Forex - Asia Highlights - Monday, 18 Nov 2019


 05:47 (GMT) 18 Nov

  [Forex Highlights]

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Asia Highlights - Monday, 18 Nov 2019 (0101-PSYT-C01)

US Overview:
Kudlow's comment that the US and China were down to short strokes non a phase 1 trade deal lifted risk appetite, while a report that the Brexit party would stand down in some opposition-held seats lifted the GBP.

US Highlights:
- US Oct retail sales +0.3% vs 0.2% exp, ex autos +0.2% vs 0.4% exp.
- US Nov Empire State manufacturing fell to 2.9 from 4.0 vs 6.0 exp.
- US Oct industrial production -0.8% vs -0.4% exp, manufacturing -0.6% vs -0.7% exp, manufacturing ex autos -0.1%.

Currencies:
Supported by positive comments on US-China trade in the Asian session USD/JPY moved steadily higher, highs above 108.80. AUD/USD was also supported, moving above .68 though USD/CAD struggled to find direction. EUR/CHF continued its rebound from Thursday, getting close to 1.0950.

In the UK the Brexit Party was reported to stand down 43 candidates in non-Tory seats, further improving the market perception that Johnson might win a majority at the election. GBP/USD bounced above 1.29. EUR/GBP saw a low of .8548 but EUR/USD moved steadily higher from the mid-European morning, moving above 1.1050.

US data was mostly subdued with retail sales up only marginally ex autos and gasoline while manufacturing output saw a marginal decline ex autos. European data was thin on the ground, Oct Eurozone CPI confirmed at 1.2% and Sep's trade balance up to 18.7bn from 14.7bn, higher than expected.

Asia FX and News:
-New Zealand Services Industry for October Rises to 55.4 from 54.4
-U.S. and China Trade Negotiators held "Constructive Discussions" in a Phone Call on Saturday ~ BBG
-U.S. Set to Extend Reprieve for Huawei ~ NYT
-PBOC Lowers 7-Day Reverse Repo Rate to 2.5%, First since 2015
-PM Johnson Offers Business Tax Break worth £1bn
-Market brushed off the 'constructive discussions' US and China had in Saturday's phone call to address key concerns in phase one deal, which lacks detail. NYT reported an extension for US companies to do business with Huawei but unable to lift risk appetite. USD/JPY steady around 108.80. USD was broadly softer against the European currencies on positive UK news. GBP led the G10 currencies following pledges from every Conservative candidates to back PM Johnson's plan if elected. This not only might increase the margin of a widely expected Conservative victory but also points to a smoother passage of the PM's Brexit deal after the GE. PM Johnson also offers tax breaks worth £1bn to business to compensate for Brexit disruptions. PBoC adjusts the 7-day reverse repo rate slightly lower 2.5% following the MLF rate cut last week, which gave Chinese stocks a modest lift, but AUD and NZD remain soft.

Data:

UK: Rightmove House Price Index (Nov): -1.3% m/m (Prev: 0.6)

UK: Rightmove House Price Index (Nov) 0.3% y/y (Prev: -0.2)

Still to be released:

15:00 GMT - US: NAHB Builders survey (Nov) index (Mkt: 71 Prev: 71)

21:00 GMT - US: Net Long-term TICS Flows (Sep) USD bn (Prev: -41.1)

Events

17:00 GMT - US: Fed's Mester speaks in Maryland


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