ForexLive Asia-Pacific FX news wrap: China rate setting and data dump

• Federal Reserve speakers Monday include Williams, Harker and Cook
• European Central Bank President Lagarde and chief economist Lane speaking on Monday
• Australian jobs data (May) – ANZ private survey -2.1% m/m and -18.1% y/y
• Diary note – Bank of Japan Governor Ueda to appear in parliament Monday and Tuesday
• China interest rate cuts face internal and external constraints
• China May Industrial output +5.6% y/y (expected +6.0%) Retail sales +3.7% (3.0% exp)
• China says Philippines ship has collided with a Chinese vessel in the South China Sea
• China May new home prices -0.7% m/m and -3.9% y/y
• People’s Bank of China set MLF rate at 2.5% (expected 2.5%, prior 2.5%)
• PBOC sets USD/ CNY reference rate for today at 7.1149 (vs. estimate at 7.2574)
• New Zealand Dollar forecasts revised lower
• Japan’s Cabinet Office maintains its assessment on machinery orders
• Japan Core Machinery Orders (April) -2.9% m/m (vs. expected -3.1%)
• Evercore raised year-end forecast on S&P500 Index to 6,000 (and 7000 possible by end 2025)
• Trading CME equity index futures? Don’t forget the rollover right about now.
• Reserve Bank of Australia meet Monday & Tuesday, likely cash rate hold @ 4.35%, 12 yr high
• New Zealand service PMI for May 43.0 (prior 46.6) … “Bottom of the Barrel”
• Heads up for Singapore markets closed today, Monday, 17 June 2024
• UBS says China expects an intensifying trade war if Trump wins 2024 election
• Further EUR/USD weakness – UBS on the downside levels to watch as triggers
• China regulator announces more curbs on short-selling
• ECB’s Kazaks says mustn’t allow inflation to remain above 2% into 2026
• Trade ideas thread – Monday, 17 June, insightful charts, technical analysis, ideas
• ECB policymakers have no plan to discuss emergency purchases of French bonds
• Fed’s Kashkari says its reasonable that rate cut could come in December
• Monday morning open levels – indicative forex prices – 17 June 2024

• Newsquawk Week Ahead: Highlights include BoE, SNB, US retail sales
• Weekly Market Outlook (17-21 June)
• The troll farms are winning and can’t be stopped
• Unlocking Apple’s Stock Potential: Technical Signals to Watch
• Forexlive Americas FX news wrap: European political turmoil on center stage

Weekend
news brought little of note. Minneapolis Federal Reserve President
Neel Kashkari spoke on Sunday, US time, with US media, CBS’ “Face
the Nation”. He said that its reasonable that a rate cut could
come in December (see bullets above for more from K). European
Central Bank Governing Council member Kazaks (governor of Latvia’s
central bank) said that with ECB projections of its 2% target
inflation rate only being met towards the end of 2025 that its was
important to not allow inflation to remain above target into 2026
(again, see bullets above).

During
the Tokyo morning we had Core Machinery Orders data for April from Japan.
These fell m/m, for the first time in three months, but not as much
as expected. The y/y improved. This was enough for Japan’s Cabinet
Office to say its seeing pick up moves in this data series.

It
was soon over to China for a barrage of data and events. After the
USD/CNY reference rate setting the People’s Bank of China injected
182bn yuan (vs. the 237bn maturing, and thus a 55bn yuan drain) in a
one-year Medium-term Lending Facility (MLF) at an unchanged rate of
2.5%. The unchanged rate is strongly suggestive of unchanged Loan
Prime Rates (LPR) to come from the Bank later this week, on the 20th.

Current
LPR rates are:

• 3.45%
  for the one year

• 3.95%
  for the five year

We
then had data for China’s
new home prices for
May. These fell
at their
fastest pace in more than 9 years in May.

Next
up were the figures from China
for
May
industrial output, which
fell
short of expectations.
Retail
sales, however,
beat forecasts with
sales
growing
at their
quickest since February (holiday
boost cited).
This
is a positive sign for an improvement in domestic consumption.
Fixed asset investment expanded but
poor property investment was another indication of the prolonged and ongoing property market downturn. High
property sector and local
government debt, along
with inflation only now recovering from deflation,
continues
to be a drag
on the economy.

Across
major forex rates move were very subdued. AUD/USD and NZD/USD are a
little soft, in small ranges only. USD/JPY remained fairly steady a
few points around 157.45. Bank of Japan Governor Ueda is set to appear in
the Diet (the Japanese parliament) from 0730 GMT (0330 US Eastern
time).

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