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ForexLive News FX Asia Pacific: China plans to buy ‘millions of unsold homes’

  • Federal Reserve speakers on Wednesday, May 15, 2024 include Barr, Kashkari and Bowman.
  • Reserve Bank of New Zealand monetary policy meeting preview – expectation expected
  • RBA Deputy Governor (Economic) Hunter to speak on housing on Thursday (Sydney time)
  • AUD/USD continues to gain following announcement from China of plans to purchase millions of unsold homes
  • Chinese government plans to buy unsold houses to reduce oversupply
  • The US CPI is due on Wednesday. Here are the estimate ranges (and why it’s crucial to know them).
  • Australia data – Wage price index for the first quarter of 2024: +0.8% q/q (expected +0.9%)
  • People’s Bank of China 125 billion yuan one-year medium-term loan facility (MLF), 2.5%
  • The People’s Bank of China today sets the USD/CNY midpoint at 7.1049 (vs. estimate of 7.2279).
  • More from the Fed’s Schmid: I don’t think we should have slowed the pace of b/s flight
  • OpenAI co-founder Ilya Sutskever leaves the company
  • Fed’s Schmid says inflation is still too high and Fed still has work to do
  • Goldman Sachs on Rising US Debt: Both Sides Need “More Discipline in Fiscal Spending”
  • Asian holiday markets today, Wednesday May 15, 2024 – Hong Kong closed
  • Royal Bank of Canada cuts its forecast for the Canadian dollar
  • TD Previews US CPI Report Due Wednesday
  • Yellen says new tariffs on China won’t lead to significant U.S. price hikes
  • Bank of America’s headline CPI forecast for April is 0.33% month-on-month and 3.4% year-over-year
  • What will the S&P 500 do with the US CPI report? Scenarios.
  • Forexlive Americas FX News Summary: PPI Offers Fake Head
  • Fed’s Mester says reluctant to consider interest rate hike
  • Private investigation into oil stocks reveals higher-than-expected crude consumption
  • North Korea laundered $147.5 million in stolen crypto in March
  • Nasdaq closes at new record
  • Trade Ideas Thread – Wednesday, May 15, Insightful Charts, Technical Analysis, Ideas

It was a waiting session for U.S. inflation data due later Wednesday until news broke from China that the State Council is considering a proposal for local governments to across the country are buying millions of unsold homes in an effort to further help populations in dire need. real estate market. Unsold homes constitute a huge glut on the market and constitute what might be considered “toxic assets,” ripe for a relief program. The plan is reportedly still in its early stages.

For FX, the news meant an offer on the Australian dollar, a “China-proxy” transaction, as well as the yuan. Forex also gained more broadly against the dollar.

Earlier in the session we got quite a bit of information, none of which had much impact.

Kansas City Federal Reserve President Jeffrey Schmid spoke, confirming the Federal Reserve’s current position of keeping rates higher for longer due to “more work” to be done on inflation . Loretta Mester, president and CEO of the Federal Reserve Bank’s Cleveland branch, made similar comments in an interview with the Wall Street Journal, saying it was appropriate for the Fed to hold rates steady while awaiting evidence that Price pressures are easing further.

The People’s Bank of China left its policy rate, the medium-term lending facility (MLF), unchanged when rolling over maturing medium-term loans, in line with market expectations. The rate was kept at 2.5%, with 125 billion yuan in one-year MLF loans to replace the 125 billion expiring this month. On Monday, the Bank will set the Loan Prime Rate (LPR). An unchanged MLF rate strongly suggests unchanged LPR rates, although this is not always the case (see the MLF article linked above for more on this).

Wage growth data for the first quarter of 2024 comes from Australia. This was slightly below expectations, as well as the previous quarter, and the first decline since the worst of the pandemic.

USD/JPY was moderate today. He only maintained a small range. We have been spared the usual ineffective rhetoric from Japanese officials.

The offshore yuan gained thanks to the plan to buy back Chinese assets in difficulty (unsold houses!):


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