Tag: Chinese

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FX Week Ahead – Top 5 Events: BOE, ECB, & Fed Speeches; Chinese Manufacturing PMI; US PCE Index

FX Week Ahead - Top 5 Events: BOE, ECB, & Fed Speeches; Chinese Manufacturing PMI; US PCE Index

FX Week Ahead Overview:

  • The final week of June will have central banks, inflation data, and supply chains in focus.
  • Remarks by BOE Governor Bailey, ECB President Lagarde, and Fed Chair Powell – all at 13 GMT on Wednesday – could prove to be the biggest source of volatility all week.
  • We may be looking at the beginning of the end of supply chain concerns out of China with the upcoming release of the Chinese manufacturing PMI.

For the full week ahead, please visit the DailyFX Economic Calendar.

06/29 WEDNESDAY | 13:00 GMT | GBP Bank of England Governor Bailey Speech

At their June meeting, the BOE’s Monetary Policy Committee promised to act more “forcefully” to combat multi-decade highs in price pressures. UK rates markets have responded in kind, dragging forward rate hike odds considerably in recent weeks: there are 50-bps hikes discounted for each of the next three meetings; and the BOE’s main rate is expected to rise to 2.827%, up from 2.099% in mid-May. Should BOE Governor Andrew Bailey choose to focus on UK growth concerns, however, then some wind may get taken out of the British Pound’s sails.

06/29 WEDNESDAY | 13:00 GMT | EUR European Central Bank President Lagarde Speech

Less than a week after the June ECB policy meeting, the Governing Council reconvened in order to calm down Eurozone sovereign bond markets. Peripheral bond yields, particularly those in Greece and Italy, began to widen out rapidly versus their core (e.g. German) counterparts, rekindling fears of a revitalized Eurozone debt crisis.Yet since the ECB’s cryptic and vague remarks about preventing fragmentation in bond markets, Greek and Italian bond yields have calmed down in enough manner to keep fears at bay. If ECB President Christine Lagarde can walk the line between keeping bond markets calm and talking up the potential for rate hikes to quell rising inflation pressures, the Euro should benefit.

06/29 WEDNESDAY | 13:00 GMT | USD Federal Reserve Chair Powell Speech

Fed Chair Jerome Powell’s remarks at his Congressional testimony last week made clear that the FOMC is fully committed to bringing down inflationary pressures – even if that means a recession is a side effect. But in context of this week’s data – the June US Conference Board consumer confidence reading, the final 1Q’22 US GDP report, and the May US PCE price index – the weakness of the US economy will be on full display. With Fed rate hike odds currently receding, any hint of a ‘less hawkish’ mindset from Fed Chair Powell could further impair the US Dollar.

06/30 THURSDAY | 01:30 GMT | CNY NBS Manufacturing PMI (JUN)

The Chinese economy has been on weak footing for months, as the misguided zero-COVID strategy remains in place. According to a Bloomberg News survey, the June China NBS manufacturing PMI is expected to come in at 48.6 from 49.6, signaling a faster pace of contraction. However, with China beginning to alter its zero-COVID strategy – hinting at a lower likelihood of lockdowns amid rising economic and societal concerns – it’s possible that this print could mark the beginning of the end of supply chain concerns. Any beat, however marginal, would be a welcomed development for the embattled commodity currencies – the Australian and New Zealand Dollars in particular.

06/30 THURSDAY | 12:30 GMT | USD PCE Price Index (MAY)

The Fed’s first 75-bps rate hike since 1994 came with a caveat: aggressive rate hikes would continue until US inflation pressures begin to abate. Yet the Fed’s preferred gauge of inflation, the US PCE price index, has already started to do just that. According to a Bloomberg News survey, consensus forecasts expected the headline PCE price index to drop to +6.2% y/y in May from +6.3% y/y, while the core PCE price index is due in at +4.8% y/y from +4.9% y/y. These would be the second consecutive monthly drop for the headline reading and the third consecutive monthly drop for the core reading. Receding price pressures beget a less hawkish Fed, which is negative for the US Dollar.

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— Written by Christopher Vecchio, CFA, Senior Strategist

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Biden says US willing to respond ‘militarily’ in event of Chinese attack on Taiwan

Biden says US willing to respond 'militarily' in event of Chinese attack on Taiwan

During a joint press conference with Japanese Prime Minister Fumio Kishida in Tokyo, Biden was asked if the US would be willing to go further to help Taiwan in the event of an invasion than it did with Ukraine.

“You didn’t want to get involved in the Ukraine conflict militarily for obvious reasons. Are you willing to get involved militarily to defend Taiwan if it comes to that?” a reporter asked.

“Yes,” Biden replied. “That’s the commitment we made.”

“We agree with the One China policy. We signed on to it, and all the attendant agreements made from there, but the idea that it can be taken by force, just taken by force, is (just not) appropriate,” he said.

Under the “One China” policy, the US acknowledges China’s position that Taiwan is part of China, but has never officially recognized Beijing’s claim to the island of 23 million.

In a statement following Biden’s remarks, a White House official said the US’ official position remained unchanged. “As the President said, our policy has not changed. He reiterated our One China policy and our commitment to peace and stability across the Taiwan Strait. He also reiterated our commitment under the Taiwan Relations Act to provide Taiwan with the military means to defend itself,” the official said.

The President has made similar comments on Taiwan in the past, including during a CNN town hall in October, only to have the White House walk back his remarks and insist that longstanding US policy has not changed toward the self-governing island.

The US provides Taiwan defensive weapons, but has remained intentionally ambiguous on whether it would intervene militarily in the event of a Chinese attack.

But this time, Biden’s strong warning was made right on China’s door step, during his first trip to Asia as President — a visit aimed at uniting allies and partners to counter China’s rising influence.

It also came a day before Biden is scheduled to attend the second in-person summit of the Quadrilateral Security Dialogue (Quad) — an informal grouping between the US, Japan, Australia and India that has alarmed Beijing.

China is alarmed by the Quad, describing it as 'Asia's NATO'. It's not — but Chinese threats are driving the group closer together

Within hours, China had expressed its “strong dissatisfaction and firm opposition” to Biden’s comments, saying it will not allow any external force to interfere in its “internal affairs.”

“On issues concerning China’s sovereignty and territorial integrity and other core interests, there is no room for compromise,” said Wang Wenbin, a spokesman for the Chinese Foreign Ministry.

“We urged the US side to earnestly follow the One China principle…be cautious in words and deeds on the Taiwan issue, and not send any wrong signal to pro-Taiwan independence and separatist forces — so it won’t cause serious damage to the situation across the Taiwan Strait and China-US relations.”

Taiwan lies fewer than 110 miles (177 kilometers) off the coast of China. For more than 70 years the two sides have been governed separately, but that hasn’t stopped China’s ruling Communist Party from claiming the island as its own — despite having never controlled it.

Chinese leader Xi Jinping has said that “reunification” between China and Taiwan is inevitable and refused to rule out the use of force. Tensions between Beijing and Taipei are at the highest they’ve been in recent decades, with the Chinese military sending record numbers of war planes near the island.

Biden compared a potential invasion of Taiwan by China to Russia’s invasion of Ukraine earlier this year, warning, “It will dislocate the entire region,” and emphasizing “Russia has to pay a long-term price for its actions.”

5 Asian military hotspots and how they play into Biden's visit

“And the reason I bother to say this, not just about Ukraine — if in fact after all he’s done, there’s a rapprochement…between the Ukrainians and Russia, and these sanctions are not continued to be sustained in many ways, then what signal does that send to China about the cost of attempting, attempting to take Taiwan by force?”

Biden said that China is “already flirting with danger right now by flying so close and all the maneuvers they’re undertaking.”

“But the United States is committed, we made a commitment, we support the One China policy, we support all we’ve done in the past, but that does not mean, it does not mean that China has the ability, has the, excuse me, jurisdiction to go in and use force to take over Taiwan,” he added.

At the press conference, Kishida also reaffirmed the importance of peace and stability in the Taiwan Strait.

“Attempts to change the status quo by force, like Russia’s aggression against Ukraine, should never be tolerated in the Indo-Pacific, above all, in East Asia,” he said.

“As the regional security environment becomes increasingly severe, I reaffirmed with President Biden that we need to speedily strengthen the deterrence and response of the Japan-US alliance,” he said, adding that he conveyed his determination to “fundamentally strengthen Japan’s defense capability.”

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Fun events happening at Dr. Sun Yat-Sen Chinese Garden in May

Fun events happening at Dr. Sun Yat-Sen Chinese Garden in May

Celebrate and learn Chinese traditions at the Classical Chinese Garden.

Vancouver’s Classical Chinese Garden offers a serene escape from the city.

The traditional-style gardens are just as fascinating as the garden’s history but also hosts a number of fun events that celebrate and educate on Chinese traditions. 

Here are some events you can find at the garden in May!

Eating for the seasons with Kyth + Kyn

This workshop dives in Chinese Medicine food therapy, teaching you how to incorporate Chinese herbs into your diet to optimize your health and focusing on Springtime ingredients. You’ll also get to try a recipe using Chinese herbs that can be easily made at home. 

When: May 21 from 11 a.m. to noon

Cost: $15-20

Enchanted Evenings 

This evening event will transform the garden into an interactive event titled “Feels Like Home,” complete with Hong Kong street food, live and improvised poetry, and a musical performance at sunset.

When: May 20 from 6:30-9:30 p.m.

Cost: $24-35

Art Class

Find your inner artist using acrylic colours in this 90-minute art class. The theme for this month’s class is ‘Panda and Bamboo’!

When: May 28 from 10-11:30 a.m.

Cost: $40-125

Tea Appreciation Workshop

An intimate workshop where you will learn about tea tasting, aesthetics and tea etiquette while sipping on specially-curated teas. The workshop is led by Lillian Li, an in-house tea artist and senior trainer of the traditional Chinese tea ceremony. 

When: May 29 from noon-1 p.m.

Cost: $15-20