj: boj expects short, long term rates to

BOJ - is a change in policy coming up? The announcement is coming later than usual

The Bank of Japan monetary policy statement is most often between 0230 and 0330GMT. We are on approach to 0330GMT now, about to tick over.  The longer this statement takes to be announced the more likely there is some change afoot - hence board discussion takes longer.

HSBC has cut its Hong Kong prime lending rate for the first time in 11 years

HKMA cut its cash rate earlier - but they always do that when the Fed does (currency peg related move)  HSBC prime rate from 5.125% (was raised to 5.125 in September last year) to 5% 

RBA monetary policy meeting Tuesday November 5 - on hold expected, but …

Reserve Bank of Australia Nov meeting coming up next week. A quick preview. While we await the BOJ statement (due most likely some time up to 0330GMT, the longer we wait the more likely there is some change change in policy prolonging discussion … ).

The top political meeting of the year is underway in China - what will come of it?

The "plenum" ends today and we'll get Xinhua news agency issuing details of what was agreed to. - China's leaders (the upper echelons of the ruling Communist Party) are in the midst of a four-day plenum in Beijing The plenum is the most important party meeting each year (every 5 years is the party congress, which is

China manufacturing PMI recap - 6 months in contraction now

The official PMIs from China for October were out earlier: The have a scan through of the data. In brief: Financial Times - its lowest level since June - China's manufacturing sector shrank for a sixth month And, ahead:

Early heads up - US clocks go back one hour this coming weekend

If you are (almost) anywhere else in the world you'll likely need to check your local time for US market openings and closings. So a heads up. Canadian clocks change also.

USD losing more ground in Asia trade

Wide USD weakness, within small sort of ranges. The moves continue the USD weakness after the FOMC cut overnight, despite signalling a pause is on the way. USD up across the board …. pick a currency …. USD/CAD is little changed though.

Magnitude 6.5 earthquake - Mindanao, Philippines (Thursday, 31 October 2019)

I have not yet seen any tsunami alert ForexLive

Next event on the economic calendar is the BOJ October policy statement

There is no firmly scheduled time, somewhere in the 0230 to 0330 GMT time window is likely: Earlier previews:Also, from morning press in Japan:Adding this snippet from TD, in the no change camp:

PBOC sets USD/ CNY reference rate for today at 7.0533 (vs. yesterday at 7.0582)

Volatility in the onshore yuan mid rate continues from the People's Bank of China again today  Mid rate takes CNY to its highest since August 22nd Skips open market operations, 60bn yuan in RRs mature today.

FX option expiries for Thursday October 31 - for the 10am NY cut

EUR/USD -  1.1100 538m EUR -  1.1150 515m -  1.1200 1.0bn -  1.1230 545m -  1.1235 578m   USD/JPY -  108.00 1.0bn USD

China official PMIs for October. Manufacturing 49.3 (vs. expected 49.8),

From China's National Bureau of Statistics, the official PMIs for the month Manufacturing in at a big miss indeed, 49.3 - expected 49.8, prior 49.8 Non-manufacturing 52.8

Australia Private Sector Credit for September: +0.2% m/m (expected 0.3%)

Credit growth data for Sep 2019  Via the RBA: Housing credit growth y/y decline is not unexpected.  more to come   ForexLive

Australia terms of trade data for Q3. Export prices +1.3% q/q, import prices +0.4% q/q

Data via the Australian Bureau of Statistics for the third quarter of 2019 Import Price Index +0.4% q/q - expected 0.5% , prior 0.9% Export Price Index +1.3% q/q 

Australia Building Approvals for September +7.6% m/m (expected 0.0%)

Building approvals/permits for Sep 2019 +7.6% m/m … this is a solid beat in an admittedly volatile data set.  - expected 0.0% m/m, prior -1.1%   -19.0% y/y

Keep your eye on cable - GBP/USD knocking on the door for a pop?

Check it out, cable consolidating its gain. Does Asia have the impetus to move it higher? We just had some consumer confidence news - not usually a forex mover though. FOMC rate cut has benefitted currencies across the board. On the other hand there are some perceptions it was a 'hawkish' cut and there well be

Citi on a likely USD turn

I posted earlier on the post_FOMC AUD view from Citi:  More now, this more broadly and in summary: - also say EURUSD is set to move higher - while USD index could weaken … 

UK - GfK Consumer Confidence for October: -14 (expected -13)

Consumer Confidence -14 - expected -13, prior -12 more to come   ForexLive

New Zealand - ANZ survey October Business Confidence: -42.4 (prior -53.5)

ANZ business survey for October  Business Confidence improves (sheesh) to -42.4 - prior -53.5 (an 11 year low that was) Activity Outlook declines to -3.5

Japan Industrial Production for September (preliminary): 1.4% m/m (expected 0.4%)

Japan Industrial Production for September Preliminary data. 1.4 % m/m - expected 0.4% m/m, prior -1.2% 1.1 % y/y - expected -0.1% y/y, prior -4.7% Looking ahead, the Ministry see:

Wednesday, October 30, 2019

Christine Lagarde: Global economic growth is fragile

Incoming ECB president, Christine Lagarde, is speaking on French radio - Trade wars, Brexit and geopolitics contributing to fragility - Trade tensions are taking a toll on confidence ForexLive

France Q3 preliminary GDP +0.3% vs +0.2% q/q expected

Latest data released by INSEE - 30 October 2019 - (Q2) +0.3% - Preliminary GDP +1.3% vs +1.3% y/y expected - Prior (Q2) +1.4% ForexLive Quarterly growth is more or less similar to Q2 and within expectations, further reaffirming the fact that the French economy is still holding up still.

Nikkei 225 closes lower by 0.57% at 22,843.12

The Nikkei eases lower following losses in Wall St overnight ForexLive Tech stocks were the weakest performers, much like the NASDAQ yesterday - which fell by 0.6% - and that sentiment is shared across the region as well.

Trade ideas thread - European session 30 October 2019

Daily thread to exchange ideas and to share your thoughts Markets are still relatively calm in anticipation of the Fed today but expect things to pick up over the coming sessions once we clear more and more key risk events.

European pre-market: Currencies settle into pre-FOMC lull

Not much change across major currencies to start the day ForexLive It is a fairly uninspiring start to the day as markets settle into a bit of a lull in anticipation of the FOMC meeting decision later today.

What happens to Brexit now that the UK heads towards a December election?

The Brexit drama takes a breather as the UK domestic agenda comes forward As the UK gets ready to head to the polls, it leaves us in a bit of a limbo with regards to Brexit and what may happen over the next few weeks.

Economic data coming up in the European session

The data docket picks up ahead of the FOMC meeting decision later today The UK is now headed for a 12 December election and with the domestic agenda taking over, Brexit will have to settle for the backseat for now. As such, expect the pound to be confined in a choppy range over the next few

Heads up: Germany states' CPI readings due later today

German states will be releasing their CPI prints for October today In September, headline annual inflation slowed to +1.2% y/y - the lowest since February 2018 - and expectations for October is for a further slowdown to +1.0% y/y.

ForexLive Asia FX news wrap: Boris Johnson secures a UK election

Forex news for Asia trading Wednesday 30 October 2019 The UK will hold a general election on Thursday, December 12 amidst the swirl of Brexit. UK PM Johnson secured enough votes Tuesday evening UK time. Whether it resolves anything on Brexit remains to be seen, but there is a chance it'll break the deadlock so at

FOMC meeting - domestic considerations

I retweeted this from Chris Weston at Pepperstone (@ChrisWeston_PS), but popping it in here ICYMI. For more on the FOMC: ForexLive

Bank of Canada monetary policy meeting preview

Wednesday 30 October 2019, announcement coming at 1400GMT A couple of bank previews, in summary. An on hold decision is basically the  unanimous expectation. Apart from that ...

RBA expectations - December interest rate cut more likely?

Snippet from AMP (Australian fund manger), saying the next RBA rate cut is now more likely in December:  - following recent comments from RBA Governor Lowe indicating he not in a hurry to cut

After today's CPI Westpac maintain their forecast for an RBA rate cut in February

A snippet from the WPAC response to the inflation data out earlier: ----- Data is here from earlier: And: AUD now drifting back off again. Check out the range for the session - its really not much:

MUFG says the BOJ is likely to ease further - preview of Thursday's policy meeting

Senior economist at Mitsubishi UFJ Morgan Stanley  - says that the BOJ will add additional easing at tomorrow's meeting Recognises its a minority view, but cites:

FOMC meet today - rate cut is widely expected but its 'what's next?' of most focus

Earlier previews of the Federal Reserve Federal Open Market Committee policy meeting are here: Via the WSJ a good in summary look at what will be the focus in the 

PBOC sets USD/ CNY reference rate for today at 7.0582 (vs. yesterday at 7.0617)

People's Bank of China with another revaluation for the onshore yuan today.      In OMOs - PBOC skips today. - 200bn yuan mature  ForexLive

FX option expiries for Wednesday October 30 at the 10am NY cut

EUR/USD -  1.1125 848m EUR amount -  1.1200 755m  USD/JPY -  108.00 756m USD -  109.00 2.1bn  NZD/USD -  0.6350 236m NZD  EUR/GBP

ICYMI: US-China trade deal might not be ready for signing in Chile next month

A report from Reuters overnight citing a White House spokesman  The signing is intended at the an Asia-Pacific Economic Cooperation summit in Chile, November  Nov. 16-17.  U.S. President Donald Trump and China's President Xi Jinping will both be there. 

AUD response to Australian Q3 CPI data is up a few tics. Net for the day, little changed.

The Australian dollar had traded off a little in the minutes leading up to the inflation data release. Upon release AUD/USD has recovered the dip and is sitting around levels it was at the NY close.

Australia Q3 CPI: Headline 0.5% q/q (vs 0.5% expected)

Australian inflation data for the July to September quarter 2019 Headline 0.5% q/q and 1.7% y/y - in line with median consensus expectations  Core inflation Trimmed mean 0.4% q/q and 1.6% y/y - in line with median consensus expectations  The RBA target band is, in a nutshell, 2 to 3% for core inflation y/y.  Well under. 

Heads up for Australian CPI data due at the bottom of the hour

Q3 CPI due at 0030 GMT  Headline - expected 0.5% q/q, prior 0.6% - expected 1.7% y/y, prior 1.6% Core inflation Trimmed mean - expected 0.4 q/q, prior 0.4% Core inflation Weighted median

UK data - BRC Shop Price Index -0.4% y/y for October (prior -0.6%)

British Retail Consortium monthly shop price index Eyes on the UK election now: ForexLive

Japan - Retail sales for September +7.1% m/m (vs. expected +3.5%)

The sales tax hike took effect on October 1, so September saw a jump in retail sales ahead of the tax hike. And now, without any further ado …. data result:

Tuesday, October 29, 2019

RBA's Lowe: We are in for a protracted period of very low interest rates

Some remarks by RBA governor, Philip Lowe, after his speech earlier - Rising house prices a reflection of lower rates - Rising house prices not a problem so far, part of the transmission mechanism ForexLive

Pound still in limbo with yet another UK parliamentary vote eyed today

Cable continues to sit in no man's land as Johnson tries for an election again ForexLive Despite the fact that price is staying below the key hourly moving averages, putting sellers in near-term control, it doesn't feel like there is any momentum for cable to go chasing a downside move at the moment.

Eurostoxx futures -0.1% in early European trading

Flattish tones observed in early trades - German DAX futures flat - French CAC 40 futures flat - UK FTSE futures -0.1% ForexLive The overall risk mood holds more steady as we begin the session with US futures also pretty much flat and bond yields nearly unchanged on the session as well now.

UK October Nationwide house prices +0.2% vs 0.0% m/m expected

Latest data released by UK Nationwide Building Society - 29 October 2019 - -0.2% - House prices +0.4% vs +0.3% y/y expected - Prior +0.2% ForexLive The data is released a little earlier than anticipated. A slight improvement in the price of dwellings, though the annual change is barely there as the housing market continues to stay more subdued

USD/JPY holds at near two-month highs, what levels to look out for today?

USD/JPY trades at its highest levels since 1 August ForexLive The pair remains underpinned as risk trades are looking perky to start the new week, with the S&P 500 hitting a record high and Treasury yields climbing on trade optimism.

RBA: CPI data key for hints of rate cut

CPI out tomorrow at 13:30am Inflation and unemployment have been the key indicators for the RBA. Labour data has shown strength recently with additional full time jobs being added to the workforce and the unemployment rate dropping from 5.2% to 5.3%. The present chances of a rate cut in November is now at 18%. 

Nikkei 225 closes higher by 0.47% at 22,974.13

The Nikkei touches the 23,000 mark but ends the day just shy of that The mood among equities in the region is more mixed though with the Hang Seng and Shanghai Composite down by 0.4% and 0.5% respectively.

Trade ideas thread - European session 29 October 2019

Daily thread to exchange ideas and to share your thoughts Not much else is happening as the focus continues to stay on the risk mood and Brexit ahead of the Fed meeting decision tomorrow.

European pre-market: Currencies keep calm amid steady markets

Aussie and kiwi hold minor gains into the European morning open ForexLive The risk mood continues to stay more lively on the new day after a solid gain for risk trades in overnight trading. The S&P 500 hit a new record high while Treasury yields climbed on the back of more upbeat sentiment surrounding US-China trade.

Heads up: RBA governor Lowe due to speak at 0645 GMT

RBA governor Philip Lowe will be giving a speech in Canberra It is a lecture that seeks to reflect the legacy of the late economist himself and his contributions to public and official affairs. The title of Lowe's presentation will be "Some Echoes of Melville", so it should for the most part encompass the scope above.

Brexit: Are we still headed for an election in the UK?

Will Boris Johnson get his election wish at the fourth time of asking? ForexLive Johnson's election motion yesterday failed well short of the two-thirds majority needed (299-70) but that isn't stopping him from pushing for one again today.

Economic data coming up in the European session

Yet another light session in terms of economic releases The S&P 500 closed at a record high while bond yields are slowly inching higher, alongside yen pairs, with trade optimism continuing to fuel the run in the new week.

ForexLive Asia FX news wrap: Boris tries to become Grinch again Tuesday

Forex news for Asia trading Tuesday 29 October 2019 Yes, UK PM Boris Johnson is trying to try again for a vote on a pre-Christmas election. The parliament will vote on  'short bill' on Tuesday for a general election in the second week of December. More in the bullets above. GBP/USD fell away a few

New Zealand Treasury sees a risk S&P could remove their positive ratings outlook

NZD retracing some of its earlier gain on this  - New Zealand Treasury sees a risk S&P could remove their positive ratings outlook  - Says the change to the outlook would not effect borrowing costs Bloomberg with the headlines, citing advice from Treasury to the NZ fin min obtained by Bloomberg 

AUD traders - RBA Lowe speaks later today and Q3 CPI due Wednesday - preview

Reserve Bank of Australia Governor Lowe speaks at 0645GMT And third quarter inflation data is due on 30 October 2019 at 0030GMT Earlier previews are here: A couple of snippets from bank previews, RBC:

Brexit - More on UK PM Johnson's plan to try again for a December election - parliament vote on Tuesday

I posted earlier on this here:  Brexit - Boris lost the vote but it appears a December election is still a strong possibility On Monday Johnson lost his vote for a December 12 election:

US House of Representatives looking likely to move forward on the Trump impeachment - here's what you need to know.

I reckon need to know number 1 is Trump is unlikely to end up being impeached. IMO anyway. But, before the final decision is made here is a good summary of the process that'll unfold via AFP. A decent guide, not a legal text, K?

PBOC set the onshore yuan at its strongest in 2 months

Reference rate setting is here: CNY reference rate strongest in 2 months - On a % basis its the strongest gain for CNY in about 6 weeks. The onshore yuan has been clawing back ground as the prospects of the phase 1 trade deal have improved.

PBOC sets USD/ CNY reference rate for today at 7.0617 (vs. yesterday at 7.0762)

 People's Bank of China revaluing the onshore yuan today ForexLive

FX option expiries for Tuesday October 29 at the 10am NY cut

USD/JPY  NZD/USD  EUR/GBP ForexLive

Japan economy minister Nishimura says the government will join forces with the BOJ to exit deflation

Nishimura would be referring to fiscal policy with this comment. ForexLive

NZD pops - some hedging news crossing

The New Zealand dollar is getting some bids, taking it up through 0.6560 and therefore above it overnight high The only news coming over the wires is NZ's Superannuation Fund (a big investor) is reviewing its FX hedging policy.

Federal Reserve FOMC decision due Wednesday - preview

Federal Open Market Committee meet Wednesday 30 October 2019  - announcement due at 1800GMT Earlier previews here: Via Société Générale, in brief:

Monday, October 28, 2019

Here is what’s on the economic calendar in Asia today - an inflation indicator for Japan will be higher

2230 GMT Australia weekly consumer sentiment - ANZ/Roy Morgan weekly survey - prior 111.6, which was a small bounce from the week before. Low levels for this indicator. 2330 GMT Tokyo inflation data for October - note that this is Tokyo area CPI (national level CPI for the month follows in three weeks)

S&P index closes at an all time record. Nasdaq trades above record close.

Nasdaq can't stay above the record close level The S&P index is closing at an all-time record high. The NASDAQ index traded above the all-time record close, but backed off into the close. The index also failed to reach the all-time intraday high price at 8339.64. The high for the day reached 8335.56

ForexLive Americas FX news wrap: Boris delays Brexit until Jan 31

Forex news for New York trade on October 28, 2019: Markets: - Gold down $13 to $1492 - WTI crude down 86-cents to $55.79 - S&P 500 hits all time record, closes up 17 points to 3039 Stock markets are in charge today as earnings season rolls on. So far commentary has been better than feared and few CEOs are

Soft Australian Q3 CPI this week could increase chance of RBA cut in Nov - Citi

CPI data to come Citi discusses its expectations for this week's Australia Q3 CPI print. "Despite Q3 typically being a seasonally solid month for Australian CPI,. Citi's forecast for the more important trimmed mean CPI is 0.4%, leaving it just short of RBA's August SMP forecast," Citi projects. 

New highs for Nasdaq. Can it drive to a new all-time high?

The price is above the high close at 8030.21 The S&P index is already above the all time high close and has made a new all-time high as well. The all time high was at 3027.98.  The price is currently trading at 3041.54. The high for the day reached 3044.08. 

Boris Johnson says government will give notes of a short bill for Dec 12 election

It will be interesting to see what the Lib Dems do The Liberal Democrats have been pushing for Dec 9. Johnson: SNP: Corbyn: ForexLive

UK parliament rejects Johnson's request for an early election

Labour abstains 299 votes in favour, 70 against. The rest abstained. The vote didn't achieve the two-thirds majority required to trigger a vote. ForexLive

EURGBP settles between extremes as buyers and sellers remain stuck

100 and 200 hour MA in between the two extremes The EURGBP is settling between the support at 0.8585-0.8599 and the resistance 0.8670-81 (see yellow swing areas in the chart below). The price has traded between those extremes for most of the time since October 16th. 

UK parliament begins vote on early election

Results expected in 15 minutes The DUP confirmed it will be voting against the election. It's expected to fail. ForexLive

What's priced in for the FOMC and BOC

Two meetings coming up on Wednesday The Bank of Canada decision is Wednesday morning and the Federal Reserve is due that afternoon. For the Bank of Canada, no change in the 1.75% overnight rate is virtually guaranteed with the market pricing a 98.9% chance of no move. Given market pricing, it might be an extended period on

Boris Johnson spokesman: We are focused on Dec 12 election

Comments from his spokesman: Johnson won his seat by 5000 votes in the past election but the demographics in Uxbridge are shifting against him. Jeremy Corbyn also faces a tough test from Lib Dems for his seat.

BOE's Tenreyro: Will watch how demand reacts to Brexit

Comments from Tenreyro: ForexLive

EU pledge on no more Brexit extension would be as valuable as on not re-opening withdrawal agreement

In other words, worthless Boris Johnson asked the EU to guarantee no more Brexit extensions beyond January 31 but it's a longshot request. The only solid EU position throughout Brexit was that it would not be the cause of a no-deal Brexit. In the past week, they once again proved it.

UK PM Johnson to EU Tusk: "I confirm the extension"

Vote on General Election will take place at 6:45 London time In a letter to EU's Tusk, UK PM Johnson says: ForexLive

BOE Tenreyro: Exchange rates continue to have important effects on export volumes

Makes no comments on outlook for UK monetary policy The BOE Silvana Tenreyro is giving a speech in London, but she does not make comments on outlook for UK monetary policy. She does say, however:

European shares start the week with gains

Major indices closed the day with modest gains The major European indices are starting the week with modest gains. The provisional closes are showing:

The USDJPY tests its 200 day MA

USDJPY 200 day MA at 109.033 The USDJPY has moved to another intraday high and in the process is testing its 200 day MA at 109.033. The high price (bid side) has reached 109.035. 

GBPUSD higher but still finding resistance at trend line/200 hour MA

200 hour MA at 1.28766 and trend line near the same level put a lid on the GBPUSD The GBPUSD has extended the choppy trading higher in the NY session, but the topside resistance defined by a topside trend line and 200 hour MA have not given way. The 200 hour MA comes in at 1.28766

USD/JPY climbs to the highest since July 31

What's the message here? Stocks are at a record and USD/JPY has completely unwound the drop that started on July 31. What happened that day? That was when Trump shocked markets with a fresh round of tariffs on China. Since then the Fed has cut a couple times and is expected to cut again on Wednesday.

USD/JPY headed for a test of 109.06/37 - Credit Suisse

Credit Suisse sees more upside in USD/JPY For bank trade ideas, . Credit Suisse discusses USD/JPY technical outlook and "A quiet end to a quiet week leaves the immediate outlook unchanged, with the market still holding its rising 13-day average and price support at 108.35/25, but with the market still unable to stage a clear break of

If you are looking for the European stock close, wait a little longer

Europe changed their clocks this week. The US/Canada gets in synch  next week.  Europe turned their clocks back an hour on Sunday as day light savings ended.  The US and Canada don't synch up with them until next Sunday.  

Stock Market: The earnings of Google, Apple, and more

A look at earnings reports coming up Monday and Tuesday this week The in the United States continues. This means that stocks of the largest American companies will likely make big moves. Below we have gathered some important information for those who want to trade on these releases.

Gold back below $1500 and between converging trend lines on the daily chart

The precious metal is down over $12 at $1492.50 The price of gold has moved sharply to the downside. It is currently trading down about $12 at $1492.50. 

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