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ForexLive Asia-Pacific FX news wrap: China announces significant property sector support

  • China Dec trade USD terms: Exports -9.9% y/y (expected -10.0%) Imports -7.5% (-9.8%)
  • Fed is “almost done raising rates. Higher for longer is what people should be focused on”
  • China is taking small stakes in tech firms to tighten control over them
  • China will encourage negotiations with quality property developers on debt extension
  • Chinese state media announce a 100bn yuan housing rental loan plan, other measures
  • 8 economists will join sessions of Japan’s economic council for policy discussions
  • Statement from the Bank of Korea following today’s rate hike
  • PBOC sets USD/ CNY mid-point today at 6.7292 (vs. estimate at 6.7295)
  • BOJ announces unscheduled bond buying operation
  • Bank of Korea 25bp rate hike, as widely expected
  • Bank of Japan meet next week. Expectations are nearly unanimous for no change. But …
  • Australian housing finance (November) dribbling lower in the face of higher interest rates
  • Fed’s Bostic says would be happy to hike by 25bp if business contacts confirm slower CPI
  • Japanese Government Bond yields rising. Yield on 10 year JGB is above BOJ ceiling of 0.5%
  • FT – UK mortgage costs have risen to highest proportion of income since financial crisis
  • ICYMI – Officials in China’s Guangdong province get go-ahead to clear coal from Australia
  • Goldman Sachs – US CPI report makes a solid case for a Fed step down to 3 * 25bp hikes
  • IMF’s Georgieva says inflation remains stubborn, central banks must continue to press
  • ICYMI – BoE’s Mann says more rate hikes to come, not yet worried about over-hiking
  • ICYMI – Europe’s biggest deposit of rare earths discovered in Sweden
  • Trade ideas thread – Friday, 13 January 2023
  • Credit Suisse targets AUD/USD towards 0.7305 in Q1
  • US stocks close higher.Nasdaq up for the 5th day. S&P and Dow up for the 3rd straight day.
  • Forexlive Americas FX news wrap: US dollar crumbles after CPI

China
will loosen restrictions on Chinese developers’ financing with
changes to the “Collective management system for real estate
loans” on banks and also on the “Three Red Lines” policy.
These changes had been flagged and reported on earlier which meant
rises on Chinese stockmarkets were limited. As I update:

  • China’s
    Shanghai Composite is
    +0.5%

  • Hong
    Kong’s Hang Seng is +0.15%

China
will add another 150 bln yuan in special loans for securing project
deliveries and will issue further policies to support housing rental
market including a 100bn yuan housing rental loan plan.

In
central bank news the Bank of Japan intervened in the Japanese
Government Bond market yet again with another unscheduled purchase
operation. The Bank’s hand was forced by yields on JGBs continuing
to rise. The 10 year JGB hit 0.535%, well above the BOJ’s 0.5%
permitted ceiling.

Also,
the Bank of Korea hiked its key rate by 25bps today. This brings the
total of hikes from the South Korean central bank to 300bp (i.e. 3%)
during this cycle. There have been 10 rate hikes since beginning in
August of 2021.

Major
FX traded in limited ranges. Friday the 13th is often a
subdued day in Asia, this one especially so as traders seemed content
to drift into the weekend after expending so much energy on the US
CPI and the market response.

Not a lot of movement in USD/JPY:

This article was written by Eamonn Sheridan at www.forexlive.com.