Articles

• S&P ratings revise Australian state Queensland rating outlook to negative
• Would-be Kishida assassin gets 10 years in jail
• Federal Reserve Vice Chair Philip Jefferson is speaking after market close on Wednesday
• Goldman Sachs says OPEC+ will delay its gradual production increases from April to July
• ANZ forecast 3 25bp rate cuts from the Reserve Bank of New Zealand, in April May and July
• More on Trump’s proposed 25% tariff on automobiles, pharmaceuticals & semiconductor chips
• RBNZ Governor Orr says NZD around fair value
• J.P. Morgan upgrades Singapore equities to overweight on strong outlook, target 6% gain
• More from RBNZ Governor Orr, says 3.75% is the high end of the range of neutral rates
• RBNZ Governor Orr confirms a rate cut in April and then May sounds about right
• China’s new home prices remain stagnant in January amid property market struggles
• BOJ’s Takata says must hike rate more if economy moves in line with BOJ forecasts
• Reserve Bank of New Zealand rate cut news conference begins 0200 GMT/2100 US Eastern time
• New Bank of Japan board Junko Koeda approved by Japan’s parliament
• NZD/USD lower after the as expected 50bp rate cut from the Reserve Bank of New Zealand
• PBOC sets USD/ CNY reference rate for today at 7.1705 (vs. estimate at 7.2807)
• RBNZ cuts cash rate by 50bp vs. 50bp expected
• Mitsubishi UFJ Morgan Stanley shifted its BOJ rate hike call to July, from Q4 previously
• Bank of Japan Board Member Takata Hajime is speaking soon
• Australian data – Wage Price Index (Q4 2024 ) +0.7% q/q (expected +0.8%)
• Japan data – January exports and imports improve y/y, December machine orders improve y/y
• Reserve Bank of New Zealand expected to cut official cash rate (OCR) target by 50bp today,
• Japan manufacturing sentiment improves second consecutive month, services sector stable
• Bank of America Survey: Trade war fears rise as US equities remain overvalued
• JP Morgan on Trump’s social media activity showing diminished market-moving influence
• Trump said he may not let Venezuela export oil, petroleum products, via firms like Chevron
• Bitcoin’s Path to $500K: Institutional interest grows amid (trimmed) regulatory hopes
• New Zealand Q4 PPI falls q/q
• Trump says “will be announcing” large firms that are coming back to the US re Chips, cars
• Trade ideas thread – Wednesday, 19 February, insightful charts, technical analysis, ideas
• Forexlive Americas FX news wrap: US dollar firms and US stocks close at a record

In
late afternoon news from the US, Trump signalled he could slap a 25%
tariff on imported automobiles, especially targeting those from
Europe and Asia (China, Japan and South Korea are notable large
exporters of vehicles). A similar tariff could also hit
pharmaceuticals and semiconductor chips. Trump indicated these could
apply as soon as April 2.

Nothing
is solid on this as yet, but it does raise further trade war
implication concerns.

Trump
also said he may not let Venezuela export oil and petroleum products
via firms like Chevron.

The
main focus for the session was the Reserve Bank of New Zealand. The
Bank cut its cash rate target by 50bp, the third 50bp rate cut in a
row. Guidance was dovish, the OCR path indicating a further cut by
50bps by mid-this year. This is expected to be two 25bp cuts although
ANZ in New Zealand are expecting three 25bp cuts, one each in April,
May and July (the next three meetings, the 9th,
28th
and 9th
respectively).

The
New Zealand dollar chopped up and then down after the announcement,
settling around lows circa 0.5680 for a half hour or so before
surging back to record a new high for the session above 0.5720. There
is more on the RBNZ in the points above.

AUD/USD
followed the NZD higher.

From
Japan we had comments from Bank of Japan policy board member Takata.
He
said (in brief) that Japan’s real interest rates remain deeply
negative and are still accommodative, but:

• the
  Bank must adjust degree of monetary support further if economy moves
  in line with its forecasts,
• the
  Bank must gradually shift policy to avoid upside price risks from
  materialising.

USD/JPY
is not really net changed much at all on the day, but it did pop
briefly to just over 152.30 before coming back to lows circa
151.80.

From
China we had January home price data. New home prices recorded their
20th straight m/m % drop. 2nd hand home prices hit 21 straight falls.

Silver
fell circa 1%.

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

Australia news

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

A 25 year old male who tried to assassinate then Prime Minister Kishida back in 2023 has been found guilty.

• Sentenced to ten years in prison.
• The attack occurred in Wakayama.
• The male throwing an explosive, a home made pipe bomb at Kishida on April 15, 2023. The explosion injured two people in the crowd.
• Kishida was making a campaign stop at the Saikazaki fishing port.

Kishida was Prime Minister of Japan from 2021 to 2024.

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

Goldman Sachs:

• Says OPEC+ will delay its gradual production increases from April to
  July
• Says potential Ukraine-Russia peace deal and associated
  easing in sanctions on Russia is unlikely to raise Russia oil flows

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

Earlier headline on this:

Trump says “will be announcing” large firms that are coming back to the US re Chips, cars

More detail now:

• New U.S. Tariffs Possible by April 2 – Trump indicated that the U.S. may impose a 25% tariff on imported automobiles, along with similar duties on pharmaceuticals and semiconductor chips.

• The proposed auto tariffs mainly target imports from Europe and Asia, potentially increasing consumer prices and disrupting global supply chains. The EU is in negotiations to mitigate the impact, but Trump remains firm on enforcing fairer trade terms.

• The pharmaceutical and semiconductor sectors could also face initial 25% tariffs, which may increase over time. This move aims to encourage domestic production, but experts warn of higher costs and consumer price hikes.

• The potential tariffs have raised concerns they could fuel inflation and strain international relations.

• With the April 2 deadline approaching, analysts fear the tariffs could escalate trade tensions and derail economic stability, possibly leading to a broader trade conflict.

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

J.P. Morgan has upgraded Singapore equities to overweight, citing attractive valuations, high dividend yields, and government measures aimed at revitalizing the domestic stock market.

The move follows Singapore’s latest budget announcement, which outlined initiatives to support economic growth and investment.

In a client note, J.P. Morgan analysts set a bullish target of 4,200 for the Straits Times Index (STI), representing a potential 6% gain from current levels. The benchmark index reached a record high of 3,949.65 on Wednesday and has risen 4% so far in 2025, following a 17% surge last year driven primarily by banking stocks and optimism around market-boosting policies.

Analysts expressed confidence in the government’s strategy, stating that support for households and businesses would sustain economic activity, while investments in innovation and capital markets could unlock further growth opportunities. With improving market sentiment, Singapore’s equities may continue to benefit from both domestic and global investor interest.

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

China’s new home prices showed no change in January compared to the previous month, highlighting the ongoing difficulties in the country’s property sector despite government intervention.

According to Reuters calculations based on National Bureau of Statistics data,

• prices remained flat month-on-month, mirroring December’s result
• on a year-on-year basis, home prices declined by 5.0%, slightly improving from the 5.3% drop recorded in December.

Efforts to stabilize the market have intensified since the second half of last year, as policymakers introduced measures to support the struggling sector. The downturn, which began in 2021, was triggered by a government crackdown on excessive leverage among developers, leaving many unable to complete pre-sold projects or meet debt obligations. The resulting decline in home sales and weakened buyer confidence continues to weigh on the broader economy, underscoring the challenges in restoring stability to the real estate market.

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

Australian Wage Price Index for Q4 2024 :

+0.7% q/q, a miss but still solid growth

• expected +0.8%, prior +0.8%

+3.2% y/y, in line but down from the growth rate in Q3

• expected +3.2%, prior +3.5%

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

more to come

While Japan’s December core machinery orders improved y/y there are a few caveats to note:

• the y/y at +4.3% was a miss on the consensus estimate of +6.9%
• the -1.2% m/m was a miss on the estimate also

Admittedly this is a volatile data series.

Its regarded as a leading indicator of capital spending in the coming six to nine months.

more to come

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

Japan’s manufacturing sector showed signs of steady recovery in February, with sentiment improving for the second straight month, according to the latest Reuters Tankan survey.

• The manufacturers’ sentiment index rose to +3, up from +2 in January, marking its highest level since November.
• Further improvement is expected in the coming months, with the index projected to rise to +5 by May.

This gradual recovery has been driven by stronger sentiment in the food and chemicals industries, as firms report some relief from surging material costs and a stabilization in the yen’s depreciation. However, not all sectors shared the optimism—industries like paper, pulp, and steel continued to struggle with deteriorating sentiment.

Meanwhile, sentiment in Japan’s service sector remained strong but edged slightly lower, with the index dipping to +30 in February from +31 in January.

• This level is expected to hold steady through May.

The construction and real estate sectors saw the biggest declines, as rising labor costs squeezed profit margins. Some business leaders also voiced concerns over potential economic headwinds, including the impact of U.S. trade policy under President Donald Trump, escalating Sino-U.S. trade tensions, and uncertainty in China’s economic outlook.

The survey results align with Japan’s latest economic data, which showed the economy expanding at an annualized rate of 2.8% in the October-December quarter—outpacing expectations—driven by strong business investment and a surprising uptick in consumer spending. However, uncertainties in global trade and rising domestic costs could pose challenges in sustaining this growth momentum in the coming months.

The Reuters Tankan survey was conducted between February 4-14 by Nikkei Research

• responses from over 230 large Japanese non-financial firms

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

• Will point teams to reestablish the functionality of their missions in DC and Moscow.
• Work remains, today’s meeting is the first step of a long and difficult journey
• everyone involved in Ukraine conflict has to be okay with solution to end it
• No one is being side-lined here
• EU needs to be involved at some point

Meanwhile, US national security advisor Waltz is saying:

• There needs to be a permanent and to Ukraine war
• there will be talked about territory and security guarantees
• Trump is determined to move very quickly
• No data has been set for Trump/Putin meeting.

The meeting between Russia and the US is upsetting to the EU/Ukraine. Zelenskiy is not pleased with the negotiations starting with Russia. Meanwhile, Pres. Trump is also floating ideas of payback for US support from Ukraine as he leverages that card in his hand.

This article was written by Greg Michalowski at www.forexlive.com.

Analysts at JP Morgan say that Trump’s social media activity has
significantly declined in market-moving influence compared to his
first term.

JPM cite his 126
posts on trade and economics, saying that only 10% of them triggered
notable currency fluctuations. JPM says this is in contrast to the 60
market-moving tweets per week during the 2018-2019 trade wars.

JPM add that while
Trump’s overall market impact has faded, his tariff-related tweets
remain potentially market-moving. For example, his announcement of 25%
tariffs on Mexico and Canada led to a 2% drop in the peso and a 1%
decline in the Canadian dollar in late January. The Chinese yuan
reacted to trade threats, falling after Trump’s Fentanyl-related
tariff comments but recovering following positive remarks about a
conversation with President Xi.

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