Asia FX Handover - The US Hike Tariffs On Chinese Goods
Matt Simpson May 9, 2019 11:50 PM
- As promised, the US raised tariffs from 10% to 25% on $200bn of Chinese goods on Friday, and China has vowed to retaliate. Earlier, Trump stated he remained confident a deal can be reached ‘this week’. Despite reports that China’s Vice Premier had left the treasury building and trade talks early, trade talks are set to resume on Friday.
- AUD led commodity currencies higher and are today’s strongest majors, as traders look ahead to a no-deal outcome and how it could see the Fed shift from neutral to dovish. JPY is the weakest major following news that trade talks would be extended into Friday. Volatility was contained throughout most of the session, although 5 JPY pairs exceeded their typical daily ranges. Index futures are mostly in the green.
- From RBA’s quarterly SOMP (statement on monetary policy): Paying close attention of employment data at upcoming meetings and a lower unemployment is “achievable”. They’ve forecast trimmed mean CPI at 1.5% in June 2019 and for unemployment to fall to 4.75% by 2021. The weakness in housing market is dragging on inflation, and they’ve lowered their forecast for consumption growth. Trade tensions remain a downside risk to the global outlook.
- From BOJ’s summary of opinions: Appropriate to clarify forward guidance, such as by mentioning time frame on how long rates will remain low.
- On the data front, Japan’s household spending increased by a mere 0.1%, up from -2% prior but below 0.5% expectations. And Overtime pay declined -3.1%, its fastest rate of contraction since Feb 2013.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.