G3 central bank meetings this week:
- The Federal Open Market Committee (FOMC) on Wednesday, the European Central Bank on Thursday, and the Bank of Japan on Friday
Put a damper on intra-session major forex volatility.
However, an announcement by the Chinese Politburo promising more support for the Chinese economy provided a regional focus. See the points above for more information on Politburo announcements (be aware that details are basically non-existent yet). In addition, the procedures should include the following:
- Addressing local debt risks through a comprehensive debt settlement plan
- Place job stability at a higher strategic level
- The real estate policy is amended immediately, replacing the previous letter “Not for speculation”.
Shares of Chinese real estate developers in Hong Kong and mainland stock exchanges rose sharply. Chinese stock markets have also rebounded more broadly.
The Yuan traded higher, supported by the strong peg of another medium rate from the People’s Bank of China (500 pips below USD/CNY estimates). The yuan also found bids from large Chinese state banks that were actively stepping in to support the yuan by selling USD/CNY and USD/CNH.
China’s proxy foreign currencies such as the Australian and New Zealand dollars also gained, but not as much as the yuan.
Asian stock markets:
-
Japan’s Nikkei 225 -0.3%
-
China Shanghai Composite +1.6%
-
Hong Kong Hang Seng +3.2%
-
Kosby in South Korea +0.1%
-
Australia S&P/ASX 200 +0.4%