Forex - Asia Highlights - Wednesday, 5 December 2018


 05:32 (GMT) 05 Dec

  [Forex Highlights]

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Asia Highlights - Wednesday, 5 December 2018 (0101-GMJD-C01)

US Overview:

Equities plunged on trade and Brexit worries while a sharp flattening in USTs as long end yields plunged and equity losses fed off each other. The USD saw early losses versus Europeans erased and advanced versus the commodity currencies. USD/JPY saw only a modest extension of its early losses despite the sharp slides in equity and UST yields.

US Highlights:

- Fed's Williams said continues to expect gradual increases in rates, expects strong 2019 GDP of 2.5%, inflation a bit above 2%.

Currencies:
An opinion, not a ruling, from the EU Court's Advocate General that the UK can revoke Article 50 unilaterally saw EUR/GBP reverse the break above .8940, down to a .8887 low, while Cable extended its gain to 1.2840. A turnaround however followed with the UK parliament ruling the government in contempt, forcing it to agree to release Brexit legal advice. Cable saw a low of 1.2657, and EUR/GBP losses were erased, before another defeat for the UK government, this time giving parliament a say in a plan B should May's Brexit deal fail, saw the GBP edge off its lows.
A softer USD in Europe saw EUR/USD trade above 1.1400 and USD/JPY below 113.00. The former topped out at 1.1420, and eventually fell as low as 1.1316 with both Cable and pressures in Greek and Italian bond markets weighing. As equity and UST yield losses accelerated, USD/JPY saw only modest further losses, 112.50 holding, though EUR/JPY fell below 128.
There was no great change on the CHF as Swiss CPI came in weaker than expected. Risk off sentiment was CHF supportive, but EUR/CHF loses stalled ahead of 1.13.
Commodity currencies lost ground with the Crude recovery showing signs of stalling. AUD/NZD was unable to hold a return to the 1.06 handle while AUD/CAD failed to hold a move below .97. USD/CAD advanced almost a big figure to 1.3258 ahead of the BoC policy decision on Wednesday.
NOK is slightly better, while there is no bounce in EUR/SEK despite the Riksbank's Jansson saying he favours a higher inflation target and saying it would be possible to ease the repo rate further if necessary.

Asia FX and News:
-Trump's China muse sounds the alarm on negotiations that risk becoming "undone" ~ Axios
-Navarro Says `Premature' to Lose Faith in U.S.-China Talks ~ Fox
-MOFCOM: China to implement specific items agreed upon meeting asap
-Australia 3Q GDP Expands 0.3% Q/q; Est. +0.6%, 2Q y/y revised from 3.4% to 3.1%
- AUD fell sharply on a huge miss on Q3 GDP, printed 0.3%q/q vs expectations for 0.6%q/q. Previous quarter y/y figure revised lower. AUD a touch higher on positive comments from Chinese officials on US-China trade to see a high of 0.7356 prior to the data before falling to 0.7290. AUD/NZD hits fresh lows as technical support gave way, now eyes April low around 1.05. NZD/USD dragged down by the Aussie, though impact was modest. Dollar remains firm from the NY session. USD/JPY edges higher but capped by NY highs around 113. EUR/USD a shade lower, supported by Tues lows. Cable struggles to stay above 1.27 with dollar firm. USD/CAD adding gains on the rally in NY ahead of BoC.

Data:

AU: AIG Services PMI (Nov) 55.1 (Mkt: Prev: 51.1)

NZ: ANZ Commodity Price (Nov) -0.6% (Mkt: Prev: -2.4)

JP: Composite PMI (Nov) 52.4 (Mkt: Prev: 52.5)

JP: Services PMI (Nov) 52.3 (Mkt: Prev: 52.4)

AU: GDP (sa) (Q3) 0.3% q/q (Mkt: 0.6 Prev: 0.9)

AU: GDP (3Q) 2.8% y/y (Mkt: 3.3 Prev: 3.1R)

Still To Be Released:

Data:

06:00 GMT - IE: Services PMI (Nov) (Mkt: Prev: 57.2)

07:30 GMT - DE: Composite PMI (Nov F) (Mkt: 52.2 Prev: 52.2)

07:30 GMT - DE: Services PMI (Nov F) (Mkt: 53.3 Prev: 53.3)

07:30 GMT - SE: Services PMI (Nov) (Mkt: Prev: 56.3)

08:00 GMT - ES: Industrial Production (sa) (Oct) 4cast: % y/y (Mkt: -0.3 Prev: -0.1)

08:15 GMT - ES: Services PMI (Nov) (Mkt: 53.9 Prev: 54)

08:30 GMT - SE: Industrial Orders (Oct) % m/m (Mkt: Prev: 0)

08:30 GMT - SE: Industrial Orders (Oct) %y/y (Mkt: Prev: -0.4)

08:30 GMT - SE: Industrial Production (Oct) % y/y (Mkt: Prev: 2.2)

08:45 GMT - IT: Composite PMI (Nov) (Mkt: 49.1 Prev: 56.1)

08:45 GMT - IT: Services PMI (Nov) (Mkt: 49.3 Prev: 49.2)

08:50 GMT - FR: Composite PMI (Nov F) (Mkt: 54 Prev: 54)

08:50 GMT - FR: Services PMI (Nov F) (Mkt: 55 Prev: 55)

09:00 GMT - EU: Composite PMI (Nov F) (Mkt: 52.4 Prev: 52.4)

09:00 GMT - EU: Services PMI (Nov F) (Mkt: 53.1 Prev: 53.1)

09:30 GMT - UK: CIPS / Markit Services PMI (Nov) 4cast: 52.8index (Mkt: 52.7 Prev: 52.2)

10:00 GMT - EU: Retail Sales (Oct) % m/m (Mkt: 0.2 Prev: 0)

10:00 GMT - EU: Retail Sales (Oct) % y/y (Mkt: 2 Prev: 0.8)

14:00 GMT - CA: BoC Rate (05-Dec) 4cast: 1.75% (Mkt: 1.75 Prev: 1.75)

Events & Auctions:

ES: Expected: Tap of Bono 07/24 (EUR 1.5bn)

ES: Expected: Tap of Oblig. 07/28 (EUR 1.5bn)

ES: Expected: Tap of Oblig-ei 11/30 (EUR 1bn)

01:30 GMT - JP: BoJ's Wakatabe Speaks in Niigata

07:00 GMT - UK: BoE Financial Stability Report

08:30 GMT - EU: ECB's Draghi Speaks in Frankfurt

08:45 GMT - EU: ECB's Nouy Speaks in Frankfurt

10:15 GMT - EU: ECB's Lautenschlaeger Speaks in Frankfurt

15:00 GMT - CA: BoC Interest Rate Announcement

19:00 GMT - US: Fed Releases Beige Book

22:15 GMT - US: Fed's Quarles Speaks in Stanford


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