ForexLive Asia-Pacific FX news wrap: Yen, oil both sharply lower
Citi lowers its Q4 2024 Brent forecast to US$70/bbl (from $74/bbl)Bank of Canada Governor Tiff Macklem is speaking on Monday, October 28, 2024US election - Trump speaker calls Puerto Rico a pile of garbage, immediate backlashReports that McDonald’s (MCD) is to resume selling Quarter Pounders in all restaurantsPBOC sets USD/ CNY reference rate for today at 7.1307 (vs. estimate at 7.1311)China vice fin min says further stimulus details after National People’s Congress sessionICYMI, People's Bank of China open market outright reverse repo operations facilityWeaker yen = stronger Nikkei relationship holding so far - Monday, October 28, 2024People's Bank of China launches monthly reverse repo oerations to ensure liqudityMore Asia FX verbal intervention - not the yen again (South Korea)Boeing said to be planning a US$15bn+ capital raising - as soon as MondayJapanese ruling coalition loses majority in election; USD/JPY reacts with volatilityAsia FX verbal intervention comments - not on the yen! (South Korea)USD/JPY hits its highest since July 31Oil update - Brent (futures) circa $72Japan’s ruling coalition lost its majority in an election - yen lower to open the weekChina's industrial profits collapse in September: -27.1% y/y (vs -17.8% y/y prior)Trade ideas thread - Monday, 28 October, insightful charts, technical analysis, ideasUK & European clocks changed over the weekendNZD traders heads up - New Zealand holiday today (Monday, October 28, 2024)ECB's Knot says mkt maybe a bit over-enthusiastic on Bank rate cuts, on Dec: "we'll see"Monday morning open levels - indicative forex prices - 28 October 2024 - YEN slammed lowerUSD/JPY is above 153 on the Japanese election result - yen plungeIsrael strikes on Iran look designed to minimize the chance of retaliationNewsquawk Week Ahead: Highlights include US NFP, ISM Mfg, PCE, GDP, BoJ & UK BudgetWeekly Market Outlook (28-01 November) There were two sharp moves in Asia today:the yen fell with Japan's ruling party losing its majorityoil slid on Middle East de-escalationSince this is ForexLive, first to JPY. USD/JPY (and yen crosses) opened higher in the very early hours of trade here in Asia. It was a holiday today in New Zealand, which is the very first major FX centre to open each week. USD/JPY was above 153.00 very quickly, chopping around there for a few hours before making its way above 153.85 where it has topped out, so far at least. The news of note was the Japanese election. In (very) brief:233 seats in the lower house of the Diet are required to form a majorityJapan’s ruling coalition lost its majority, with the latest I have seen showing the ruling LDP with its coalition partner Komeito on a combined 215Most likely now is that LDP/K will bring a third party into the coalition and continue to governBut the yen has been hit due to a perception that policy normalisation may face political pressure to proceed more slowly. Cost-of-living pressures in Japan are an important political issue and its thought that a slowing of policy normalisation (rate hikes) may be a price extracted by a third party for agreement to support the LDP. straight up political instability until a new government is formed, and given a 3-way agreement now required any government will have a higher potential for instabilityAs a reminder, Prime Minister Shigeru Ishiba dissolved the Lower House only eight days after assuming office. Which seems was poor judgement. Can he last?The lower yen played a role in Japanese stocks rising. As for oil, the Israeli strikes on Iran targeted only military sites, sparing oil facilities, which allowed Iran’s oil operations to remain unaffected. That’s the very brief and simplified version of events, and very valid. Further, there are reports that Iran’s air defence is now completely compromised. Further still, the demonstrated stark reality of the huge disparity between Israeli (Western-backed) capability and Iran’s (Russia-backed) capabilities will also dissuade Iran from escalation. Oil prices were slashed on a perception that threats to supply have diminished. As I update Brent is under USD72.50.Elsewhere in FX moves have been subdued. As I post the USD is gaining a little. EUR, AUD, GBP, CAD, NZD - all a little lower against the big dollar. ------------------ In other market news:Boeing is said to be planning a US$15bn+ capital raising as soon as today.The People’s Bank of China launched a new monthly reverse repo facility (see bullets above)In US election news:The Trump campaign has faced a backlash from high-profile Puerto Ricans and other Latins, due to a comment at Trump’s New York rally from a warm up act calling Puerto Rico “literally a floating island of garbage”. With the election so close and the race so tight the risk of alienating a large swath of voters (circa 5 million people of Puerto Rican origin live on the mainland USA can vote) like this could be impactful.Some Republican heavyweights have taken to social media to disavow the comments
- Citi lowers its Q4 2024 Brent forecast to US$70/bbl (from $74/bbl)
- Bank of Canada Governor Tiff Macklem is speaking on Monday, October 28, 2024
- US election - Trump speaker calls Puerto Rico a pile of garbage, immediate backlash
- Reports that McDonald’s (MCD) is to resume selling Quarter Pounders in all restaurants
- PBOC sets USD/ CNY reference rate for today at 7.1307 (vs. estimate at 7.1311)
- China vice fin min says further stimulus details after National People’s Congress session
- ICYMI, People's Bank of China open market outright reverse repo operations facility
- Weaker yen = stronger Nikkei relationship holding so far - Monday, October 28, 2024
- People's Bank of China launches monthly reverse repo oerations to ensure liqudity
- More Asia FX verbal intervention - not the yen again (South Korea)
- Boeing said to be planning a US$15bn+ capital raising - as soon as Monday
- Japanese ruling coalition loses majority in election; USD/JPY reacts with volatility
- Asia FX verbal intervention comments - not on the yen! (South Korea)
- USD/JPY hits its highest since July 31
- Oil update - Brent (futures) circa $72
- Japan’s ruling coalition lost its majority in an election - yen lower to open the week
- China's industrial profits collapse in September: -27.1% y/y (vs -17.8% y/y prior)
- Trade ideas thread - Monday, 28 October, insightful charts, technical analysis, ideas
- UK & European clocks changed over the weekend
- NZD traders heads up - New Zealand holiday today (Monday, October 28, 2024)
- ECB's Knot says mkt maybe a bit over-enthusiastic on Bank rate cuts, on Dec: "we'll see"
- Monday morning open levels - indicative forex prices - 28 October 2024 - YEN slammed lower
- USD/JPY is above 153 on the Japanese election result - yen plunge
- Israel strikes on Iran look designed to minimize the chance of retaliation
- Newsquawk Week Ahead: Highlights include US NFP, ISM Mfg, PCE, GDP, BoJ & UK Budget
- Weekly Market Outlook (28-01 November)
There were two sharp moves in Asia today:
- the yen fell with Japan's ruling party losing its majority
- oil slid on Middle East de-escalation
Since this is ForexLive, first to JPY.
USD/JPY (and yen crosses) opened higher in the very early hours of trade here in Asia. It was a holiday today in New Zealand, which is the very first major FX centre to open each week. USD/JPY was above 153.00 very quickly, chopping around there for a few hours before making its way above 153.85 where it has topped out, so far at least.
The news of note was the Japanese election. In (very) brief:
- 233 seats in the lower house of the Diet are required to form a majority
- Japan’s ruling coalition lost its majority, with the latest I have seen showing the ruling LDP with its coalition partner Komeito on a combined 215
- Most likely now is that LDP/K will bring a third party into the coalition and continue to govern
But the yen has been hit due to
- a perception that policy normalisation may face political pressure to proceed more slowly. Cost-of-living pressures in Japan are an important political issue and its thought that a slowing of policy normalisation (rate hikes) may be a price extracted by a third party for agreement to support the LDP.
- straight up political instability until a new government is formed, and given a 3-way agreement now required any government will have a higher potential for instability
As a reminder, Prime Minister Shigeru Ishiba dissolved the Lower House only eight days after assuming office. Which seems was poor judgement. Can he last?
The lower yen played a role in Japanese stocks rising.
As for oil, the Israeli strikes on Iran targeted only military sites, sparing oil facilities, which allowed Iran’s oil operations to remain unaffected. That’s the very brief and simplified version of events, and very valid. Further, there are reports that Iran’s air defence is now completely compromised. Further still, the demonstrated stark reality of the huge disparity between Israeli (Western-backed) capability and Iran’s (Russia-backed) capabilities will also dissuade Iran from escalation. Oil prices were slashed on a perception that threats to supply have diminished. As I update Brent is under USD72.50.
Elsewhere in FX moves have been subdued. As I post the USD is gaining a little. EUR, AUD, GBP, CAD, NZD - all a little lower against the big dollar. ------------------
In other market news:
- Boeing is said to be planning a US$15bn+ capital raising as soon as today.
- The People’s Bank of China launched a new monthly reverse repo facility (see bullets above)
In US election news:
- The Trump campaign has faced a backlash from high-profile Puerto Ricans and other Latins, due to a comment at Trump’s New York rally from a warm up act calling Puerto Rico “literally a floating island of garbage”. With the election so close and the race so tight the risk of alienating a large swath of voters (circa 5 million people of Puerto Rican origin live on the mainland USA can vote) like this could be impactful.
- Some Republican heavyweights have taken to social media to disavow the comments in a sign of how seriously this is being taken by those in the party with nous &/or in areas with a strong Latin presence.
See bullets above for more on all of these. This article was written by Eamonn Sheridan at www.forexlive.com.
