Asia Market Snapshot
It was a reasonably subdued and range-bound overnight session for FX. AUD was a notable underperformer following weaker employment figures while NZD and CAD outperformed. There was ‘limited’ impact in G-10 markets to comments from EU Chamber of Commerce in China President that the CNY will achieve “full convertibility” by 2015, citing Chinese officials. 2015 is consistent with the 3-5 year horizon we expect. It is also when the IMF will next review the composition of currencies in the SDR basket. Nor was there any reaction to Fitch comments that a China downgrade is possible in 12-24 months if, as expected asset quality deterioration is seen.
AUD: The August employment report was weak. Employment fell 9,700 (cons: 10,000) driven by a 12,600 fall in fulltime employment and the unemployment rate jumped to 5.3% from 5.1% (cons: 5.1%. The domestic labour market is showing signs of softness and represents a downside risk to our view of the RBA remaining ‘on hold’ until end-2012.
It was a reasonably subdued and range-bound overnight session for FX. AUD was a notable underperformer following weaker employment figures while NZD and CAD outperformed. There was ‘limited’ impact in G-10 markets to comments from EU Chamber of Commerce in China President that the CNY will achieve “full convertibility” by 2015, citing Chinese officials. 2015 is consistent with the 3-5 year horizon we expect. It is also when the IMF will next review the composition of currencies in the SDR basket. Nor was there any reaction to Fitch comments that a China downgrade is possible in 12-24 months if, as expected asset quality deterioration is seen.
AUD: The August employment report was weak. Employment fell 9,700 (cons: 10,000) driven by a 12,600 fall in fulltime employment and the unemployment rate jumped to 5.3% from 5.1% (cons: 5.1%. The domestic labour market is showing signs of softness and represents a downside risk to our view of the RBA remaining ‘on hold’ until end-2012.
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