By Areena Fx- Forex news for Asian trading on Wednesday, 18 October 2023
- China – A Country Garden offshore bondholder says has not received interest payment
- A packed agenda of six Federal Reserve speakers coming up Wednesday, along with Beige Book
- China’s Xi says will remove foreign investment access restrictions in manufacturing sector
- AUD and NZD jump after the better than expected data from China
- China Sep. Industrial Production 4.5% y/y (exp 4.3%) & Retail sales 5.5% y/y (exp 4.9%)
- China Q2 GDP +1.3% q/q (expected 1.0%)
- UN Sanctions on Iran’s ballistic missile and drone program have just expired
- Bank of Japan to conduct an unscheduled bond buying operation
- PBOC sets USD/ CNY mid-point today at 7.1795 (vs. estimate at 7.3079)
- IMF slash their China growth forecasts for 2023 (5% from 5.2%) and 2024 (4.2% from 4.5%)
- US nuclear-capable B-52 bomber lands in South Korea for the first time
- New Zealand will begin publishing additional monthly price indexes
- Biden to ask tough questions in Israel, meet families of victims, hostages of Hamas attack
- X (Twitter) will begin charging new users $1 a year to access key features
- Australia data: Westpac Sep. Leading Index “improves but still pointing to sub-par growth”
- China’s sustained, sophisticated, scaled theft of intellectual property is the worst ever
- More from RBA Gov Bullock – if inflation remains higher than expected will respond
- RBA Gov Bullock says is a bit more worried about the inflation impact from supply shocks
- US Congress has heightened security posture, increased police presence
- ICYMI – ECB’s Holzmann says may require additional ECB rate hikes
- Who is buying US stocks? BoA says “wide participation”, institutional, retail, hedge funds
- Coinbase shares to surge – the Bitcoin ETF false news was a dress rehearsal for real thing
- Jordan has cancelled the summit meeting in Amman with Biden, Egypt and Palestinian leaders
- US Congressman Jordan says the House will vote for speaker at 11am Wednesday, 18 October
- Fed’s Kashkari says inflation is still too high
- Oil – private survey of inventory shows much larger draw than was expected
- Forexlive Americas FX news wrap: Yields jump as retail sales beat, dollar volatile
- Mixed close for the major indices today
- Trade ideas thread – Wednesday, 18 October 2023
- There were plenty of moving parts during the Asian session on Wednesday. The political and market reverberations of the explosions that killed 500 people at a Gaza hospital continued. Despite it becoming clear that Hamas was behind the dreadful atrocity, the rhetoric barely died down. Hamas fires its missiles at Israel from populated areas of Gaza, using the Palestinian people as human shields, and in this case the evidence points to one of the missiles causing the death and destruction at the Palestinian hospital. The charitable interpretation is that it was a misfired Hamas rocket. The alternative, a deliberate attack on civilians, is horrible to contemplate.
- Markets fear that escalation like this in the Middle East will hit energy exports. This was a factor in the oil price surge during the timezone.
Another factor for oil was the data from China today, which showed better than expected GDP growth for Q3, and better than expected Industrial Output and Retail Sales growth in September data. This paints a picture of an expected continuing demand improvement in China, adding to the oil bid.
Also playing a part was the release of privately surveyed oil inventory data at the end of Tuesday in the US that registered a much larger crude oil headline drawdown than was expected.
Adding further fuel to the fire was Chinese Communist Party Chairman Xi speaking at the Belt and Road Forum in Beijing. Of particular note was Xi promising that China will remove all restrictions on foreign investment access in the manufacturing sector.
Gold headed higher during the session. Rising oil prices threaten to tip economies into recession, which is likely to see central banks not being so quite ‘higher for longer’ (for interest rates) as was expected prior to the Hamas attacks on Israel and the subsequent war.
The USD fell on the session against major FX. AUD and NZD were notably bid after the Chinese data. CAD, too, is stronger. EUR and GBP did little more than return to earlier highs while the hapless yen managed a gain on the session.
Reserve Bank of Australia Governor Bullock spoke today, with a hawkish tile to her comments.
Asian equity markets:
- Japan’s Nikkei 225 -0.2%
- China’s Shanghai Composite -0.6%
- Hong Kong’s Hang Seng: -0.1%
- South Korea’s KOSPI +0.1%
- Australia’s S&P/ASX 200 +0.1%
