Forex - Asia Open - Overnight Highlights


 23:37 (GMT) 14 Apr

  [Forex Highlights]

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Asia Open - Overnight Highlights (0101-KJDW-C01)

Asia Overnight Highlights - 15 April 2019

ASIA OUTLOOK

Strong Chinese money supply and credit data, and results from JP Morgan Chase, lifted equities and USD/JPY and had USTs under pressure. AUD/USD was also firm while EUR/JPY buying helped push EUR/USD above 1.13.

Majors FX Highlights

The Bloomberg dollar spot index traded with a downside bias overnight on Friday, dipping to lows of 96.745, as downbeat Michigan consumer confidence did little to support sentiment on the dollar and offset the losses against the euro and sterling. Some recovery to 96.900+ levels was however seen later in the session, but the 97 handle remained intact.

EUR/USD saw a bullish momentum from some positioning and momentum gains, and broke above 1.1300 for the first time since early March, although a return to the big figure was seen in late NY/early Asian hours this morning. GBP/USD played some catch-up in afternoon trading, but failed to hold highs above 1.31. USD/JPY was seen with an upside bent as well, breaking above 112 in late hours as risk sentiment improved with strong earnings and China credit data. AUD/USD also rallied particularly hard on the news, peaking at .7192. USD/CAD fell to 1.3330 levels as rising oil prices supported the loonie.

Majors Data Highlights

US Mar import prices at +0.6% stronger than expected with Feb revised up to 1.0% from 0.6%, gains led by rebound in energy. Eurozone industrial production dropped 0.2 per cent in February from January, reversing a revised 1.9 per cent rise a month earlier, while annually it fell 0.3 per cent. Eurozone industrial production was stronger than expected in February, falling just 0.2% after an upwardly revised January rise of 1.9%.

In the US today, Empire State manufacturing data for Apr is due and late in the day Feb TICS capital flows will be released. Voting Fed dove Evans is due to speak. No other key data on the wires today.

Emerging Asia FX Highlights

USD/Asians traded mostly lower in late NY hours as risk sentiment improved following upbeat China credit data. USD/CNY 1Y NDFs traded lower in late Asian hours after the upbeat exports and credit data supported the sentiment, which saw pair dip from 6.7650 to 6.7405 eventually in NY. USD/SGD was generally seen trading around 1.3560 earlier on Friday but dropped to 1.3525 lows as risk sentiment improved on upbeat China data in the Friday afternoon. USD/IDR 1M NDFs were seen restrained at 14273 highs in the previous week, and dropped sharply to sub-14200 levels on Friday evening, printing lows of 14173. USD/INR 1M NDFs remained above 69.500-levels Friday, shrugging off the market trend for stronger Asian currencies in late Friday hours.

Emerging Asia Data Highlights

Monetary Authority of Singapore (MAS) has maintained its exchange-rate appreciation policy on April 12. MAS now sounds more neutral than it was six months ago. This comes as Singapore's GDP growth slowed to 1.3% y/y in Q1-2019, from 1.9% in Q4-2018. China's March exports jumped by 14.2% y/y while imports fell 7.6% y/y to a wider trade surplus of USD 32.64bn. India's March CPI came broadly in-line with our expectations at 2.86% y/y, although the Feb IP slowed to a 20-month low of 0.1% y/y. China's credit growth exceeded all estimates in March after a slowdown during the Lunar New Year, signaling a further firming of the nascent economic recovery ahead. Aggregate financing was 2.86 trillion yuan ($426 billion) last month, compared with about 700 billion yuan in February. Broad M2 money supply increased 8.6 percent, the fastest pace since February 2018.

Eyes today on trade data from India and Indonesia, and India's March WPI is also due. Philippines' March remittances data may also take some focus.

OVERNIGHT NEWS HIGHLIGHTS

- US Mar import prices +0.6% vs 0.4% exp.

- US Apr preliminary Michigan CSI fell to 96.9 from 98.4 vs 98.2 exp.

- VIX index: 12.01 (-7.76%)

- Gold Spot: $1,291.02/oz (+0.05%)

- ICE Brent front contract: $71.33 ($-0.22)

- Nymex WTI front contract: $63.58 ($-0.31)

- Reuters/Jefferies Commodities Index: 188.36 (+0.55%)

- 10y UST: 2.565% (+7bp) (Asia morning)

- DJI: 26,412.30 (+1.03%); S&P: 2,907.41 (+0.66%); Nasdaq: 7,984.16 (+0.46%)

ASIA NEWS

China: China will maintain a prudent monetary policy stance this year and keep the yuan in line with fundamentals as it uses fiscal tools to spur growth, according to central bank Deputy Governor Chen Yulu. - BBG

China: The U.S. is open to facing "repercussions" if it doesn't live up to its commitments in a potential trade deal with China, Treasury Secretary Steven Mnuchin said, in a sign that the two sides are edging closer to an accord. - BBG

Indonesia: Indonesian President Joko Widodo, bidding for a second five-year term to run the world's largest Muslim-majority nation, arrived in Saudi Arabia for a minor pilgrimage to the holy city of Mecca days before the election. - BBG

India: India's central bank chief said the expansion of the world's fastest-growing major economy needs to pick up to around 8 percent to deal with poverty and other challenges. - BBG

Asia Open - Overnight Highlights (0101-KJDW-C03)

CURRENCIES

The positive bias in EUR/JPY that started in Asia continued in Europe, with EUR/JPY advancing another 50 pips from the European open and EUR/USD breaking above 1.13 for the first time since early March. The EUR/JPY strength in Asia looks to have been triggered by an M&A flow rather than any real news, and the rise in Europe consequently looks to be more about positioning and momentum than a change in market perceptions. But the EUR may also have gained some support from a Thursday report suggesting that the ECB was unlikely to embrace tiering of interest rates to moderate the impact of negative rates on Bank profitability. Eurozone industrial production was also stronger than expected in February, falling just 0.2% after an upwardly revised January rise of 1.9%.

Strong Chinese money and credit data in March helped support risk appetite, after there was little reaction to the mixed Chinese trade numbers. AUD/USD rallied particularly hard on the news, peaking at .7192, while USD/JPY also got a further boost, eventually touching above 112 in North American trade.

GBP underperformed the EUR and AUD, and EUR/GBP traded up to 0.8656, the highest since March 22. GBP/USD played some catch-up in afternoon trading, but failed to hold highs above 1.31.

Asia Open - Overnight Highlights (0101-KJDW-C04)

BONDS

USTs went into Friday looking vulnerable with longs offside and the strong China credit data followed up by JPMorgan earnings beat fueled further bailing, led by the belly as S&P broke out to fresh highs. US5s cleared the 21 Mar + yield range ceiling. A softer UoM confidence, particularly on inflation expectations, slightly stemmed the tide. 2s +3.7bps @ 2.39%, 5s +6.3bps @ 2.37%, 10s +6.1bps @ 2.56%, 30s +4.4bps @ 2.97%.

Agency Spreads: Freddie/Fannie 5s -0.4/-0.7 bps, 10s -1.9/+1.0 bps.

Swap Spreads: 2s +1.28bps, 5s +0.26bps, 10s +0.18bps.

EQUITIES

Strong results from JP Morgan Chase helped financials lead an equity advance, despite Wells Fargo underperforming after their results. Positive Chinese data, money supply and credit more than mixed details on the trade balance, also supported the market.

Asia Open - Overnight Highlights (0101-KJDW-C02)

ASIA CURRENCIES

USD/CNY: 1Y NDFs traded lower in late Asian hours after the upbeat exports and credit data supported the sentiment, which saw pair dip from 6.7650 to 6.7405 eventually in NY. On Friday, PBoC fixed mid-point at 6.7220 vs. previous close of 6.7190. Onshore spot USD/CNY finally broke above the 6.7200 handle, rising to 6.7233 but dropped sharply to 6.7010 in the afternoon. For USD/CNY, 6.7406 resistance should hold in the light of recent stability.

USD/CNH: Pair was held below the 6.7300 handle on Friday and saw a strong downside bias to dip to 6.7050-levels in the NY session as China credit data and a wider trade surplus supported sentiment. The range of 6.7050-6.7319 to hold.

USD/SGD: Pair was generally seen trading around 1.3560 earlier on Friday but dropped to 1.3525 lows as risk sentiment improved on upbeat China data in the Friday afternoon. MAS kept policy settings unchanged as expected by consensus expectations. Statement looked to be neutral at first glance. MAS revised down core inflation forecast by 0.5ppt. Singapore GDP softened in Q1 due to a fall in manufacturing activity. Singapore retail sales also stayed relatively weak. Watch the 1.3615 resistance for signs of more weakness.

USD/IDR: 1M NDFs were seen restrained at 14273 highs in the previous week, and dropped sharply to sub-14200 levels on Friday evening, printing lows of 14173. Onshore spot traded horizontally around 14150 earlier on Friday but a sharp drop to sub-14100 levels was seen into the close. Tensions are likely to pick up in Indonesia this week as elections approach this week. March trade data will be eyed on Monday, but expect FX markets to remain quiet. We expect some stability in the pair ahead of the elections, and key levels at 14255 and 14035 should remain intact.

USD/INR: 1M NDFs remained above 69.500-levels Friday, shrugging off the market trend for stronger Asian currencies in late Friday hours. Onshore spot traded choppily on either side of 69.2000 on Friday. Downside below 68.5000 appears shallow with voting underway. We expect some upside pressures, but the 69.8000 area should cap gains.

DATA RELEASES DUE TODAY

n/a GMT - PH: Overseas Remittances (Feb) 4cast: 3.5% y/y (Mkt: 3.5 Prev: 4.4)

n/a GMT - PH: Overseas Remittances (Feb) USD bn (Prev: 2.484)

n/a GMT - IN: Exports (Mar) 4cast: 3.0% y/y (Prev: 2.4)

n/a GMT - IN: Imports (Mar) 4cast: -7.0% y/y (Prev: -5.4)

n/a GMT - IN: Trade Balance (Mar) 4cast: -9.825USD bn (Mkt: -9.5 Prev: -9.5954)

04:00 GMT - ID: Exports (Mar) 4cast: -12.00% y/y (Prev: -11.33)

04:00 GMT - ID: Imports (Mar) 4cast: -10.50% y/y (Prev: -13.98)

04:00 GMT - ID: Trade Balance (Mar) 4cast:772 USD mn [Prev: 330]

06:30 GMT - IN: WPI (Mar) 4cast: 3.3% y/y (Mkt: 3.2 Prev: 2.93)

12:30 GMT - US: Empire State Survey (Apr) [Mkt: 6.7, Prev: 3.7]

13:00 GMT - CA: Existing Home Sales (Mar) 4cast: 4% m/m (Mkt: Prev: -9.1)

20:00 GMT - US: Net Long-term TICS Flows (Feb) USD bn (Prev: -7.2)

EVENTS & AUCTIONS

- US: Fed's Rosengren speaks in Davidson, NC

- 10:45 GMT - UK: BoE's Breeden speaks in London

- 14:30 GMT - CA: BoC Business Outlook Survey

- 15:30 GMT - US: 3mth Bills Auction

- 15:30 GMT - US: 6mth Bills Auction

- 16:00 GMT - UK: BoE's Haskel speaks in London

- 17:00 GMT - US: Fed's Evans speaks

- 17:30 GMT - EU: ECB's Villeroy speaks in New York


Forex - Asia Close Highlights


 09:04 (GMT) 11 Apr

 [Forex Highlights]

11 April 2019

Regional Backdrop:

Another mixed day for Asian currencies. Indian Rupee gained as voting began for some of the seats as the country started the first phase of general election, the currency is up by 0.32% against the greenback. The Philippines peso followed, in mild gains of 0.13%. China PPI rebounded slightly on recovering commodity prices, while CPI went up on base effects. These had muted impact on the currencies CNY, CNH. Malaysian Ringgit continued to be under pressure as weaker factory output data added to recent woes, it's down by 0.16% against the dollar. Singapore dollar in mild losses ahead of MAS decision on Friday. Other currencies including THB, KRW, TWD, HKD were stable.

USD/CNH has remained relatively horizontal moving after coming off a 6.7263 high a day earlier. Pair last elevated at 6.7236. China inflation and PPI both rebounded, and this is supportive of fundamentals. We also expect a rebound in trade data on Friday.
PBoC fixed mid-point at 6.7088 vs. previous close of 6.7158. USD/CNY gapped lower and was last up to 6.7158. 1Y NDFs remains relatively quiet, last at 6.7595.

USD/SGD saw a rebound after being on an offered tone on Wednesday. Pair last at 1.3535, and SGD NEER estimated 1.843% above midpoint. Focus on Friday's MAS decision and GDP print. Markets and us do not expect further MAS tightening, so any MAS tightening move should move pair downwards. We still believe MAS will unlikely turn dovish, hence upward moves should be limited. A poor GDP print may trigger some SGD weakness.

USD/IDR onshore spot continued to trade around the recent levels, despite gapping lower to open at 14140 on Thursday vs. previous close of 14153. Pair was lifted above 14150 soon after the open, and traded sideways thereafter. Asia FX volumes remained scanty as well as the focus remains on the comments from IMF meetings after the global growth forecasts were slashed. Eyes also domestically on election results as risk of tensions is going up.

USD/INR onshore spot held on to Wednesday's gains as it mostly remained below 69.2000 in early trading on Thursday. The 69 handle was also broken in the afternoon and pair dropped to WTD lows of 68.9000 until last look. Voting began for some of the seats, and range trading remains to be the most likely scenario now as foreign investors remain wary of entering into new positions.

Market Psychology

USD/CNH - Given the stability, expect range of 6.7050-6.7319 to hold unless unexpected news on trade crop up. USD/CNY, 6.7406 resistance should hold in the light of recent stability.

USD/SGD - Resistance of 1.3575 is likely to hold, as markets anticipate the decision.

USD/IDR - We expect upmoves towards 14300 to return despite some intervention, as election uncertainties peak this month.

USD/INR - Gains above the 69 handle remain transient, but we see limited downside below 68.5000.


Forex - Asia Close Highlights


 09:04 (GMT) 11 Apr

 [Forex Highlights]

11 April 2019

Regional Backdrop:

Another mixed day for Asian currencies. Indian Rupee gained as voting began for some of the seats as the country started the first phase of general election, the currency is up by 0.32% against the greenback. The Philippines peso followed, in mild gains of 0.13%. China PPI rebounded slightly on recovering commodity prices, while CPI went up on base effects. These had muted impact on the currencies CNY, CNH. Malaysian Ringgit continued to be under pressure as weaker factory output data added to recent woes, it's down by 0.16% against the dollar. Singapore dollar in mild losses ahead of MAS decision on Friday. Other currencies including THB, KRW, TWD, HKD were stable.

USD/CNH has remained relatively horizontal moving after coming off a 6.7263 high a day earlier. Pair last elevated at 6.7236. China inflation and PPI both rebounded, and this is supportive of fundamentals. We also expect a rebound in trade data on Friday.
PBoC fixed mid-point at 6.7088 vs. previous close of 6.7158. USD/CNY gapped lower and was last up to 6.7158. 1Y NDFs remains relatively quiet, last at 6.7595.

USD/SGD saw a rebound after being on an offered tone on Wednesday. Pair last at 1.3535, and SGD NEER estimated 1.843% above midpoint. Focus on Friday's MAS decision and GDP print. Markets and us do not expect further MAS tightening, so any MAS tightening move should move pair downwards. We still believe MAS will unlikely turn dovish, hence upward moves should be limited. A poor GDP print may trigger some SGD weakness.

USD/IDR onshore spot continued to trade around the recent levels, despite gapping lower to open at 14140 on Thursday vs. previous close of 14153. Pair was lifted above 14150 soon after the open, and traded sideways thereafter. Asia FX volumes remained scanty as well as the focus remains on the comments from IMF meetings after the global growth forecasts were slashed. Eyes also domestically on election results as risk of tensions is going up.

USD/INR onshore spot held on to Wednesday's gains as it mostly remained below 69.2000 in early trading on Thursday. The 69 handle was also broken in the afternoon and pair dropped to WTD lows of 68.9000 until last look. Voting began for some of the seats, and range trading remains to be the most likely scenario now as foreign investors remain wary of entering into new positions.

Market Psychology

USD/CNH - Given the stability, expect range of 6.7050-6.7319 to hold unless unexpected news on trade crop up. USD/CNY, 6.7406 resistance should hold in the light of recent stability.

USD/SGD - Resistance of 1.3575 is likely to hold, as markets anticipate the decision.

USD/IDR - We expect upmoves towards 14300 to return despite some intervention, as election uncertainties peak this month.

USD/INR - Gains above the 69 handle remain transient, but we see limited downside below 68.5000.


Forex - Asia Close Highlights


 09:04 (GMT) 11 Apr

 [Forex Highlights]

11 April 2019

Regional Backdrop:

Another mixed day for Asian currencies. Indian Rupee gained as voting began for some of the seats as the country started the first phase of general election, the currency is up by 0.32% against the greenback. The Philippines peso followed, in mild gains of 0.13%. China PPI rebounded slightly on recovering commodity prices, while CPI went up on base effects. These had muted impact on the currencies CNY, CNH. Malaysian Ringgit continued to be under pressure as weaker factory output data added to recent woes, it's down by 0.16% against the dollar. Singapore dollar in mild losses ahead of MAS decision on Friday. Other currencies including THB, KRW, TWD, HKD were stable.

USD/CNH has remained relatively horizontal moving after coming off a 6.7263 high a day earlier. Pair last elevated at 6.7236. China inflation and PPI both rebounded, and this is supportive of fundamentals. We also expect a rebound in trade data on Friday.
PBoC fixed mid-point at 6.7088 vs. previous close of 6.7158. USD/CNY gapped lower and was last up to 6.7158. 1Y NDFs remains relatively quiet, last at 6.7595.

USD/SGD saw a rebound after being on an offered tone on Wednesday. Pair last at 1.3535, and SGD NEER estimated 1.843% above midpoint. Focus on Friday's MAS decision and GDP print. Markets and us do not expect further MAS tightening, so any MAS tightening move should move pair downwards. We still believe MAS will unlikely turn dovish, hence upward moves should be limited. A poor GDP print may trigger some SGD weakness.

USD/IDR onshore spot continued to trade around the recent levels, despite gapping lower to open at 14140 on Thursday vs. previous close of 14153. Pair was lifted above 14150 soon after the open, and traded sideways thereafter. Asia FX volumes remained scanty as well as the focus remains on the comments from IMF meetings after the global growth forecasts were slashed. Eyes also domestically on election results as risk of tensions is going up.

USD/INR onshore spot held on to Wednesday's gains as it mostly remained below 69.2000 in early trading on Thursday. The 69 handle was also broken in the afternoon and pair dropped to WTD lows of 68.9000 until last look. Voting began for some of the seats, and range trading remains to be the most likely scenario now as foreign investors remain wary of entering into new positions.

Market Psychology

USD/CNH - Given the stability, expect range of 6.7050-6.7319 to hold unless unexpected news on trade crop up. USD/CNY, 6.7406 resistance should hold in the light of recent stability.

USD/SGD - Resistance of 1.3575 is likely to hold, as markets anticipate the decision.

USD/IDR - We expect upmoves towards 14300 to return despite some intervention, as election uncertainties peak this month.

USD/INR - Gains above the 69 handle remain transient, but we see limited downside below 68.5000.


Forex - Asia Close Highlights


 09:04 (GMT) 11 Apr

 [Forex Highlights]

11 April 2019

Regional Backdrop:

Another mixed day for Asian currencies. Indian Rupee gained as voting began for some of the seats as the country started the first phase of general election, the currency is up by 0.32% against the greenback. The Philippines peso followed, in mild gains of 0.13%. China PPI rebounded slightly on recovering commodity prices, while CPI went up on base effects. These had muted impact on the currencies CNY, CNH. Malaysian Ringgit continued to be under pressure as weaker factory output data added to recent woes, it's down by 0.16% against the dollar. Singapore dollar in mild losses ahead of MAS decision on Friday. Other currencies including THB, KRW, TWD, HKD were stable.

USD/CNH has remained relatively horizontal moving after coming off a 6.7263 high a day earlier. Pair last elevated at 6.7236. China inflation and PPI both rebounded, and this is supportive of fundamentals. We also expect a rebound in trade data on Friday.
PBoC fixed mid-point at 6.7088 vs. previous close of 6.7158. USD/CNY gapped lower and was last up to 6.7158. 1Y NDFs remains relatively quiet, last at 6.7595.

USD/SGD saw a rebound after being on an offered tone on Wednesday. Pair last at 1.3535, and SGD NEER estimated 1.843% above midpoint. Focus on Friday's MAS decision and GDP print. Markets and us do not expect further MAS tightening, so any MAS tightening move should move pair downwards. We still believe MAS will unlikely turn dovish, hence upward moves should be limited. A poor GDP print may trigger some SGD weakness.

USD/IDR onshore spot continued to trade around the recent levels, despite gapping lower to open at 14140 on Thursday vs. previous close of 14153. Pair was lifted above 14150 soon after the open, and traded sideways thereafter. Asia FX volumes remained scanty as well as the focus remains on the comments from IMF meetings after the global growth forecasts were slashed. Eyes also domestically on election results as risk of tensions is going up.

USD/INR onshore spot held on to Wednesday's gains as it mostly remained below 69.2000 in early trading on Thursday. The 69 handle was also broken in the afternoon and pair dropped to WTD lows of 68.9000 until last look. Voting began for some of the seats, and range trading remains to be the most likely scenario now as foreign investors remain wary of entering into new positions.

Market Psychology

USD/CNH - Given the stability, expect range of 6.7050-6.7319 to hold unless unexpected news on trade crop up. USD/CNY, 6.7406 resistance should hold in the light of recent stability.

USD/SGD - Resistance of 1.3575 is likely to hold, as markets anticipate the decision.

USD/IDR - We expect upmoves towards 14300 to return despite some intervention, as election uncertainties peak this month.

USD/INR - Gains above the 69 handle remain transient, but we see limited downside below 68.5000.


Forex - China PPI rebounded slightly on recovering commodity prices, while CPI went up on base effects


 01:41 (GMT) 11 Apr

 [Economic Data]

China inflation rebounded to 2.3% y/y on base effects. Inflation fell 0.4% m/m terms. This was due to changing base effects for food. Food inflation rose 4.1% y/y from 0.7% prior. Meanwhile inflation ex food and energy remains relatively stable at 1.8% y/y for the second consecutive month. Food and energy inflation is set to pose upside risk to inflation in the coming months.

Factory prices PPI rose 0.4% y/y from 0.1% prior. This signalled at a recovery in commodity prices and should alleviate fears of deflationary factory prices which can weigh on GDP growth.


Forex - Asia Open - Overnight Highlights


 00:18 (GMT) 03 Apr

 [Forex Highlights]

Asia Overnight Highlights - 03 April 2019

ASIA OUTLOOK

In a mostly quiet session the GBP saw a bounce as PM May offered to talk with opposition leader Corbyn to attempt to find a Brexit deal. Bonds were mostly firm, particularly in Canada, which weighed on the CAD.

Majors FX Highlights

The USD maintained a firm tone. UISD/JPY traded in a tight range between 110.25 and 110.45, with the 200dma capping gains. EUR/USD fell below 1.12 in North America, before a bounce to a brief high of 1.1218, led by the GBP. GBP/USD finished the European morning little changed after an early dip as the market digested Monday night's developments. A bounce started ahead of a statement from PM May after a lengthy cabinet meeting, and extended to 1.3150 as she offered to try to get a deal with opposition leader Corbyn for an orderly Brexit. GBP was the strongest G10 currency on Tuesday. USD/CAD rose to 1.3374 as Canadian bonds yields fell, outperforming other bond markets, after late Monday comments from BoC Governor Poloz, downplaying the importance of the neutral rate. With oil firmer, the CAD later recovered somewhat. AUD slipping ahead of retail sales and trade data. AUD/USD approaching the lows on Tuesday.

Majors Data Highlights

Feb U.S. durable goods orders deliver a near consensus outcome of -1.6%, +0.1% ex transport. Transport saw a weak month as expected and that is likely to persist into Q2 given the problems at Boeing (not the cause of the Feb drop). Underlying trend ex transport remains near flat. Non-defense capital ex aircraft orders -0.1%, shipments unchanged.

In the day ahead, Australia retail sales and trade balance due on Thursday will pose no threat to the upside of the 0.7057/0.7168 range as these data are unlikely to dampen market expectations for RBA rate cut. We expect retail sales to improve and see a rise to 0.4% m/m in February from 0.1% m/m in January. Trade balance is expected to see a slight fall to A$4005m in February from A$4549m in January. Both are on the higher side of estimates but will at best trigger a modest reaction on the AUD if we are correct.

Emerging Asia FX Highlights

USD/Asians traded mixed overnight on Tuesday.USD/CNY: 1Y NDFs traded with an upside bias on Tuesday and nudged higher to 6.7650 at last sight. USD/SGD edged higher to 1.3570 overnight, however, further gains were capped and the pair retreated to 1.3550 at last look. USD/IDR: 1M NDFs crept up higher and traded on either side of 14300 on Tuesday. USD/INR: 1M NDFs dropped from 69.700+ to 69.300 overnight.

Emerging Asia Data Highlights

South Korea's March headline inflation slowed to 0.4% y/y (prior 0.5% y/y), lowest since July 2016. Despite higher oil prices in March, falling transport (-3.6% y/y) and communication (-2.4% y/y) prices continue to weigh down on inflation. India Nikkei manufacturing PMI eased slightly to 52.6 in March from 54.3 prior.

Data calendar remains thin in the day ahead, with only Singapore manufacturing PMI due.

OVERNIGHT NEWS HIGHLIGHTS

- US Feb durable goods orders -1.6% vs -1.8% exp, ex transport +0.1% as exp.

- VIX index: 13.36 (-0.30%)

- Gold Spot: $1,291.46/oz (-0.08%)

- ICE Brent front contract: $69.45 (+$0.08)

- Nymex WTI front contract: $62.49 ($-0.09)

- Reuters/Jefferies Commodities Index: 186.37 (+0.49%)

- 10y UST: 2.472% (0bp) (Asia morning)

- DJI: 26,179.13 (-0.30%); S&P: 2,867.24 (+0.00%); Nasdaq: 7,848.69 (+0.25%)

ASIA NEWS

China: China's Brightening Economy Calls PBOC Easing Path Into Question.- BBG

India: RBI May Consider Tailor-Made Rules for Loan Defaults: Chaturvedi.- BBG

CURRENCIES

The USD maintained a firm tone through a generally quiet European morning, pressing resistance at 111.40 in USD/JPY and support below 1.12 in EUR/USD. EUR/USD fell below 1.12 in North America, before a bounce to a brief high of 1.1218, led by the GBP. USD/JPY dipped to 111.24 as equities and UST yields edged lower, but quickly recovered.

GBP/USD finished the European morning little changed after an early dip as the market digested Monday night's developments. A bounce started ahead of a statement from PM May after a lengthy cabinet meeting, and extended to 1.3131 as she offered to try to get a deal with opposition leader Corbyn for an orderly Brexit.

USD/CAD rose to 1.3374 as Canadian bonds yields fell, outperforming other bond markets, after late Monday comments from BoC Governor Poloz, downplaying the importance of the neutral rate. With oil firmer, the CAD later recovered somewhat.

Data was thin on the ground. UK construction PMI came in slightly on the weak side of expectations, but produced no significant reaction. Swiss CPI came in slightly above expectations at 0.7% y/y, while Eurozone PPI was marginally lower than expected at 3.0% y/y. US durable goods orders were in line with expectations. The underlying trend is flat.

BONDS

Capping overnight at 2.50% on 10s, amid the renewed Brexit angst and reflection on unimpressive global numbers outside of the last China and US manufacturing bounces, enough to keep USTs checked after Monday's sharp correction. Action very limited on the day though as undecided consolidation sets in. 2s -2.8bps @ 2.30%, 5s -3.5bps @ 2.29%, 10s -2.5bps @ 2.48%, 30s -0.8bps @ 2.88%.

Agency Spreads: Freddie/Fannie 5s -0.4/+0.4 bps, 10s +1.2/-0.6 bps.

Swap Spreads: 2s +0.38bps, 5s -0.33bps, 10s -1.08bps.

EQUITIES

Equities saw a quiet day with early losses contained, helped by a GBP bounce on UK PM May's statement. Despite gains in the oil price, energy, alongside consumer staples, was one of the main drags.

ASIA CURRENCIES

USD/CNY: 1Y NDFs traded with an upside bias on Tuesday and nudged higher to 6.7650 at last sight. On Tuesday, PBoC fixed mid-point at 6.7161 vs. previous close of 6.7125. Onshore spot USD/CNY traded on either side of 6.7200. Eyes on 6.7000. Should the significant support handle of 6.6691 breaks, move towards 6.6000 big figure likely.

USD/CNH: pair saw modest gains into NY session and briefly attempted 6.7300 handle, before easing slightly to 6.7260 into early Asian session at last look. The movement of the pair still hinges on the progress of the U.S. -China trade talks. Eyes on 6.7000 psychological handle.

USD/SGD edged higher to 1.3570 overnight, however, further gains were capped and the pair retreated to 1.3550 at last look. Pair remains trading on the upside and may eye the 1.3575 resistance. If broken, will turn our attention to the 1.3600 big figure next.

USD/IDR: 1M NDFs crept up higher and traded on either side of 14300 on Tuesday. The onshore spot continued to trade in a tight range on Tuesday. The pair gapped a notch lower to open at 14220 on Tuesday vs. last close of 14225, and traded between 14220- 14240 during the day. The 14000 handle should continue to remain safe, and we expect further upmoves towards 14300 despite some intervention. USD/IDR onshore markets will be closed on Wednesday for market holiday.

USD/INR: 1M NDFs dropped from 69.700+ to 69.300 overnight. Onshore spot gapped higher to open at 69.2700 on Tuesday vs. previous close of 69.1500 on Tuesday. The pair traded with an overall downside bias, and plunged below 69.000 big figure just before market close. The RBI announced a second forex swap ahead of monetary policy meeting on Thursday, and Indian bonds rallied. Eyes on the strong support at 68.2600.

DATA RELEASES DUE TODAY

-00:00 GMT - NZ: ANZ Commodity Price (Mar) [Prev: 2.8]

-00:30 GMT - JP: Composite PMI (Mar) 4cast: (Mkt: Prev: 50.7)

-00:30 GMT - JP: Services PMI (Mar) 4cast: (Mkt: Prev: 52.3)

-00:30 GMT - AU: Retail Sales (Feb) 4cast: 0.4% m/m (Mkt: 0.3 Prev: 0.1)

-00:30 GMT - AU: Trade Balance (Feb) 4cast: 4005AUD mn (Mkt: 3700 Prev: 4549)

-08:00 GMT - EU: Composite PMI (Mar F) 4cast: index (Mkt: 51.3 Prev: 51.3)

-08:00 GMT - EU: Services PMI (Mar F) 4cast: index (Mkt: 52.7 Prev: 52.7)

-08:30 GMT - UK: CIPS / Markit Services PMI (Mar) 4cast: 50.5index (Mkt: 51 Prev: 51.3)

-09:00 GMT - EU: Retail Sales (Feb) 4cast: % m/m (Mkt: 0.3 Prev: 1.3)

-09:00 GMT - EU: Retail Sales (Feb) 4cast: % y/y (Mkt: 2.3 Prev: 2.2)

-12:15 GMT - US: ADP Employment Survey (Mar) 4cast: 150k (Mkt: 180 Prev: 183)

-14:00 GMT - US: ISM Non-Manufacturing (Mar) 4cast:56.5 index [Mkt: 58, Prev: 59.7]

-14:00 GMT - SG: PMI Manufacturing (Mar) 4cast: 50.5index (Mkt: Prev: 52.7)

EVENTS & AUCTIONS

- ID: Market Holiday - Isra Mihraj Nabi Muhammad

- 02:00 GMT - TH: Bank of Thailand's MPC Minutes

- 04:30 GMT - JP: 3mth Bills Auction


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