Forex - Asia Close Highlights


 08:49 (GMT) 10 Oct

  [Forex Highlights]

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Asia Close Highlights (0101-PJNS-C01)

10 October 2019

Regional Backdrop:

Asian currencies were slightly up on Thursday. CNH led gains of 0.29%, alongside CNY (0.23%). THB (-0.25%) and KRW (-0.24%) fell. Market attention is on US-China trade talks. Some limited deals and currency pact being thrown on newswires as some limited cooperative measures.

USD/CNH saw a sharp move lower on Thursday. Pair was down to 7.1225 last after being as high as 7.1684. This came after news reports that US is weighing on a currency pact with China as part of a partial trade deal. Focus is on US-China trade talks where China seems open to a small trade deal if Trump eases tariff threats. PBoC fixed mid-point at 7.0730 vs. previous close of 7.1315. USD/CNY gapped lower and last at 7.1170. 1Y NDF last lower vs. Wednesday at 7.1828.

USD/SGD traded in volatile fashion at the beginning of Thursday with conflicting reports over the U.S. - China trade talks. Pair rose to an intra-day high at 1.3826 initially, following reports of the trade talks in Washington may be cut short, stoking risk aversion. However, some U.S. sources later claimed that the trade talks would proceed as planned on Thursday and Friday, which re-invited risk-on sentiments. Pair subsequently pared gains back to a 2-week low at 1.3775. There is a possibility that an interim deal may be reached ahead of the October's U.S. tariffs deadline next week, a trend from previous meetings.

USD/IDR onshore spot hit 14182 highs in early trading on Thursday as risk aversion remained rampant amid US-China trade talks and Turkey starting military operations in Syria. Reports of US considering a currency pact as part of the partial trade deal with China however supported the yuan and Asian currencies as possibility of suspension of tariff increase next week emerged. Pair dropped to 14145 and traded sideways around 14150 until last check.

USD/INR onshore spot remained close to the 71 handle earlier on Thursday amid flip-flop announcements in the ongoing US-China trade talks. Possibility of tariffs going up next week still remains high however, and pair traded higher to 71.150 in the afternoon. Eyes also on Xi-Modi meet and RCEP negotiations scheduled for this week.

Market Psychology

USD/CNH - This move turns attention to 7.0965 support, while 7.1585 for first resistance. For USD/CNY, psychological support is at 7.1000 big figure.

USD/SGD - In view of the potential risk-on sentiments, we have a slight downside bias towards the 1.3751 support. If broken, will turn our attention to the 1.3721 support next.

USD/IDR - Room above 14200 remains limited due to BI presence, but a strongly negative trade talks outcome still poses threat.

USD/INR - The break above the 71 handle still remains fragile and a firmer upside bias is likely only if 71.500 breaks. Support at 70.355 will continue to hold.


Forex - Asia Open - Overnight Highlights


 23:42 (GMT) 07 Oct

 [Forex Highlights]

Asia Overnight Highlights - 08 Oct 2019

MAJORS

FX Highlights:

The Bloomberg dollar spot index continued to trade below the 99 handle on Monday as trade talk jitters continued to unnerve investors. Reports were playing down a major breakthrough in US-China talks as China refused to make concessions on its industrial policy.

USD/JPY got support from gains in front end UST yields, and comments from Kudlow, saying delisting of Chinese companies was not on the table, and seeing possible progress in the US-China trade talks. A report from Fox business that China was prepared to do a partial deal saw a bounce to a high of 107.45.

In a quiet European morning EUR/USD had edged a little lower, helped by slightly weaker than expected Aug German factory orders, though offset by an upward revision to Jul. A pick up to 1.10 followed, despite the Sentix investor confidence index falling to its lowest since 2012.

GBP ended marginally lower with no real news on Brexit. EUR/CHF dipped below 1.09 but recovered as risk appetite improved. EUR/NOK and EUR/SEK were both firmer, NOK undermined by weak industrial production data and news of reduced spending from the sovereign wealth fund.

Gains in oil as tensions built over Turkey and Syria did help USD/CAD see lows below 1.33. AUD/CAD remained lower even as USD/CAD corrected on a firmer USD tone.

Data/Events Highlights:

- Kudlow said delisting Chinese companies not on the table.

- US Aug consumer credit +$17.9bn vs $15.0bn exp.

- In August, German manufacturing orders fell again by 0.6% m/m after an upwardly revised 2.1% m/m contraction in July (previous estimate was -2.7% m/m in July).

- Japan's August household spending was up by 1% y/y, in-line with expectations.

- VIX index: 17.86 (+4.81%)

- Gold Spot: $1,492.40/oz (-0.08%)

- ICE Brent front contract: $58.35 ($-0.02)

- Nymex WTI front contract: $52.86 (+$0.11)

- Reuters/Jefferies Commodities Index: 173.10 (-0.23%)

- 10y UST: 1.558% (+3bp) (Asia morning)

- DJI: 26,478.02 (-0.36%); S&P: 2,938.79 (-0.45%); Nasdaq: 7,956.29 (-0.33%)

Data/Events Ahead:

US Sep PPI is expected to show gains of 0.1% overall and 0.2% ex food and energy, with gasoline prices lower in the month as a whole despite a late bounce.

Focus would also be on Fed Powell's speech at the NABE conference today.

German industrial production is expected to have improved slightly in August by 0.2% m/m, after a modest fall in July, of 0.6% m/m. As a result, the output produced is expected to be 4.2% smaller than a year earlier. Survey data suggest a modest improvement in strictly industrial production and a moderate fall in construction output.

Japan's September Eco watchers survey is also due. Sentiment among economy watchers has slipped to a record low of 39.7 in August, and it is likely to continue to remain weak as the sales tax hike weighed on sentiment.

EMERGING ASIA

FX Highlights:

Asian currencies generally weakened on Monday, as US-China trade talks were eyed in the week. CNH (-0.31%) and PHP (-0.23%) were the worst performers. This came as China said it will not likely agree a broad deal with the US. TWD gained 0.22% in contrast. Quiet day in terms of data, and eyes remained on talks and FOMC minutes.

USD/CNH traded sideways around 7.1300 on Monday, eying the opening of the onshore China markets on Tuesday. Expectations of a break of the next resistance at 7.1858 are low at the moment. Onshore markets will return from holiday today. 1Y NDFs still unable to see gains above 7.2000 and traded sideways around 7.1950.

USD/SGD had a mild upside bias on Monday, but gains above 1.3820 were quickly reversed. Pair however remained supported above 1.3800 handle - trading sideways around 1.3810. We expect markets to remain cautious ahead of the resumption of U.S. - China trade talks on Thursday in Washington. Further upside can be seen towards the 1.3841 resistance.

USD/IDR 1M NDFs traded with an upside bias on Monday and tested the upside at 14240 but a frim break was not seen until last look. Onshore spot traded with a slight upside bias at the start of the new week, inching up to 14150+ from open of 14138 in early trading. Pair extended gains further to 14160+ levels in the afternoon. Room above 14200 remains limited to due to BI presence, and no strong supports are seen on the downside until 14058.

USD/INR 1M NDFs traded choppily around 71.350 on Monday as further signals on US-China trade talks were awaited. Onshore spot picked up some momentum to rise to 71+ levels in early trading on Monday from previous close of 70.880 as risk aversion was at play amid the looming US-China trade talks. Another round of RCEP negotiations are also scheduled for this week, which may keep investors on the edge. Pair continued to trade on either side of the 71 handle. Only break of support at 70.355 will turn the focus to the downside.

Data/Events Highlights:

Taiwan's September exports registered a surprise fall of 4.6% y/y while imports were down 0.6% y/y - bringing the trade balance $3.13bn - lower than estimates.

Data/Events Ahead:

No key data is scheduled in EM Asia on Tuesday.

DATA RELEASES DUE TODAY

01:30 GMT / 09:30 SGT - AU: NAB Business Conditions (Sep) [Prev: 1]

01:30 GMT / 09:30 SGT - AU: NAB Business Confidence (Sep) [Prev: 1]

01:30 GMT / 09:30 SGT - AU: ANZ Job Ads (Sep) [Prev: -2.8]

10:00 GMT / 18:00 SGT - US: NFIB Small Business Optimism (Sep) [Mkt: 102.5, Prev: 103.1]

12:15 GMT / 20:15 SGT - CA: Housing Starts (Sep) 4cast: 235k [Prev: 226.6]

12:30 GMT / 20:30 SGT - US: PPI (Sep) 4cast: 0.1% m/m [Mkt: 0.1, Prev: 0.1]

12:30 GMT / 20:30 SGT - US: PPI (ex Food & Energy) (Sep) 4cast: 0.2% m/m [Mkt: 0.2, Prev: 0.3]

12:30 GMT / 20:30 SGT - CA: Building permits (Aug) [Prev: 3]

EVENTS & AUCTIONS

IN: Market Holiday - Dusshera

04:00 GMT / 12:00 SGT - UK: BoE's Carney Speaks in Tokyo

09:30 GMT / 17:30 SGT - EU: ECB's Hernandez de Cos speaks in Frankfurt

09:30 GMT / 17:30 SGT - UK: BoE's Tenreyro speaks in Frankfurt

17:35 GMT / 01:35 SGT - US: Fed's Evans speaks in Chicago

17:50 GMT / 01:50 SGT - US: Fed's Powell speaks at NABE conference

18:00 GMT / 02:00 SGT - US: 3 year Notes Auction (USD 38bn)

21:00 GMT / 05:00 SGT - US: Fed's Kashkari takes part in townhall


Forex - Asia Open - Overnight Highlights


 23:42 (GMT) 07 Oct

 [Forex Highlights]

Asia Overnight Highlights - 08 Oct 2019

MAJORS

FX Highlights:

The Bloomberg dollar spot index continued to trade below the 99 handle on Monday as trade talk jitters continued to unnerve investors. Reports were playing down a major breakthrough in US-China talks as China refused to make concessions on its industrial policy.

USD/JPY got support from gains in front end UST yields, and comments from Kudlow, saying delisting of Chinese companies was not on the table, and seeing possible progress in the US-China trade talks. A report from Fox business that China was prepared to do a partial deal saw a bounce to a high of 107.45.

In a quiet European morning EUR/USD had edged a little lower, helped by slightly weaker than expected Aug German factory orders, though offset by an upward revision to Jul. A pick up to 1.10 followed, despite the Sentix investor confidence index falling to its lowest since 2012.

GBP ended marginally lower with no real news on Brexit. EUR/CHF dipped below 1.09 but recovered as risk appetite improved. EUR/NOK and EUR/SEK were both firmer, NOK undermined by weak industrial production data and news of reduced spending from the sovereign wealth fund.

Gains in oil as tensions built over Turkey and Syria did help USD/CAD see lows below 1.33. AUD/CAD remained lower even as USD/CAD corrected on a firmer USD tone.

Data/Events Highlights:

- Kudlow said delisting Chinese companies not on the table.

- US Aug consumer credit +$17.9bn vs $15.0bn exp.

- In August, German manufacturing orders fell again by 0.6% m/m after an upwardly revised 2.1% m/m contraction in July (previous estimate was -2.7% m/m in July).

- Japan's August household spending was up by 1% y/y, in-line with expectations.

- VIX index: 17.86 (+4.81%)

- Gold Spot: $1,492.40/oz (-0.08%)

- ICE Brent front contract: $58.35 ($-0.02)

- Nymex WTI front contract: $52.86 (+$0.11)

- Reuters/Jefferies Commodities Index: 173.10 (-0.23%)

- 10y UST: 1.558% (+3bp) (Asia morning)

- DJI: 26,478.02 (-0.36%); S&P: 2,938.79 (-0.45%); Nasdaq: 7,956.29 (-0.33%)

Data/Events Ahead:

US Sep PPI is expected to show gains of 0.1% overall and 0.2% ex food and energy, with gasoline prices lower in the month as a whole despite a late bounce.

Focus would also be on Fed Powell's speech at the NABE conference today.

German industrial production is expected to have improved slightly in August by 0.2% m/m, after a modest fall in July, of 0.6% m/m. As a result, the output produced is expected to be 4.2% smaller than a year earlier. Survey data suggest a modest improvement in strictly industrial production and a moderate fall in construction output.

Japan's September Eco watchers survey is also due. Sentiment among economy watchers has slipped to a record low of 39.7 in August, and it is likely to continue to remain weak as the sales tax hike weighed on sentiment.

EMERGING ASIA

FX Highlights:

Asian currencies generally weakened on Monday, as US-China trade talks were eyed in the week. CNH (-0.31%) and PHP (-0.23%) were the worst performers. This came as China said it will not likely agree a broad deal with the US. TWD gained 0.22% in contrast. Quiet day in terms of data, and eyes remained on talks and FOMC minutes.

USD/CNH traded sideways around 7.1300 on Monday, eying the opening of the onshore China markets on Tuesday. Expectations of a break of the next resistance at 7.1858 are low at the moment. Onshore markets will return from holiday today. 1Y NDFs still unable to see gains above 7.2000 and traded sideways around 7.1950.

USD/SGD had a mild upside bias on Monday, but gains above 1.3820 were quickly reversed. Pair however remained supported above 1.3800 handle - trading sideways around 1.3810. We expect markets to remain cautious ahead of the resumption of U.S. - China trade talks on Thursday in Washington. Further upside can be seen towards the 1.3841 resistance.

USD/IDR 1M NDFs traded with an upside bias on Monday and tested the upside at 14240 but a frim break was not seen until last look. Onshore spot traded with a slight upside bias at the start of the new week, inching up to 14150+ from open of 14138 in early trading. Pair extended gains further to 14160+ levels in the afternoon. Room above 14200 remains limited to due to BI presence, and no strong supports are seen on the downside until 14058.

USD/INR 1M NDFs traded choppily around 71.350 on Monday as further signals on US-China trade talks were awaited. Onshore spot picked up some momentum to rise to 71+ levels in early trading on Monday from previous close of 70.880 as risk aversion was at play amid the looming US-China trade talks. Another round of RCEP negotiations are also scheduled for this week, which may keep investors on the edge. Pair continued to trade on either side of the 71 handle. Only break of support at 70.355 will turn the focus to the downside.

Data/Events Highlights:

Taiwan's September exports registered a surprise fall of 4.6% y/y while imports were down 0.6% y/y - bringing the trade balance $3.13bn - lower than estimates.

Data/Events Ahead:

No key data is scheduled in EM Asia on Tuesday.

DATA RELEASES DUE TODAY

01:30 GMT / 09:30 SGT - AU: NAB Business Conditions (Sep) [Prev: 1]

01:30 GMT / 09:30 SGT - AU: NAB Business Confidence (Sep) [Prev: 1]

01:30 GMT / 09:30 SGT - AU: ANZ Job Ads (Sep) [Prev: -2.8]

10:00 GMT / 18:00 SGT - US: NFIB Small Business Optimism (Sep) [Mkt: 102.5, Prev: 103.1]

12:15 GMT / 20:15 SGT - CA: Housing Starts (Sep) 4cast: 235k [Prev: 226.6]

12:30 GMT / 20:30 SGT - US: PPI (Sep) 4cast: 0.1% m/m [Mkt: 0.1, Prev: 0.1]

12:30 GMT / 20:30 SGT - US: PPI (ex Food & Energy) (Sep) 4cast: 0.2% m/m [Mkt: 0.2, Prev: 0.3]

12:30 GMT / 20:30 SGT - CA: Building permits (Aug) [Prev: 3]

EVENTS & AUCTIONS

IN: Market Holiday - Dusshera

04:00 GMT / 12:00 SGT - UK: BoE's Carney Speaks in Tokyo

09:30 GMT / 17:30 SGT - EU: ECB's Hernandez de Cos speaks in Frankfurt

09:30 GMT / 17:30 SGT - UK: BoE's Tenreyro speaks in Frankfurt

17:35 GMT / 01:35 SGT - US: Fed's Evans speaks in Chicago

17:50 GMT / 01:50 SGT - US: Fed's Powell speaks at NABE conference

18:00 GMT / 02:00 SGT - US: 3 year Notes Auction (USD 38bn)

21:00 GMT / 05:00 SGT - US: Fed's Kashkari takes part in townhall


Forex - Asia Open - Overnight Highlights


 23:42 (GMT) 07 Oct

 [Forex Highlights]

Asia Overnight Highlights - 08 Oct 2019

MAJORS

FX Highlights:

The Bloomberg dollar spot index continued to trade below the 99 handle on Monday as trade talk jitters continued to unnerve investors. Reports were playing down a major breakthrough in US-China talks as China refused to make concessions on its industrial policy.

USD/JPY got support from gains in front end UST yields, and comments from Kudlow, saying delisting of Chinese companies was not on the table, and seeing possible progress in the US-China trade talks. A report from Fox business that China was prepared to do a partial deal saw a bounce to a high of 107.45.

In a quiet European morning EUR/USD had edged a little lower, helped by slightly weaker than expected Aug German factory orders, though offset by an upward revision to Jul. A pick up to 1.10 followed, despite the Sentix investor confidence index falling to its lowest since 2012.

GBP ended marginally lower with no real news on Brexit. EUR/CHF dipped below 1.09 but recovered as risk appetite improved. EUR/NOK and EUR/SEK were both firmer, NOK undermined by weak industrial production data and news of reduced spending from the sovereign wealth fund.

Gains in oil as tensions built over Turkey and Syria did help USD/CAD see lows below 1.33. AUD/CAD remained lower even as USD/CAD corrected on a firmer USD tone.

Data/Events Highlights:

- Kudlow said delisting Chinese companies not on the table.

- US Aug consumer credit +$17.9bn vs $15.0bn exp.

- In August, German manufacturing orders fell again by 0.6% m/m after an upwardly revised 2.1% m/m contraction in July (previous estimate was -2.7% m/m in July).

- Japan's August household spending was up by 1% y/y, in-line with expectations.

- VIX index: 17.86 (+4.81%)

- Gold Spot: $1,492.40/oz (-0.08%)

- ICE Brent front contract: $58.35 ($-0.02)

- Nymex WTI front contract: $52.86 (+$0.11)

- Reuters/Jefferies Commodities Index: 173.10 (-0.23%)

- 10y UST: 1.558% (+3bp) (Asia morning)

- DJI: 26,478.02 (-0.36%); S&P: 2,938.79 (-0.45%); Nasdaq: 7,956.29 (-0.33%)

Data/Events Ahead:

US Sep PPI is expected to show gains of 0.1% overall and 0.2% ex food and energy, with gasoline prices lower in the month as a whole despite a late bounce.

Focus would also be on Fed Powell's speech at the NABE conference today.

German industrial production is expected to have improved slightly in August by 0.2% m/m, after a modest fall in July, of 0.6% m/m. As a result, the output produced is expected to be 4.2% smaller than a year earlier. Survey data suggest a modest improvement in strictly industrial production and a moderate fall in construction output.

Japan's September Eco watchers survey is also due. Sentiment among economy watchers has slipped to a record low of 39.7 in August, and it is likely to continue to remain weak as the sales tax hike weighed on sentiment.

EMERGING ASIA

FX Highlights:

Asian currencies generally weakened on Monday, as US-China trade talks were eyed in the week. CNH (-0.31%) and PHP (-0.23%) were the worst performers. This came as China said it will not likely agree a broad deal with the US. TWD gained 0.22% in contrast. Quiet day in terms of data, and eyes remained on talks and FOMC minutes.

USD/CNH traded sideways around 7.1300 on Monday, eying the opening of the onshore China markets on Tuesday. Expectations of a break of the next resistance at 7.1858 are low at the moment. Onshore markets will return from holiday today. 1Y NDFs still unable to see gains above 7.2000 and traded sideways around 7.1950.

USD/SGD had a mild upside bias on Monday, but gains above 1.3820 were quickly reversed. Pair however remained supported above 1.3800 handle - trading sideways around 1.3810. We expect markets to remain cautious ahead of the resumption of U.S. - China trade talks on Thursday in Washington. Further upside can be seen towards the 1.3841 resistance.

USD/IDR 1M NDFs traded with an upside bias on Monday and tested the upside at 14240 but a frim break was not seen until last look. Onshore spot traded with a slight upside bias at the start of the new week, inching up to 14150+ from open of 14138 in early trading. Pair extended gains further to 14160+ levels in the afternoon. Room above 14200 remains limited to due to BI presence, and no strong supports are seen on the downside until 14058.

USD/INR 1M NDFs traded choppily around 71.350 on Monday as further signals on US-China trade talks were awaited. Onshore spot picked up some momentum to rise to 71+ levels in early trading on Monday from previous close of 70.880 as risk aversion was at play amid the looming US-China trade talks. Another round of RCEP negotiations are also scheduled for this week, which may keep investors on the edge. Pair continued to trade on either side of the 71 handle. Only break of support at 70.355 will turn the focus to the downside.

Data/Events Highlights:

Taiwan's September exports registered a surprise fall of 4.6% y/y while imports were down 0.6% y/y - bringing the trade balance $3.13bn - lower than estimates.

Data/Events Ahead:

No key data is scheduled in EM Asia on Tuesday.

DATA RELEASES DUE TODAY

01:30 GMT / 09:30 SGT - AU: NAB Business Conditions (Sep) [Prev: 1]

01:30 GMT / 09:30 SGT - AU: NAB Business Confidence (Sep) [Prev: 1]

01:30 GMT / 09:30 SGT - AU: ANZ Job Ads (Sep) [Prev: -2.8]

10:00 GMT / 18:00 SGT - US: NFIB Small Business Optimism (Sep) [Mkt: 102.5, Prev: 103.1]

12:15 GMT / 20:15 SGT - CA: Housing Starts (Sep) 4cast: 235k [Prev: 226.6]

12:30 GMT / 20:30 SGT - US: PPI (Sep) 4cast: 0.1% m/m [Mkt: 0.1, Prev: 0.1]

12:30 GMT / 20:30 SGT - US: PPI (ex Food & Energy) (Sep) 4cast: 0.2% m/m [Mkt: 0.2, Prev: 0.3]

12:30 GMT / 20:30 SGT - CA: Building permits (Aug) [Prev: 3]

EVENTS & AUCTIONS

IN: Market Holiday - Dusshera

04:00 GMT / 12:00 SGT - UK: BoE's Carney Speaks in Tokyo

09:30 GMT / 17:30 SGT - EU: ECB's Hernandez de Cos speaks in Frankfurt

09:30 GMT / 17:30 SGT - UK: BoE's Tenreyro speaks in Frankfurt

17:35 GMT / 01:35 SGT - US: Fed's Evans speaks in Chicago

17:50 GMT / 01:50 SGT - US: Fed's Powell speaks at NABE conference

18:00 GMT / 02:00 SGT - US: 3 year Notes Auction (USD 38bn)

21:00 GMT / 05:00 SGT - US: Fed's Kashkari takes part in townhall


Forex - Asia Open - Overnight Highlights


 23:42 (GMT) 07 Oct

 [Forex Highlights]

Asia Overnight Highlights - 08 Oct 2019

MAJORS

FX Highlights:

The Bloomberg dollar spot index continued to trade below the 99 handle on Monday as trade talk jitters continued to unnerve investors. Reports were playing down a major breakthrough in US-China talks as China refused to make concessions on its industrial policy.

USD/JPY got support from gains in front end UST yields, and comments from Kudlow, saying delisting of Chinese companies was not on the table, and seeing possible progress in the US-China trade talks. A report from Fox business that China was prepared to do a partial deal saw a bounce to a high of 107.45.

In a quiet European morning EUR/USD had edged a little lower, helped by slightly weaker than expected Aug German factory orders, though offset by an upward revision to Jul. A pick up to 1.10 followed, despite the Sentix investor confidence index falling to its lowest since 2012.

GBP ended marginally lower with no real news on Brexit. EUR/CHF dipped below 1.09 but recovered as risk appetite improved. EUR/NOK and EUR/SEK were both firmer, NOK undermined by weak industrial production data and news of reduced spending from the sovereign wealth fund.

Gains in oil as tensions built over Turkey and Syria did help USD/CAD see lows below 1.33. AUD/CAD remained lower even as USD/CAD corrected on a firmer USD tone.

Data/Events Highlights:

- Kudlow said delisting Chinese companies not on the table.

- US Aug consumer credit +$17.9bn vs $15.0bn exp.

- In August, German manufacturing orders fell again by 0.6% m/m after an upwardly revised 2.1% m/m contraction in July (previous estimate was -2.7% m/m in July).

- Japan's August household spending was up by 1% y/y, in-line with expectations.

- VIX index: 17.86 (+4.81%)

- Gold Spot: $1,492.40/oz (-0.08%)

- ICE Brent front contract: $58.35 ($-0.02)

- Nymex WTI front contract: $52.86 (+$0.11)

- Reuters/Jefferies Commodities Index: 173.10 (-0.23%)

- 10y UST: 1.558% (+3bp) (Asia morning)

- DJI: 26,478.02 (-0.36%); S&P: 2,938.79 (-0.45%); Nasdaq: 7,956.29 (-0.33%)

Data/Events Ahead:

US Sep PPI is expected to show gains of 0.1% overall and 0.2% ex food and energy, with gasoline prices lower in the month as a whole despite a late bounce.

Focus would also be on Fed Powell's speech at the NABE conference today.

German industrial production is expected to have improved slightly in August by 0.2% m/m, after a modest fall in July, of 0.6% m/m. As a result, the output produced is expected to be 4.2% smaller than a year earlier. Survey data suggest a modest improvement in strictly industrial production and a moderate fall in construction output.

Japan's September Eco watchers survey is also due. Sentiment among economy watchers has slipped to a record low of 39.7 in August, and it is likely to continue to remain weak as the sales tax hike weighed on sentiment.

EMERGING ASIA

FX Highlights:

Asian currencies generally weakened on Monday, as US-China trade talks were eyed in the week. CNH (-0.31%) and PHP (-0.23%) were the worst performers. This came as China said it will not likely agree a broad deal with the US. TWD gained 0.22% in contrast. Quiet day in terms of data, and eyes remained on talks and FOMC minutes.

USD/CNH traded sideways around 7.1300 on Monday, eying the opening of the onshore China markets on Tuesday. Expectations of a break of the next resistance at 7.1858 are low at the moment. Onshore markets will return from holiday today. 1Y NDFs still unable to see gains above 7.2000 and traded sideways around 7.1950.

USD/SGD had a mild upside bias on Monday, but gains above 1.3820 were quickly reversed. Pair however remained supported above 1.3800 handle - trading sideways around 1.3810. We expect markets to remain cautious ahead of the resumption of U.S. - China trade talks on Thursday in Washington. Further upside can be seen towards the 1.3841 resistance.

USD/IDR 1M NDFs traded with an upside bias on Monday and tested the upside at 14240 but a frim break was not seen until last look. Onshore spot traded with a slight upside bias at the start of the new week, inching up to 14150+ from open of 14138 in early trading. Pair extended gains further to 14160+ levels in the afternoon. Room above 14200 remains limited to due to BI presence, and no strong supports are seen on the downside until 14058.

USD/INR 1M NDFs traded choppily around 71.350 on Monday as further signals on US-China trade talks were awaited. Onshore spot picked up some momentum to rise to 71+ levels in early trading on Monday from previous close of 70.880 as risk aversion was at play amid the looming US-China trade talks. Another round of RCEP negotiations are also scheduled for this week, which may keep investors on the edge. Pair continued to trade on either side of the 71 handle. Only break of support at 70.355 will turn the focus to the downside.

Data/Events Highlights:

Taiwan's September exports registered a surprise fall of 4.6% y/y while imports were down 0.6% y/y - bringing the trade balance $3.13bn - lower than estimates.

Data/Events Ahead:

No key data is scheduled in EM Asia on Tuesday.

DATA RELEASES DUE TODAY

01:30 GMT / 09:30 SGT - AU: NAB Business Conditions (Sep) [Prev: 1]

01:30 GMT / 09:30 SGT - AU: NAB Business Confidence (Sep) [Prev: 1]

01:30 GMT / 09:30 SGT - AU: ANZ Job Ads (Sep) [Prev: -2.8]

10:00 GMT / 18:00 SGT - US: NFIB Small Business Optimism (Sep) [Mkt: 102.5, Prev: 103.1]

12:15 GMT / 20:15 SGT - CA: Housing Starts (Sep) 4cast: 235k [Prev: 226.6]

12:30 GMT / 20:30 SGT - US: PPI (Sep) 4cast: 0.1% m/m [Mkt: 0.1, Prev: 0.1]

12:30 GMT / 20:30 SGT - US: PPI (ex Food & Energy) (Sep) 4cast: 0.2% m/m [Mkt: 0.2, Prev: 0.3]

12:30 GMT / 20:30 SGT - CA: Building permits (Aug) [Prev: 3]

EVENTS & AUCTIONS

IN: Market Holiday - Dusshera

04:00 GMT / 12:00 SGT - UK: BoE's Carney Speaks in Tokyo

09:30 GMT / 17:30 SGT - EU: ECB's Hernandez de Cos speaks in Frankfurt

09:30 GMT / 17:30 SGT - UK: BoE's Tenreyro speaks in Frankfurt

17:35 GMT / 01:35 SGT - US: Fed's Evans speaks in Chicago

17:50 GMT / 01:50 SGT - US: Fed's Powell speaks at NABE conference

18:00 GMT / 02:00 SGT - US: 3 year Notes Auction (USD 38bn)

21:00 GMT / 05:00 SGT - US: Fed's Kashkari takes part in townhall


Forex - Asia Close Highlights


 08:43 (GMT) 07 Oct

 [Forex Highlights]

07 October 2019

Regional Backdrop:

Asian currencies generally weakened on Monday, as China markets are closed. PHP (-0.27%) and CNH (-0.22%) were the worst performances. This came as China said it will not likely agree a broad deal with the US. TWD gained 0.26% in contrast. Asia markets look to be relatively positive on US employment data out on Friday US time. Still some equity markets (particularly for Hong Kong markets) fell, dampened perhaps by Hong Kong unrest. Quiet day in terms of data.

On Monday, USD/CNH nudged higher in the absence of liquidity, hitting a high of 7.1397. Pair last at 7.1284. If current trend continues, this may push USD/CNY to opening lower on Tuesday once China returns from week long holiday.

USD/SGD hovered just above the 1.3800 big figure at the beginning of Monday's Asian session, before extending further gains to 1.3819 towards the end of the session. Reports are saying that Chinese officials are unwilling to agree to a broad trade deal ahead of negotiations, which fostered some risk aversion in the markets. We expect markets to remain cautious ahead of the resumption of U.S. - China trade talks on Thursday in Washington. Nonetheless, a potential interim deal may be reached ahead of the October's U.S. tariffs deadline next week.

USD/IDR onshore spot traded with a slight upside bias at the start of the new week, inching up to 14150+ from open of 14138 in early trading. US-China trade talks are scheduled for this week, and reports suggested that China has declined to negotiate on some of the American demands. This has brought risk aversion back to the table, while Fed jitters are also spreading with continued misses in US economic data. Pair extended gains further to 14160+ levels in the afternoon.

USD/INR onshore spot picked up some momentum to rise to 71+ levels in early trading on Monday from previous close of 70.880 as risk aversion was at play amid the looming US-China trade talks. Another round of RCEP negotiations are also scheduled for this week, which may keep investors on the edge after the RBI decision underwhelmed the markets. Pair continued to trade on either side of the 71 handle until last look.

Market Psychology

USD/CNH - Expectations of a break of the next resistance at 7.1858 are low at the moment.

USD/SGD - Further upside can be seen towards the 1.3841 resistance. If broken, will turn our attention to the 1.3878 resistance next.

USD/IDR - Room above 14200 remains limited to due to BI presence, and no strong supports are seen on the downside until 14058.

USD/INR - Only break of support at 70.355 will turn the focus to the downside.


Forex - Asia Close Highlights


 08:43 (GMT) 07 Oct

 [Forex Highlights]

07 October 2019

Regional Backdrop:

Asian currencies generally weakened on Monday, as China markets are closed. PHP (-0.27%) and CNH (-0.22%) were the worst performances. This came as China said it will not likely agree a broad deal with the US. TWD gained 0.26% in contrast. Asia markets look to be relatively positive on US employment data out on Friday US time. Still some equity markets (particularly for Hong Kong markets) fell, dampened perhaps by Hong Kong unrest. Quiet day in terms of data.

On Monday, USD/CNH nudged higher in the absence of liquidity, hitting a high of 7.1397. Pair last at 7.1284. If current trend continues, this may push USD/CNY to opening lower on Tuesday once China returns from week long holiday.

USD/SGD hovered just above the 1.3800 big figure at the beginning of Monday's Asian session, before extending further gains to 1.3819 towards the end of the session. Reports are saying that Chinese officials are unwilling to agree to a broad trade deal ahead of negotiations, which fostered some risk aversion in the markets. We expect markets to remain cautious ahead of the resumption of U.S. - China trade talks on Thursday in Washington. Nonetheless, a potential interim deal may be reached ahead of the October's U.S. tariffs deadline next week.

USD/IDR onshore spot traded with a slight upside bias at the start of the new week, inching up to 14150+ from open of 14138 in early trading. US-China trade talks are scheduled for this week, and reports suggested that China has declined to negotiate on some of the American demands. This has brought risk aversion back to the table, while Fed jitters are also spreading with continued misses in US economic data. Pair extended gains further to 14160+ levels in the afternoon.

USD/INR onshore spot picked up some momentum to rise to 71+ levels in early trading on Monday from previous close of 70.880 as risk aversion was at play amid the looming US-China trade talks. Another round of RCEP negotiations are also scheduled for this week, which may keep investors on the edge after the RBI decision underwhelmed the markets. Pair continued to trade on either side of the 71 handle until last look.

Market Psychology

USD/CNH - Expectations of a break of the next resistance at 7.1858 are low at the moment.

USD/SGD - Further upside can be seen towards the 1.3841 resistance. If broken, will turn our attention to the 1.3878 resistance next.

USD/IDR - Room above 14200 remains limited to due to BI presence, and no strong supports are seen on the downside until 14058.

USD/INR - Only break of support at 70.355 will turn the focus to the downside.


Forex - Asia Close Highlights


 08:43 (GMT) 07 Oct

 [Forex Highlights]

07 October 2019

Regional Backdrop:

Asian currencies generally weakened on Monday, as China markets are closed. PHP (-0.27%) and CNH (-0.22%) were the worst performances. This came as China said it will not likely agree a broad deal with the US. TWD gained 0.26% in contrast. Asia markets look to be relatively positive on US employment data out on Friday US time. Still some equity markets (particularly for Hong Kong markets) fell, dampened perhaps by Hong Kong unrest. Quiet day in terms of data.

On Monday, USD/CNH nudged higher in the absence of liquidity, hitting a high of 7.1397. Pair last at 7.1284. If current trend continues, this may push USD/CNY to opening lower on Tuesday once China returns from week long holiday.

USD/SGD hovered just above the 1.3800 big figure at the beginning of Monday's Asian session, before extending further gains to 1.3819 towards the end of the session. Reports are saying that Chinese officials are unwilling to agree to a broad trade deal ahead of negotiations, which fostered some risk aversion in the markets. We expect markets to remain cautious ahead of the resumption of U.S. - China trade talks on Thursday in Washington. Nonetheless, a potential interim deal may be reached ahead of the October's U.S. tariffs deadline next week.

USD/IDR onshore spot traded with a slight upside bias at the start of the new week, inching up to 14150+ from open of 14138 in early trading. US-China trade talks are scheduled for this week, and reports suggested that China has declined to negotiate on some of the American demands. This has brought risk aversion back to the table, while Fed jitters are also spreading with continued misses in US economic data. Pair extended gains further to 14160+ levels in the afternoon.

USD/INR onshore spot picked up some momentum to rise to 71+ levels in early trading on Monday from previous close of 70.880 as risk aversion was at play amid the looming US-China trade talks. Another round of RCEP negotiations are also scheduled for this week, which may keep investors on the edge after the RBI decision underwhelmed the markets. Pair continued to trade on either side of the 71 handle until last look.

Market Psychology

USD/CNH - Expectations of a break of the next resistance at 7.1858 are low at the moment.

USD/SGD - Further upside can be seen towards the 1.3841 resistance. If broken, will turn our attention to the 1.3878 resistance next.

USD/IDR - Room above 14200 remains limited to due to BI presence, and no strong supports are seen on the downside until 14058.

USD/INR - Only break of support at 70.355 will turn the focus to the downside.


Forex - India Flows: Rupee toying with 71 as trade talks loom


 04:35 (GMT) 07 Oct

 [Forex Flows]

USD/INR onshore spot picked up some momentum to rise to 71+ levels in early trading on Monday from previous close of 70.880 as risk aversion was at play amid the looming US-China trade talks. Another round of RCEP negotiations are also scheduled for this week, which may keep investors on the edge after the RBI decision underwhelmed the markets. Only break of support at 70.355 will turn the focus to the downside. 1M NDFs traded with an upside bias, back to 71.400-levels this morning, after slipping to 71.150 overnight. SENSEX in gains of 0.4% at last check.


Forex - Asia Open - Overnight Highlights


 23:49 (GMT) 06 Oct

 [Forex Highlights]

Asia Overnight Highlights - 07 Oct 2019

MAJORS

FX Highlights:

The Bloomberg dollar spot index traded sideways in Friday's NY session amid a mixed NFP report. The headline remained strong but the wage data was soft.

USD/JPY was unable to hold a bounce above 107.00 while post-payroll losses in EUR/USD were fully reversed, with a tight range between 1.095 and 1.10 holding. Late comments from Powell were mildly USD supportive.

White House's Kudlow said there has been a 'softening in the psychology of the trade talks' on both sides; deputies to meet Monday and Tuesday, principals on Thursday and Friday. AUD/JPY dipped lower to 71.919 in early trading amid jitters from the trade war.

UK government papers made it clear that the government would request a delay from the EU if there was no deal by Oct 19 but government sources told the BBC that they would find way to leave on Oct 31 anyway. Sources also indicated the chances of a deal before the European Summit were now "tiny". GBP weakened a little on the news, but erased most of its losses.

A USD/CAD dip nudged below 1.33 but was reversed, a fall in Canada's Ivey PMI below 50 helping to set the correction in motion. Apart from some brief volatility around the US data, AUD/USD moved steadily if slowly higher, but corrected slightly lower on Monday morning as trade talks were eyed in the week.

Data/Events Highlights:

- US Sep non-farm payroll +136k vs 145k exp, unemployment fell to 3.5% from 3.7% vs 3.7% exp, average hourly earnings 0.0% vs +0.2% exp.

- Fed's Bostic said latest China tariffs have potential to reach consumers.

- Fed's Rosengren said consumers strong, would be attentive to any signs of weakening.

- Fed's Powell said economy faces risks but overall in a good place.

- VIX index: 17.04 (-10.88%)

- Gold Spot: $1,507.41/oz (+0.18%)

- ICE Brent front contract: $58.25 ($-0.12)

- Nymex WTI front contract: $52.72 ($-0.09)

- Reuters/Jefferies Commodities Index: 173.49 (+0.05%)

- 10y UST: 1.529% (-1bp) (Asia morning)

- DJI: 26,573.72 (+1.42%); S&P: 2,952.01 (+1.42%); Nasdaq: 7,982.47 (+1.40%)

Data/Events Ahead:

We expect German factory orders to have fallen in August by 0.3% m/m. Following the 2.7% m/m contraction in July, this would bring the level of new orders down by close to 7% compared to August 2018.

Eurozone October Sentix Investor Confidence is out. The consensus expectation is for the index to soften from -11.1 to -12.5. Q2 house price index also out.

EMERGING ASIA

FX Highlights:

Majority of the Asian currencies were in the green against the dollar last week, as poor U.S. ISM and ADP employment data for September weakened the dollar. China markets also remained closed keeping Asian currencies steady. THB (+0.66%) led by a margin, followed by CNH (+0.36%). KRW (+0.28%) was seen in modest gains despite disappointing trade numbers and a deflation print. PHP (+0.26%) also saw gains even as a miss in inflation prompted calls for further easing. Only INR (-0.45%) and CNY (-0.36%) were seen in the red for the week. Geopolitical tensions ratchetted up as Hong Kong leader Carrie Lam invoked the emergency law amid the violent protests, banning face masks.

USD/CNH reversed the drop to sub-7.1100 levels seen in the NY session as trade talk jitters returned, and pair rose to 7.1250+ levels in early trading on Monday. Support at 7.0965, resistance at 7.1585. Onshore markets still on holiday. 1Y NDFs likewise inched above 7.1900 in early trading this morning after a slide to sub-7.1800 levels in Friday's NY session.

USD/SGD was seen back at the 1.3800 handle in Monday's early Asian session after being offered to 1.3777 lows in the previous session amid reports that China isn't willing to negotiate on certain US demands in the trade talks scheduled for this week. Risk is seen to 1.3778 strong support but a frim break below may remain unlikely as trade talk jitters return.

USD/IDR 1M NDFs remained close to 14180-levels in Friday's NY session. Onshore spot gapped lower to open at 14150 on the last day of the week from previous close of 14173 and slid to 1.5-week lows of 14125 in early trading amid missed in the US data. Week ahead brings key US-China trade talks back on the table, and volatility is likely. Room above 14200 remains limited to due to BI presence, and no strong supports are seen on the downside until 14058.

USD/INR 1M NDFs traded with a downside bias in the overnight session, and slid to 71.100-levels from a peak of 71.350 seen earlier in the European hours. Onshore spot slid lower earlier on Friday to intraday lows of 70.790 from previous close of 70.880 amid a slide in USD as economic data weakened. Pair however returned back to the 71 handle as RBI decision underwhelmed. Only break of support at 70.355 will turn the focus to the downside. Upside pressures to 71 are likely to stay.

Data/Events Highlights:

The Reserve Bank of India (RBI) decided to cut rates by a conventional quantum of 25bps on October 4th, after the previous 35bps cut, bring the repo rate to 5.15%.

The Philippines headline inflation eased to 0.9% y/y in September, the lowest in three years, furthering opening door to BSP rate cuts.

Malaysia's exports figures were weaker than market expectations, falling to -0.8% y/y in August from 1.7% y/y in July. Meanwhile, imports contracted to -12.5% y/y in August from -6.0% y/y in July. These lead to a trade balance of 10.92 MYR bn and underscored the drag on Malaysia's economy from the U.S.-China trade war.

Data/Events Ahead:

A quiet day ahead in the EM Asian markets with only Taiwan's September trade data eyed which will likely continue to show some trade diversion benefits.

DATA RELEASES DUE TODAY

00:00 GMT / 08:00 SGT - JP: Economy Watchers Survey (Sep) [Prev: 39.7]

05:00 GMT / 13:00 SGT - JP: Leading Indicator (Aug P) [Prev: 93.7]

07:30 GMT / 15:30 SGT - UK: Halifax House Price Index (Sep) % 3m y/y [Prev: 1.8]

08:00 GMT / 16:00 SGT - TW: Exports (Sep) % y/y [Prev: 2.6]

08:00 GMT / 16:00 SGT - TW: Imports (Sep) % y/y [Prev: -2.7]

08:00 GMT / 16:00 SGT - TW: Trade Balance (Sep) USD bn [Prev: 5.98]

08:30 GMT / 16:30 SGT - EU: Sentix Investor Confidence (Oct) [Prev: -11.1]

19:00 GMT / 03:00 SGT - US: Consumer Credit (Aug) USD bn [Mkt: 15, Prev: 23.294]

23:00 GMT / 07:00 SGT - KR: Current Account Balance (Aug) USD bn [Prev: 6.9494]

EVENTS & AUCTIONS

No Key Events Scheduled


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