ForexLive Asia FX news: GBP dumps early on UK election concern

Forex news for Asia trading Wednesday 31 May 2017

• Moody"s on global growth, risks, China


• Allow me to introduce myself


• AUD/USD - NAB consumer spending data slowing in Q1


• Bank of Japan bond buying program for June will be published today


• Yuan strength - onshore hits a 4 month high


• AUD dropping away after the data


• Australia, private sector credit for February: 0.4% m/m (expected +0.4%)


• BOJ JGB buying operation today - same amounts as previous


• PBOC sets USD/CNY central rate at 6.8633 (vs. Friday at 6.8698)


• NZ data - ANZ (May) business confidence 38.3 (prior 11.0) & activity outlook 14.9 (37.7)


• China (May) Manufacturing PMI: 51.2 (expected 51.0, prior 51.2)


• Moody"s says risk of major countries leaving EU has declined


• China (May) Non-manufacturing PMI: 54.5 (prior 54.0)


• ANZ on the USD - political risk has swung from Europe to the US


• Japan Industrial Production (April, preliminary): +4.0% m/m (expected +4.2%)


• RBNZ"s Wheeler: Pleased house price growth has slowed


• UK data - GfK consumer confidence for May: -5 (expected -8, prior -7)


• UK - BRC Shop Price Index for May: -0.4% y/y (expected -0.3%, prior -0.5%)


• Japan April industrial production expected to hit a 6 year high


• China press warns of potential liquidity turbulence coming in June


• GBP retracing after it dropped bigly on the YouGov poll.


• UK election - Times front page says "Shock poll predicts Tory losses"


• UK election - More on that YouGov poll (& GBP falling now)


• Election: Poll projects UK conservative party to fall 16 seats short of overall majority


• RBNZ"s FSR: Risks to financial system have fallen


• ICYMI Forexlive Americas FX news wrap: US dollar weakens after Core PCEs YoY decline

And what a GBP dump!

The headline that hit said:

• UK Conservative party projected by polling firm YouGov to fall 16 seats short of overall majority

The reaction was a GBP sell, from circa 1.2860 quickly down below 1.2800. As further details trickled through:

• it was a projection,


• with wide margins for error,


• with questionable methodology


• ... and who believes polls anyway?

GBP retraced for the balance of the session.

BEFORE:

AFTER (currently):

USD/JPY was a good mover also, on a slow rise into the Tokyo fix and sustaining its gain and it moved higher into midday (Tokyo time) to test its European high circa 111.20. We had data from Japan in the morning (preliminary industrial production for April). It posted the best growth since April of 2011, cars, car parts, electronic components leading output higher. Something to watch is the rise in car and truck inventory, though,  For the yen, month-end flows complicated the picture and there was no clear catalyst for its weakness against the USD on the session.

EUR/USD and USD/CHF were both much quieter, with small ranges.

China data today (official manufacturing and services PMIs) was better than was expected. This may be a function the surveys being official and we now await the private survey (Caixin/Markit) for comparison purposes. CNY strengthened and offshore overnight yuan borrowing rates rose.

AUD moved a little stronger with better Chinese data, but soon slipped again. A local bank released its own results for retail sales in April (ahead of official data due tomorrow in Australia for retail sales), showing lower online retail sales in April compared with March. And, or course, iron ore futures in China were sold off yet again, down more than 3% so far on the day.

NZD/USD is little changed on the session; after popping to above 0.7110 its back to near where we started with it. USD/CAD little net changed on the session after a minor swing. Gold has lost a few dollars, not much in it, oil a tad lower also

Regional equities:

• Nikkei -0.14%


• Shanghai +0.07%


• HK -0.09%


• ASX +0.11%

Still to come:

• Please welcome Matt aboard! Allow me to introduce myself

ForexLive Asia FX news: GBP dumps early on UK election concern
ForexLive Asia FX news: GBP dumps early on UK election concern
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