Asia-Pacific TP news wrap: China property worries return

Asia-Pacific TP news wrap: China property worries return
  • Monday, 25 September 2023 | 3:41 GMT

Forex news for Asian trading on Sep 24, 2023

Markets:

  • Gold down $2 to $1923
  • WTI crude oil up $0.11 to $90.14
  • S&P 500 futures up 11 points
  • Nikkei 225 down 0.5%
  • JPY leads, AUD lags

The beginning of the new week has seen a cautious shift towards risk aversion, which has intensified in the last hour. The AUD/USD currency pair has experienced a decline, dropping from an early level of 0.6446 to 0.6427. This decline is attributed to concerns regarding a potential resurgence in the Chinese real estate market. There are growing apprehensions that the restructuring of Evergrande is encountering difficulties, with bondholders expressing reluctance towards the proposed terms of adjustment. In response to this development, Chinese real estate stocks have recorded a 2.5% decline, driven by fears of contagion.

Thus far, the movements in other foreign exchange markets have been relatively unremarkable. The focus is squarely on the USD/JPY pair, which managed to surpass last week’s high, albeit by a mere one-pip margin. Subsequently, it has retraced slightly from those highs but remains within a dozen pips of that level. There’s a prevailing sense that the market may be on the brink of triggering stop orders, but it appears prudent to monitor Treasury market performance first. Early indicators are pointing towards higher yields at the long end of the yield curve, which could pose challenges for the Ministry of Finance.

The week began with some upward momentum in the oil market, but those gains have largely dissipated. Attention is now turning to the product sector, particularly due to Russia’s decision to halt diesel exports indefinitely.

Later today, we anticipate the release of the German IFO report, though it’s a relatively quiet day for U.S. traders. It’s worth noting that we are approaching the end of the quarter, so substantial flows related to quarter-end adjustments could potentially have a more significant impact as we approach month-end.

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