Monday’s trading again this year takes place without Japan – all due to the celebration of seijin no hi – adult day during which has place a ceremony of reaching maturity (established in 1948). In addition after weekend on the markets we see some of the strongest declines of yuan in more than half a year.
20-year-olds come into adulthood
For 17 years adults day is a moveable feast which happens on the second Monday of January. Young people, who after April 2nd of previous year reached age of 20 or will exceed this limit until April 1 of the current year are required to attend their home, where they take part in special ceremonies. During it they wear traditional costumes, they are informed about the responsibilities of a mature man, and the whole is endowed with ceremonies in the temples.
From the age of 20 the average Japanese person can officially participate in political life and legally purchase alcohol or tobacco. Today, it is therefore official date of entry into adulthood and is celebrated like 18th birthday in Poland.
USD/JPY starts Monday’s session with small bullish gap and practically all the time climbs up. The last hours brought a correction of about 20 pips but still a lot missing to fill the gap:
The strongest decline of yuan since June 2016
According to information provided by the Chinese FXTS central parity rate of the yuan weaken to the US dollar by almost 600 basis points, which is the strongest depreciation since June 2016. Currency recorded a dynamic decline, most dynamic since October 2015, increasing concerns about the market, but economists have so far ruled out the possibility of maintaining such a state of things in the current year.
On the spot market, the Chinese yuan can rise or sink to about 2 percent of that rate parity set by the central supervisor – in other cases are taken direct market interventions. Indicator works on the basis of the weighted average prices offered by market makers before the opening of the interbank market in each successive day.
Strong data from Australia, mixed from Germany
So far, markets received only two macroeconomic publications. About 01:30 our time Australia shared indicator building permits MoM in November. After a weak October, the dynamics clearly reflected upwards to + 7.0% (forecast 4.6%, previous -11.8% after revising upward).
During the European morning there were readings from Germany. About 08:00 we got to know the results of industrial production for November MoM (0.4% vs. 0.6%, previous 0.5% growth after revisions) and the trade balance (21.7 billion forecast, 21.2 billion, previously 20.6 billion after the upward revision).