Forex - Asia Open - Overnight Highlights


 23:44 (GMT) 09 Sep

  [Forex Highlights]

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

Asia Overnight Highlights - 10 Sept 2019

MAJORS

FX Highlights:

GBP weakened early in Europe but recovered strongly, helped by better than expected GDP data. GBP/USD peaked at 1.2382 and while a brief correction was seen on the news Speaker Bercow (who helped enable Parliament to oppose a no deal Brexit) was to resign, it remained firm. UK PM Johnson visiting Ireland expressed optimism that a Brexit deal can be done, but Irish PM Varadkar said that no backstop mean no deal for them.
EUR/USD advanced as far as 1.1067 on a report that Germany was mulling a shadow budget that would enable spending beyond domestic limits. The USD was generally weaker, losing ground against most risk-sensitive currencies, while gaining a touch against the JPY in more risk positive markets. Equities giving up their gains saw USD/JPY briefly below 107.00 but UST yields continued to support.
Data Overnight:

UK GDP rose 0.3% in July, with all sectors showing m/m rises, making a Q2/Q3 recession very unlikely if July is left unrevised. The July goods trade deficit was slightly smaller than expected at 9.14bn. German trade data showed a larger than expected surplus of EUR20.2bn in July, helped both by a rise in exports and a decline in imports.
Data Ahead:

The Australian confidence data will be a focus on Tuesday. The RBA chose to wait and see in the September meeting, but the confidence data will be on RBA's watch list to look for any pass-through from monetary policy stimulus to the business sector as post-tax cut optimism has faded. Conditions in the retail sector are at recessionary levels, increasing the downside risk to retail sales numbers, and will be key to watch. In the absence of significant changes in risk tone, near-term sentiment on the AUD might depend on the data.

- VIX index: 15.00 (-7.81%)

- Gold Spot: $1,506.54/oz (-0.01%)

- ICE Brent front contract: $61.77 (+$0.23)

- Nymex WTI front contract: $56.88 (+$0.36)

- Reuters/Jefferies Commodities Index: 172.62 (+0.16%)

- 10y UST: 1.560% (+0bp) (Asia morning)

- DJI: 26,797.46 (+0.26%); S&P: 2,978.71 (+0.09%); Nasdaq: 8,103.07 (-0.17%)

Data/Events Ahead:

Japan's final print of Q2 GDP will be out today. There is likely some downward revision of the preliminary print to take into account the latest capital spending and household consumption data. August Economic watchers survey will be out on the same day.

US Jul consumer credit will be out today as well.

We expect a 0.1% fall in the UK July monthly GDP update (at least in m/m terms) an outcome which would be a repeat of the June outcome.

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

EMERGING ASIA

FX Highlights:

Majority of the Asian currencies saw gains against the USD on Monday, as dollar weakened following disappointing non-farm payroll (NFP) data in August. IDR was the biggest winner, up 0.39% against the greenback. This was followed by KRW (0.32%), INR (0.26%), THB (0.11%) and PHP (0.10%). CNH and CNY were the biggest losers, down 0.32% and 0.25% respectively against the dollar, partially due to China's weak trade data in August. HKD, JPY, SGD and TWD were relatively unchanged. Malaysia's markets were closed on Monday due to a market holiday.

USD/CNH is retreating from the mild bid tone on Monday. Pair was last at 7.7.1195 after a week low of 7.0961 on Friday and a 7.1320 high on Monday. Next data point is China CPI and PPI data on Tuesday. This is likely to show elevated CPI pressures while factory prices fall again. Resistance of 7.1438 next to watch for.

1Y NDF remained last at 7.1851, within a narrow range during NY trading hours. On Monday, PBoC fixed mid-point at 7.0851 vs. previous close of 7.1150. USD/CNY was slightly higher on Monday, last at 7.1333. For USDCNY, it is likely to trade above 7.1000. A test of 7.1500 psychological big figure may pose further upside risks to 3 September high of 7.1847.

USD/SGD was relatively stable, last at 1.3803. It held just above the 1.3800 big figure during Monday's Asian session. Risks, however, were tilted slightly to the downside following dollar weakness, which was accentuated by weak U.S. data in last week's session. Focus for the week ahead will be Singapore's July retail sales data on Thursday. Eyes remain on the 1.3794 support. If broken, will turn our attention to the 1.3744 support next.

USD/IDR 1M NDF was stabilizing last at 14079 during NY session. Onshore spot remained below the key 14100 mark on Monday, amid a downbeat NFP weighing on the USD. The downside was extended to sub-14080 levels seen but a drop to sub-14050 levels was only seen in the afternoon with the pair printing fresh over 1-month lows of 14030 at last look amid optimism around US-China trade talks and China's stimulus measures helping to contain the growth downside. Clear risk to 14025 support followed by the 14000 big figure, upside will now be contained by 14180/190 area.

During the NY session, USD/INR 1M NDF was last inching up to 72.12. The onshore spot traded with an offered tone at the start of the new week, slipping to fresh MTD lows of 71.500 from previous close of 71.720. A downbeat NFP print on Friday weighed on the dollar, and further China stimulus measures also boosted sentiment. Meanwhile, hopes of further fiscal stimulus from FinMin Sitaraman kept the rupee in gains despite higher oil prices. Support at 71.375 is coming into view, break of which will open the doors for further correction to the 71 handle.

Data/Events Highlights:

Taiwan exports rose 2.6% y/y from a 0.5% fall a month ago. Trade surplus also surprised on the upside.

Data/Events Ahead:

China's August CPI and PPI is released today, where we expect continued factory price deflation and elevated consumer price pressures from food.

China's August monetary data is also due sometime this week.

DATA RELEASES DUE TODAY

01:00 GMT / 09:00 SGT - PH: Exports (Jul) 4cast: 2.1% y/y [Mkt: 1.9, Prev: 1.5]

01:00 GMT / 09:00 SGT - PH: Imports (Jul) 4cast: -4.1% y/y [Mkt: -5, Prev: -10.4]

01:00 GMT / 09:00 SGT - PH: Trade Balance (Jul) 4cast: -3482USD mn [Mkt: -3327, Prev: -2473]

01:30 GMT / 09:30 SGT - AU: NAB Business Conditions (Aug) [Prev: 2]

01:30 GMT / 09:30 SGT - AU: NAB Business Confidence (Sep) [Prev: 4]

01:30 GMT / 09:30 SGT - CN: CPI (Aug) 4cast: 2.7% y/y [Mkt: 2.6, Prev: 2.8]

01:30 GMT / 09:30 SGT - CN: PPI (Aug) 4cast: -0.5% y/y [Mkt: -0.9, Prev: -0.3]

08:30 GMT / 16:30 SGT - UK: ILO Unemployment Rate (Jul) 4cast: 4% [Mkt: 3.9, Prev: 3.9]

08:30 GMT / 16:30 SGT - UK: Average Earnings (incl. bonus) (Jul) 4cast: 3.7% 3m y/y [Mkt: 3.7, Prev: 3.7]

10:00 GMT / 18:00 SGT - US: NFIB Small Business Optimism (Aug) 4cast: 104 [Mkt: 103.5, Prev: 104.7]

12:15 GMT / 20:15 SGT - CA: Housing Starts (Aug) 4cast: 215k [Mkt: 212.5, Prev: 222]

12:30 GMT / 20:30 SGT - CA: Building permits (Jul) [Mkt: 2, Prev: -3.7]

23:00 GMT / 07:00 SGT - KR: Unemployment (sa) (Aug) 4cast: 4% y/y [Mkt: 4, Prev: 4]

EVENTS & AUCTIONS

09:30 GMT / 17:30 SGT - EU: ECB Main Refinancing Operation Result

15:30 GMT / 23:30 SGT - US: 52wk Bills Auction (USD 28bln)

17:00 GMT / 01:00 SGT - US: 3yr Notes Auction (USD 38bln)


Forex - India Flows: Rupee gains further despite higher oil


 05:09 (GMT) 09 Sep

 [Forex Flows]

USD/INR onshore spot traded with an offered tone at the start of the new week, slipping to fresh MTD lows of 71.530 in early trading from previous close of 71.720. A downbeat NFP print on Friday weighed on the dollar, and further China stimulus measures are supporting Asian currencies this morning. Meanwhile, hopes of further fiscal stimulus from FinMin Sitaraman kept the rupee in gains despite higher oil prices. Support at 71.375 is coming into view, break of which will open the doors for further correction to the 71 handle. 1M NDFs saw a rebound to 72+ levels earlier in the day, but were last seen back below the big figure. SENSEX in modest gains of over 0.3% at last check.


Forex - Flows: Singapore dollar horizonal moving from quiet day on the news front


 02:40 (GMT) 06 Sep

 [Forex Flows]

USD/SGD has remained relatively range bound on Friday. This comes as most Asia stock indices are up after opening. STI up 0.52%. Not much updates to move markets for the time being. USD/SGD last at 1.3842. A break of the 1.3900 will be needed to test the high of 1.3942 seen on 3 September. SGD NEER estimated at 0.836% above mid point.


Forex - Asia Close Highlights


 08:55 (GMT) 05 Sep

 [Forex Highlights]

05 September 2019

Regional Backdrop:

News on US-China trade talks helped improve Asian currencies on Thursday. KRW was up 0.65%, leading the pack. INR (0.35%), TWD (0.30%), MYR (0.26%) also saw some gains. SGD and IDR underperformed, being slightly down in the session. In the Philippines, inflation eased to a three-year low in August, which helped weaken PHP by 0.05% for the session.

USD/CNH saw an offered tone continuing on Thursday. Pair went to 7.1216 low after being as high as 7.1900 48 hours ago. Pair last at 7.1402. China has announced that officials will travel to Washington early next month for talks. This has helped improve risk sentiment. Lower level talks will start ahead of these meetings. PBoC fixed mid-point at 7.0852 vs. previous close of 7.1450. USD/CNY gapped lower, albeit slightly creeping up to 7.1340 at last look. 1Y NDF last at 7.1943.

Singapore dollar extended its rally for the second day, as sentiment improved on US-China trade news. The top trade negotiators from both sides are set to meet again in early October, and Chinese yuan rallied on the news. USD/SGD slipped to 1.3834 after a sharp fall yesterday. Based on our estimates, SGD NEER is currently at 0.87% above the midpoint.

USD/IDR onshore spot extended the downside to sub-14150 levels earlier on Thursday, printing fresh over 1-month lows of 14143. Risk-on mood continued after the manufacturing contraction on Tuesday as Fed Williams commented that the US economy is looking weaker than expected. Pair however moved back to 14160-levels in the afternoon.

USD/INR onshore spot gapped lower to open at 71.860 on Thursday from previous close of 72.115, slipping back below the key 72 handle. Pair printed lows of 71.850 in early trading and was last seen trading close to 71.900. Recovery in risk sentiment globally with more calls for Fed rate cuts and October trade talks on the horizon possibly helped the rupee.

Market Psychology

USD/CNH - The break of 7.1390 support turns attention to next 7.0995 support. For USD/CNY, the move below will likely test 7.1000 big figure psychological support if it persists.

USD/SGD - Pair is likely to continue to be driven by trade headlines, with eyes on the support at 1.3800 level.

USD/IDR - Break of the 14170 support may take the pair to lows of 14122 if global risk-on mood prevails.

USD/INR - The downside below 72 remains shallow amid domestic headwinds. We do not see any risk to the 71.375 support.


Forex - Asia Close Highlights


 08:55 (GMT) 05 Sep

 [Forex Highlights]

05 September 2019

Regional Backdrop:

News on US-China trade talks helped improve Asian currencies on Thursday. KRW was up 0.65%, leading the pack. INR (0.35%), TWD (0.30%), MYR (0.26%) also saw some gains. SGD and IDR underperformed, being slightly down in the session. In the Philippines, inflation eased to a three-year low in August, which helped weaken PHP by 0.05% for the session.

USD/CNH saw an offered tone continuing on Thursday. Pair went to 7.1216 low after being as high as 7.1900 48 hours ago. Pair last at 7.1402. China has announced that officials will travel to Washington early next month for talks. This has helped improve risk sentiment. Lower level talks will start ahead of these meetings. PBoC fixed mid-point at 7.0852 vs. previous close of 7.1450. USD/CNY gapped lower, albeit slightly creeping up to 7.1340 at last look. 1Y NDF last at 7.1943.

Singapore dollar extended its rally for the second day, as sentiment improved on US-China trade news. The top trade negotiators from both sides are set to meet again in early October, and Chinese yuan rallied on the news. USD/SGD slipped to 1.3834 after a sharp fall yesterday. Based on our estimates, SGD NEER is currently at 0.87% above the midpoint.

USD/IDR onshore spot extended the downside to sub-14150 levels earlier on Thursday, printing fresh over 1-month lows of 14143. Risk-on mood continued after the manufacturing contraction on Tuesday as Fed Williams commented that the US economy is looking weaker than expected. Pair however moved back to 14160-levels in the afternoon.

USD/INR onshore spot gapped lower to open at 71.860 on Thursday from previous close of 72.115, slipping back below the key 72 handle. Pair printed lows of 71.850 in early trading and was last seen trading close to 71.900. Recovery in risk sentiment globally with more calls for Fed rate cuts and October trade talks on the horizon possibly helped the rupee.

Market Psychology

USD/CNH - The break of 7.1390 support turns attention to next 7.0995 support. For USD/CNY, the move below will likely test 7.1000 big figure psychological support if it persists.

USD/SGD - Pair is likely to continue to be driven by trade headlines, with eyes on the support at 1.3800 level.

USD/IDR - Break of the 14170 support may take the pair to lows of 14122 if global risk-on mood prevails.

USD/INR - The downside below 72 remains shallow amid domestic headwinds. We do not see any risk to the 71.375 support.


Forex - Asia Close Highlights


 08:55 (GMT) 05 Sep

 [Forex Highlights]

05 September 2019

Regional Backdrop:

News on US-China trade talks helped improve Asian currencies on Thursday. KRW was up 0.65%, leading the pack. INR (0.35%), TWD (0.30%), MYR (0.26%) also saw some gains. SGD and IDR underperformed, being slightly down in the session. In the Philippines, inflation eased to a three-year low in August, which helped weaken PHP by 0.05% for the session.

USD/CNH saw an offered tone continuing on Thursday. Pair went to 7.1216 low after being as high as 7.1900 48 hours ago. Pair last at 7.1402. China has announced that officials will travel to Washington early next month for talks. This has helped improve risk sentiment. Lower level talks will start ahead of these meetings. PBoC fixed mid-point at 7.0852 vs. previous close of 7.1450. USD/CNY gapped lower, albeit slightly creeping up to 7.1340 at last look. 1Y NDF last at 7.1943.

Singapore dollar extended its rally for the second day, as sentiment improved on US-China trade news. The top trade negotiators from both sides are set to meet again in early October, and Chinese yuan rallied on the news. USD/SGD slipped to 1.3834 after a sharp fall yesterday. Based on our estimates, SGD NEER is currently at 0.87% above the midpoint.

USD/IDR onshore spot extended the downside to sub-14150 levels earlier on Thursday, printing fresh over 1-month lows of 14143. Risk-on mood continued after the manufacturing contraction on Tuesday as Fed Williams commented that the US economy is looking weaker than expected. Pair however moved back to 14160-levels in the afternoon.

USD/INR onshore spot gapped lower to open at 71.860 on Thursday from previous close of 72.115, slipping back below the key 72 handle. Pair printed lows of 71.850 in early trading and was last seen trading close to 71.900. Recovery in risk sentiment globally with more calls for Fed rate cuts and October trade talks on the horizon possibly helped the rupee.

Market Psychology

USD/CNH - The break of 7.1390 support turns attention to next 7.0995 support. For USD/CNY, the move below will likely test 7.1000 big figure psychological support if it persists.

USD/SGD - Pair is likely to continue to be driven by trade headlines, with eyes on the support at 1.3800 level.

USD/IDR - Break of the 14170 support may take the pair to lows of 14122 if global risk-on mood prevails.

USD/INR - The downside below 72 remains shallow amid domestic headwinds. We do not see any risk to the 71.375 support.


Forex - Asia Close Highlights


 08:55 (GMT) 05 Sep

 [Forex Highlights]

05 September 2019

Regional Backdrop:

News on US-China trade talks helped improve Asian currencies on Thursday. KRW was up 0.65%, leading the pack. INR (0.35%), TWD (0.30%), MYR (0.26%) also saw some gains. SGD and IDR underperformed, being slightly down in the session. In the Philippines, inflation eased to a three-year low in August, which helped weaken PHP by 0.05% for the session.

USD/CNH saw an offered tone continuing on Thursday. Pair went to 7.1216 low after being as high as 7.1900 48 hours ago. Pair last at 7.1402. China has announced that officials will travel to Washington early next month for talks. This has helped improve risk sentiment. Lower level talks will start ahead of these meetings. PBoC fixed mid-point at 7.0852 vs. previous close of 7.1450. USD/CNY gapped lower, albeit slightly creeping up to 7.1340 at last look. 1Y NDF last at 7.1943.

Singapore dollar extended its rally for the second day, as sentiment improved on US-China trade news. The top trade negotiators from both sides are set to meet again in early October, and Chinese yuan rallied on the news. USD/SGD slipped to 1.3834 after a sharp fall yesterday. Based on our estimates, SGD NEER is currently at 0.87% above the midpoint.

USD/IDR onshore spot extended the downside to sub-14150 levels earlier on Thursday, printing fresh over 1-month lows of 14143. Risk-on mood continued after the manufacturing contraction on Tuesday as Fed Williams commented that the US economy is looking weaker than expected. Pair however moved back to 14160-levels in the afternoon.

USD/INR onshore spot gapped lower to open at 71.860 on Thursday from previous close of 72.115, slipping back below the key 72 handle. Pair printed lows of 71.850 in early trading and was last seen trading close to 71.900. Recovery in risk sentiment globally with more calls for Fed rate cuts and October trade talks on the horizon possibly helped the rupee.

Market Psychology

USD/CNH - The break of 7.1390 support turns attention to next 7.0995 support. For USD/CNY, the move below will likely test 7.1000 big figure psychological support if it persists.

USD/SGD - Pair is likely to continue to be driven by trade headlines, with eyes on the support at 1.3800 level.

USD/IDR - Break of the 14170 support may take the pair to lows of 14122 if global risk-on mood prevails.

USD/INR - The downside below 72 remains shallow amid domestic headwinds. We do not see any risk to the 71.375 support.


Forex - Chart USD/IDR Updates: Triggers deeper pullback on break of the 5-wk descending triangle


 02:49 (GMT) 05 Sep

 [Forex Charts]

Please view the story for more information...


Forex - Asia Open - Overnight Highlights


 23:48 (GMT) 04 Sep

 [Forex Highlights]

Asia Overnight Highlights - 05 Sept 2019

MAJORS

FX Highlights:

The Bloomberg dollar spot index traded lower on Wednesday as Fed Williams said the economy looks weaker than expected. The index extended the drop to 98.405 into the NY close.

EUR and GBP led the gains with declining concerns about a no-deal Brexit reducing the risk premia applied to Europe. AUD also extended overnight gains as equity markets rose, while the JPY and CHF weakened on the crosses. However, EUR/CHF fell back again in the afternoon to make new 2 year lows while USD/JPY saw highs above 106.40 in North America.

The BoC left rates unchanged as expected, but their fairly balanced statement was a little less dovish than expected, leading the markets to see slightly less chance of an October rate cut, though this is still seen as close to a 50-50 chance. USD/CAD fell around 70 pips in an initial response extending later to over a big figure, assisted by gains in oil. AUD/CAD slipped back below .90 despite AUD/USD reaching .68.

Incoming ECB chief Lagarde said the EZ economy faces near term risks with inflation persistently too low. Highly accommodative policy warranted for a prolonged period, but said mindful of negative effects of unconventional policies.

Data/Events Highlights:

- US Jul trade deficit fell to $54.0bn from %55.5bn vs $53.4bn exp.

- Fed's Williams said ready to act as appropriate.

- Bank of Canada left rates unchanged as exp, said trade conflict weighing more heavily than seen in Jul but also noted stronger than expected housing and rising wages.

- Fed's Beige Book said economy expanded at a modest pace.

- UK services PMI was weaker than expected, dropping to 50.6 in August, but this was broadly mid-range for the year. However, the drop in the composite PMI to 49.7 was the lowest since July 2016. The EZ composite PMI was revised slightly higher form the provisional estimate.

- VIX index: 17.33 (-11.85%)

- Gold Spot: $1,552.10/oz (-0.02%)

- ICE Brent front contract: $60.70 (+$2.44)

- Nymex WTI front contract: $56.09 ($-0.17)

- Reuters/Jefferies Commodities Index: 172.70 (+2.07%)

- 10y UST: 1.466% (+1bp) (Asia morning)

- DJI: 26,355.47 (+0.91%); S&P: 2,937.78 (+1.08%); Nasdaq: 7,976.88 (+1.30%)

Data/Events Ahead:

U.S. ADP private sector employment report is due today, and we expect a 140k increase. Weekly initial claims, final Q2 productivity and costs, and Jul factory orders will also be reported.

Eurozone construction PMI will be released.

In line with indications coming from survey data, we expect German businesses to have reported a 0.4% m/m fall in the number of orders in July.

EMERGING ASIA

FX Highlights:

Emerging Asia currencies had a relief rally on Wednesday. PHP and KRW gained 0.79% and 0.63% respectively. IDR (+0.48%), CNY (+0.46%) and SGD (+0.44%) followed. HKD strengthened and equity markets rallied following withdrawal of the extradition bill by HK Chief Executive Carrie Lam. Malaysia's trade data was stronger than expected, helping the MYR higher by 0.38% in the current session.

USD/CNH extended its losses on Thursday and fell to sub-7.1500 levels in late NY hours. 7.2000 resistance still key for any upsides. Support at 7.1437. China's stable CNY fixing remains the mitigating factor against volatility. USD/CNY onshore spot traded with a downside bias on Wednesday, printing lows of 7.1450 into the close. For USD/CNY, we see pair remaining mostly at the 7.1400-7.1800 range for the time being. 1Y NDFs also continued to be offered overnight on Wednesday, and was last seen testing the downside at 7.2100.

USD/SGD inched below the 1.3900 handle early on Wednesday and was sold off further to 1.3840-levels in late NY hours. The Monetary Authority of Singapore released a survey report on Wednesday, which indicated a lower market estimate for Singapore's 2019 economic growth at 0.6%. We expect pair to eye the 1.3836 support next but the downside remains fragile.

USD/IDR 1M NDFs slid below 14200 on Wednesday amid risk-on mood in the markets. Onshore spot traded a notch lower on Wednesday morning as the USD softened overnight after the ISM manufacturing data release. But a break below 14200 was only seen in the afternoon and the losses were extended after reports of HK extradition bill withdrawal. Pair printed over 1-month lows of 14160. Break of the 14170 support may take the pair to lows of 14122 if global risk-on mood prevails.

USD/INR 1M NDFs slid below 72.500 to trade around 72.300 in NY hours, remaining cautious of the gains in the rupee. Onshore spot gapped lower to open at 72.185 on Wednesday from previous close of 72.400 and YTD highs of 72.400 printed on Tuesday. Pair traded close to 72.200 levels in the morning as risk-on sentiment returned with US manufacturing slipping into contractionary territory. Pair extended the slide further in the afternoon and was seen testing the 72 handle but returned higher to close at 72.115. Some slippage below 72 may be seen but we do not see any risk to the 71.375 support.

Data/Events Highlights:

Malaysia's July export and import growth surprised on the upside as they were stronger than expected at 1.7% y/y and -5.9% y/y respectively. This led to an expansion of trade surplus to MYR 14.27 bn.

HK leader Carrie Lam withdrew the extradition bill, helping the recovery in equity markets, but did not accede to any of the other demands of the protesters.

Data/Events Ahead:

Philippines' August inflation is due on Thursday and we expect a modest deceleration to 2.2% y/y from 2.4% y/y previously.

DATA RELEASES DUE TODAY

01:00 GMT / 09:00 SGT - PH: CPI (Aug) 4cast: 2.2% y/y [Mkt: 1.8, Prev: 2.4]

01:30 GMT / 09:30 SGT - AU: Trade Balance (Jul) 4cast: 5780 AUD mn [Mkt: 7000, Prev: 8036]

03:30 GMT / 11:30 SGT - TH: Consumer Confidence (Aug) [Prev: 75]

12:15 GMT / 20:15 SGT - US: ADP Employment Survey (Aug) 4cast: 140 k [Mkt: 146, Prev: 156]

12:30 GMT / 20:30 SGT - US: Unit Labor Costs (Q2 F) [Mkt: 2.5, Prev: 2.4]

12:30 GMT / 20:30 SGT - US: Non Farm Productivity (Q2 F) [Mkt: 2.3, Prev: 2.3]

12:30 GMT / 20:30 SGT - US: Initial Claims (31-Aug) [Mkt: 215, Prev: 215]

14:00 GMT / 22:00 SGT - US: Durable Ex Transportation (Jul F) [Mkt: -0.4, Prev: -0.4]

14:00 GMT / 22:00 SGT - US: Durable Goods Orders (Jul F) [Mkt: 2.1, Prev: 2.1]

14:00 GMT / 22:00 SGT - US: Factory Orders (Jul) [Mkt: 1, Prev: 0.6]

14:00 GMT / 22:00 SGT - US: ISM Non-Manufacturing (Aug) 4cast: 54.5 [Mkt: 54, Prev: 53.7]

EVENTS & AUCTIONS

03:35 GMT / 11:35 SGT - JP: 30yr Bonds Auction

07:00 GMT / 15:00 SGT - EU: ECB's Guindos speaks in Frankfurt

09:30 GMT / 17:30 SGT - UK: 2025 Bond Auction (GBP 3bln)

16:00 GMT / 00:00 SGT - CA: Bank of Canada's Schembri speaks in Nova Scotia


Forex - Asia Open - Overnight Highlights


 23:48 (GMT) 04 Sep

 [Forex Highlights]

Asia Overnight Highlights - 05 Sept 2019

MAJORS

FX Highlights:

The Bloomberg dollar spot index traded lower on Wednesday as Fed Williams said the economy looks weaker than expected. The index extended the drop to 98.405 into the NY close.

EUR and GBP led the gains with declining concerns about a no-deal Brexit reducing the risk premia applied to Europe. AUD also extended overnight gains as equity markets rose, while the JPY and CHF weakened on the crosses. However, EUR/CHF fell back again in the afternoon to make new 2 year lows while USD/JPY saw highs above 106.40 in North America.

The BoC left rates unchanged as expected, but their fairly balanced statement was a little less dovish than expected, leading the markets to see slightly less chance of an October rate cut, though this is still seen as close to a 50-50 chance. USD/CAD fell around 70 pips in an initial response extending later to over a big figure, assisted by gains in oil. AUD/CAD slipped back below .90 despite AUD/USD reaching .68.

Incoming ECB chief Lagarde said the EZ economy faces near term risks with inflation persistently too low. Highly accommodative policy warranted for a prolonged period, but said mindful of negative effects of unconventional policies.

Data/Events Highlights:

- US Jul trade deficit fell to $54.0bn from %55.5bn vs $53.4bn exp.

- Fed's Williams said ready to act as appropriate.

- Bank of Canada left rates unchanged as exp, said trade conflict weighing more heavily than seen in Jul but also noted stronger than expected housing and rising wages.

- Fed's Beige Book said economy expanded at a modest pace.

- UK services PMI was weaker than expected, dropping to 50.6 in August, but this was broadly mid-range for the year. However, the drop in the composite PMI to 49.7 was the lowest since July 2016. The EZ composite PMI was revised slightly higher form the provisional estimate.

- VIX index: 17.33 (-11.85%)

- Gold Spot: $1,552.10/oz (-0.02%)

- ICE Brent front contract: $60.70 (+$2.44)

- Nymex WTI front contract: $56.09 ($-0.17)

- Reuters/Jefferies Commodities Index: 172.70 (+2.07%)

- 10y UST: 1.466% (+1bp) (Asia morning)

- DJI: 26,355.47 (+0.91%); S&P: 2,937.78 (+1.08%); Nasdaq: 7,976.88 (+1.30%)

Data/Events Ahead:

U.S. ADP private sector employment report is due today, and we expect a 140k increase. Weekly initial claims, final Q2 productivity and costs, and Jul factory orders will also be reported.

Eurozone construction PMI will be released.

In line with indications coming from survey data, we expect German businesses to have reported a 0.4% m/m fall in the number of orders in July.

EMERGING ASIA

FX Highlights:

Emerging Asia currencies had a relief rally on Wednesday. PHP and KRW gained 0.79% and 0.63% respectively. IDR (+0.48%), CNY (+0.46%) and SGD (+0.44%) followed. HKD strengthened and equity markets rallied following withdrawal of the extradition bill by HK Chief Executive Carrie Lam. Malaysia's trade data was stronger than expected, helping the MYR higher by 0.38% in the current session.

USD/CNH extended its losses on Thursday and fell to sub-7.1500 levels in late NY hours. 7.2000 resistance still key for any upsides. Support at 7.1437. China's stable CNY fixing remains the mitigating factor against volatility. USD/CNY onshore spot traded with a downside bias on Wednesday, printing lows of 7.1450 into the close. For USD/CNY, we see pair remaining mostly at the 7.1400-7.1800 range for the time being. 1Y NDFs also continued to be offered overnight on Wednesday, and was last seen testing the downside at 7.2100.

USD/SGD inched below the 1.3900 handle early on Wednesday and was sold off further to 1.3840-levels in late NY hours. The Monetary Authority of Singapore released a survey report on Wednesday, which indicated a lower market estimate for Singapore's 2019 economic growth at 0.6%. We expect pair to eye the 1.3836 support next but the downside remains fragile.

USD/IDR 1M NDFs slid below 14200 on Wednesday amid risk-on mood in the markets. Onshore spot traded a notch lower on Wednesday morning as the USD softened overnight after the ISM manufacturing data release. But a break below 14200 was only seen in the afternoon and the losses were extended after reports of HK extradition bill withdrawal. Pair printed over 1-month lows of 14160. Break of the 14170 support may take the pair to lows of 14122 if global risk-on mood prevails.

USD/INR 1M NDFs slid below 72.500 to trade around 72.300 in NY hours, remaining cautious of the gains in the rupee. Onshore spot gapped lower to open at 72.185 on Wednesday from previous close of 72.400 and YTD highs of 72.400 printed on Tuesday. Pair traded close to 72.200 levels in the morning as risk-on sentiment returned with US manufacturing slipping into contractionary territory. Pair extended the slide further in the afternoon and was seen testing the 72 handle but returned higher to close at 72.115. Some slippage below 72 may be seen but we do not see any risk to the 71.375 support.

Data/Events Highlights:

Malaysia's July export and import growth surprised on the upside as they were stronger than expected at 1.7% y/y and -5.9% y/y respectively. This led to an expansion of trade surplus to MYR 14.27 bn.

HK leader Carrie Lam withdrew the extradition bill, helping the recovery in equity markets, but did not accede to any of the other demands of the protesters.

Data/Events Ahead:

Philippines' August inflation is due on Thursday and we expect a modest deceleration to 2.2% y/y from 2.4% y/y previously.

DATA RELEASES DUE TODAY

01:00 GMT / 09:00 SGT - PH: CPI (Aug) 4cast: 2.2% y/y [Mkt: 1.8, Prev: 2.4]

01:30 GMT / 09:30 SGT - AU: Trade Balance (Jul) 4cast: 5780 AUD mn [Mkt: 7000, Prev: 8036]

03:30 GMT / 11:30 SGT - TH: Consumer Confidence (Aug) [Prev: 75]

12:15 GMT / 20:15 SGT - US: ADP Employment Survey (Aug) 4cast: 140 k [Mkt: 146, Prev: 156]

12:30 GMT / 20:30 SGT - US: Unit Labor Costs (Q2 F) [Mkt: 2.5, Prev: 2.4]

12:30 GMT / 20:30 SGT - US: Non Farm Productivity (Q2 F) [Mkt: 2.3, Prev: 2.3]

12:30 GMT / 20:30 SGT - US: Initial Claims (31-Aug) [Mkt: 215, Prev: 215]

14:00 GMT / 22:00 SGT - US: Durable Ex Transportation (Jul F) [Mkt: -0.4, Prev: -0.4]

14:00 GMT / 22:00 SGT - US: Durable Goods Orders (Jul F) [Mkt: 2.1, Prev: 2.1]

14:00 GMT / 22:00 SGT - US: Factory Orders (Jul) [Mkt: 1, Prev: 0.6]

14:00 GMT / 22:00 SGT - US: ISM Non-Manufacturing (Aug) 4cast: 54.5 [Mkt: 54, Prev: 53.7]

EVENTS & AUCTIONS

03:35 GMT / 11:35 SGT - JP: 30yr Bonds Auction

07:00 GMT / 15:00 SGT - EU: ECB's Guindos speaks in Frankfurt

09:30 GMT / 17:30 SGT - UK: 2025 Bond Auction (GBP 3bln)

16:00 GMT / 00:00 SGT - CA: Bank of Canada's Schembri speaks in Nova Scotia


Forex - Asia Open - Overnight Highlights


 23:48 (GMT) 04 Sep

 [Forex Highlights]

Asia Overnight Highlights - 05 Sept 2019

MAJORS

FX Highlights:

The Bloomberg dollar spot index traded lower on Wednesday as Fed Williams said the economy looks weaker than expected. The index extended the drop to 98.405 into the NY close.

EUR and GBP led the gains with declining concerns about a no-deal Brexit reducing the risk premia applied to Europe. AUD also extended overnight gains as equity markets rose, while the JPY and CHF weakened on the crosses. However, EUR/CHF fell back again in the afternoon to make new 2 year lows while USD/JPY saw highs above 106.40 in North America.

The BoC left rates unchanged as expected, but their fairly balanced statement was a little less dovish than expected, leading the markets to see slightly less chance of an October rate cut, though this is still seen as close to a 50-50 chance. USD/CAD fell around 70 pips in an initial response extending later to over a big figure, assisted by gains in oil. AUD/CAD slipped back below .90 despite AUD/USD reaching .68.

Incoming ECB chief Lagarde said the EZ economy faces near term risks with inflation persistently too low. Highly accommodative policy warranted for a prolonged period, but said mindful of negative effects of unconventional policies.

Data/Events Highlights:

- US Jul trade deficit fell to $54.0bn from %55.5bn vs $53.4bn exp.

- Fed's Williams said ready to act as appropriate.

- Bank of Canada left rates unchanged as exp, said trade conflict weighing more heavily than seen in Jul but also noted stronger than expected housing and rising wages.

- Fed's Beige Book said economy expanded at a modest pace.

- UK services PMI was weaker than expected, dropping to 50.6 in August, but this was broadly mid-range for the year. However, the drop in the composite PMI to 49.7 was the lowest since July 2016. The EZ composite PMI was revised slightly higher form the provisional estimate.

- VIX index: 17.33 (-11.85%)

- Gold Spot: $1,552.10/oz (-0.02%)

- ICE Brent front contract: $60.70 (+$2.44)

- Nymex WTI front contract: $56.09 ($-0.17)

- Reuters/Jefferies Commodities Index: 172.70 (+2.07%)

- 10y UST: 1.466% (+1bp) (Asia morning)

- DJI: 26,355.47 (+0.91%); S&P: 2,937.78 (+1.08%); Nasdaq: 7,976.88 (+1.30%)

Data/Events Ahead:

U.S. ADP private sector employment report is due today, and we expect a 140k increase. Weekly initial claims, final Q2 productivity and costs, and Jul factory orders will also be reported.

Eurozone construction PMI will be released.

In line with indications coming from survey data, we expect German businesses to have reported a 0.4% m/m fall in the number of orders in July.

EMERGING ASIA

FX Highlights:

Emerging Asia currencies had a relief rally on Wednesday. PHP and KRW gained 0.79% and 0.63% respectively. IDR (+0.48%), CNY (+0.46%) and SGD (+0.44%) followed. HKD strengthened and equity markets rallied following withdrawal of the extradition bill by HK Chief Executive Carrie Lam. Malaysia's trade data was stronger than expected, helping the MYR higher by 0.38% in the current session.

USD/CNH extended its losses on Thursday and fell to sub-7.1500 levels in late NY hours. 7.2000 resistance still key for any upsides. Support at 7.1437. China's stable CNY fixing remains the mitigating factor against volatility. USD/CNY onshore spot traded with a downside bias on Wednesday, printing lows of 7.1450 into the close. For USD/CNY, we see pair remaining mostly at the 7.1400-7.1800 range for the time being. 1Y NDFs also continued to be offered overnight on Wednesday, and was last seen testing the downside at 7.2100.

USD/SGD inched below the 1.3900 handle early on Wednesday and was sold off further to 1.3840-levels in late NY hours. The Monetary Authority of Singapore released a survey report on Wednesday, which indicated a lower market estimate for Singapore's 2019 economic growth at 0.6%. We expect pair to eye the 1.3836 support next but the downside remains fragile.

USD/IDR 1M NDFs slid below 14200 on Wednesday amid risk-on mood in the markets. Onshore spot traded a notch lower on Wednesday morning as the USD softened overnight after the ISM manufacturing data release. But a break below 14200 was only seen in the afternoon and the losses were extended after reports of HK extradition bill withdrawal. Pair printed over 1-month lows of 14160. Break of the 14170 support may take the pair to lows of 14122 if global risk-on mood prevails.

USD/INR 1M NDFs slid below 72.500 to trade around 72.300 in NY hours, remaining cautious of the gains in the rupee. Onshore spot gapped lower to open at 72.185 on Wednesday from previous close of 72.400 and YTD highs of 72.400 printed on Tuesday. Pair traded close to 72.200 levels in the morning as risk-on sentiment returned with US manufacturing slipping into contractionary territory. Pair extended the slide further in the afternoon and was seen testing the 72 handle but returned higher to close at 72.115. Some slippage below 72 may be seen but we do not see any risk to the 71.375 support.

Data/Events Highlights:

Malaysia's July export and import growth surprised on the upside as they were stronger than expected at 1.7% y/y and -5.9% y/y respectively. This led to an expansion of trade surplus to MYR 14.27 bn.

HK leader Carrie Lam withdrew the extradition bill, helping the recovery in equity markets, but did not accede to any of the other demands of the protesters.

Data/Events Ahead:

Philippines' August inflation is due on Thursday and we expect a modest deceleration to 2.2% y/y from 2.4% y/y previously.

DATA RELEASES DUE TODAY

01:00 GMT / 09:00 SGT - PH: CPI (Aug) 4cast: 2.2% y/y [Mkt: 1.8, Prev: 2.4]

01:30 GMT / 09:30 SGT - AU: Trade Balance (Jul) 4cast: 5780 AUD mn [Mkt: 7000, Prev: 8036]

03:30 GMT / 11:30 SGT - TH: Consumer Confidence (Aug) [Prev: 75]

12:15 GMT / 20:15 SGT - US: ADP Employment Survey (Aug) 4cast: 140 k [Mkt: 146, Prev: 156]

12:30 GMT / 20:30 SGT - US: Unit Labor Costs (Q2 F) [Mkt: 2.5, Prev: 2.4]

12:30 GMT / 20:30 SGT - US: Non Farm Productivity (Q2 F) [Mkt: 2.3, Prev: 2.3]

12:30 GMT / 20:30 SGT - US: Initial Claims (31-Aug) [Mkt: 215, Prev: 215]

14:00 GMT / 22:00 SGT - US: Durable Ex Transportation (Jul F) [Mkt: -0.4, Prev: -0.4]

14:00 GMT / 22:00 SGT - US: Durable Goods Orders (Jul F) [Mkt: 2.1, Prev: 2.1]

14:00 GMT / 22:00 SGT - US: Factory Orders (Jul) [Mkt: 1, Prev: 0.6]

14:00 GMT / 22:00 SGT - US: ISM Non-Manufacturing (Aug) 4cast: 54.5 [Mkt: 54, Prev: 53.7]

EVENTS & AUCTIONS

03:35 GMT / 11:35 SGT - JP: 30yr Bonds Auction

07:00 GMT / 15:00 SGT - EU: ECB's Guindos speaks in Frankfurt

09:30 GMT / 17:30 SGT - UK: 2025 Bond Auction (GBP 3bln)

16:00 GMT / 00:00 SGT - CA: Bank of Canada's Schembri speaks in Nova Scotia


Forex - Asia Open - Overnight Highlights


 23:48 (GMT) 04 Sep

 [Forex Highlights]

Asia Overnight Highlights - 05 Sept 2019

MAJORS

FX Highlights:

The Bloomberg dollar spot index traded lower on Wednesday as Fed Williams said the economy looks weaker than expected. The index extended the drop to 98.405 into the NY close.

EUR and GBP led the gains with declining concerns about a no-deal Brexit reducing the risk premia applied to Europe. AUD also extended overnight gains as equity markets rose, while the JPY and CHF weakened on the crosses. However, EUR/CHF fell back again in the afternoon to make new 2 year lows while USD/JPY saw highs above 106.40 in North America.

The BoC left rates unchanged as expected, but their fairly balanced statement was a little less dovish than expected, leading the markets to see slightly less chance of an October rate cut, though this is still seen as close to a 50-50 chance. USD/CAD fell around 70 pips in an initial response extending later to over a big figure, assisted by gains in oil. AUD/CAD slipped back below .90 despite AUD/USD reaching .68.

Incoming ECB chief Lagarde said the EZ economy faces near term risks with inflation persistently too low. Highly accommodative policy warranted for a prolonged period, but said mindful of negative effects of unconventional policies.

Data/Events Highlights:

- US Jul trade deficit fell to $54.0bn from %55.5bn vs $53.4bn exp.

- Fed's Williams said ready to act as appropriate.

- Bank of Canada left rates unchanged as exp, said trade conflict weighing more heavily than seen in Jul but also noted stronger than expected housing and rising wages.

- Fed's Beige Book said economy expanded at a modest pace.

- UK services PMI was weaker than expected, dropping to 50.6 in August, but this was broadly mid-range for the year. However, the drop in the composite PMI to 49.7 was the lowest since July 2016. The EZ composite PMI was revised slightly higher form the provisional estimate.

- VIX index: 17.33 (-11.85%)

- Gold Spot: $1,552.10/oz (-0.02%)

- ICE Brent front contract: $60.70 (+$2.44)

- Nymex WTI front contract: $56.09 ($-0.17)

- Reuters/Jefferies Commodities Index: 172.70 (+2.07%)

- 10y UST: 1.466% (+1bp) (Asia morning)

- DJI: 26,355.47 (+0.91%); S&P: 2,937.78 (+1.08%); Nasdaq: 7,976.88 (+1.30%)

Data/Events Ahead:

U.S. ADP private sector employment report is due today, and we expect a 140k increase. Weekly initial claims, final Q2 productivity and costs, and Jul factory orders will also be reported.

Eurozone construction PMI will be released.

In line with indications coming from survey data, we expect German businesses to have reported a 0.4% m/m fall in the number of orders in July.

EMERGING ASIA

FX Highlights:

Emerging Asia currencies had a relief rally on Wednesday. PHP and KRW gained 0.79% and 0.63% respectively. IDR (+0.48%), CNY (+0.46%) and SGD (+0.44%) followed. HKD strengthened and equity markets rallied following withdrawal of the extradition bill by HK Chief Executive Carrie Lam. Malaysia's trade data was stronger than expected, helping the MYR higher by 0.38% in the current session.

USD/CNH extended its losses on Thursday and fell to sub-7.1500 levels in late NY hours. 7.2000 resistance still key for any upsides. Support at 7.1437. China's stable CNY fixing remains the mitigating factor against volatility. USD/CNY onshore spot traded with a downside bias on Wednesday, printing lows of 7.1450 into the close. For USD/CNY, we see pair remaining mostly at the 7.1400-7.1800 range for the time being. 1Y NDFs also continued to be offered overnight on Wednesday, and was last seen testing the downside at 7.2100.

USD/SGD inched below the 1.3900 handle early on Wednesday and was sold off further to 1.3840-levels in late NY hours. The Monetary Authority of Singapore released a survey report on Wednesday, which indicated a lower market estimate for Singapore's 2019 economic growth at 0.6%. We expect pair to eye the 1.3836 support next but the downside remains fragile.

USD/IDR 1M NDFs slid below 14200 on Wednesday amid risk-on mood in the markets. Onshore spot traded a notch lower on Wednesday morning as the USD softened overnight after the ISM manufacturing data release. But a break below 14200 was only seen in the afternoon and the losses were extended after reports of HK extradition bill withdrawal. Pair printed over 1-month lows of 14160. Break of the 14170 support may take the pair to lows of 14122 if global risk-on mood prevails.

USD/INR 1M NDFs slid below 72.500 to trade around 72.300 in NY hours, remaining cautious of the gains in the rupee. Onshore spot gapped lower to open at 72.185 on Wednesday from previous close of 72.400 and YTD highs of 72.400 printed on Tuesday. Pair traded close to 72.200 levels in the morning as risk-on sentiment returned with US manufacturing slipping into contractionary territory. Pair extended the slide further in the afternoon and was seen testing the 72 handle but returned higher to close at 72.115. Some slippage below 72 may be seen but we do not see any risk to the 71.375 support.

Data/Events Highlights:

Malaysia's July export and import growth surprised on the upside as they were stronger than expected at 1.7% y/y and -5.9% y/y respectively. This led to an expansion of trade surplus to MYR 14.27 bn.

HK leader Carrie Lam withdrew the extradition bill, helping the recovery in equity markets, but did not accede to any of the other demands of the protesters.

Data/Events Ahead:

Philippines' August inflation is due on Thursday and we expect a modest deceleration to 2.2% y/y from 2.4% y/y previously.

DATA RELEASES DUE TODAY

01:00 GMT / 09:00 SGT - PH: CPI (Aug) 4cast: 2.2% y/y [Mkt: 1.8, Prev: 2.4]

01:30 GMT / 09:30 SGT - AU: Trade Balance (Jul) 4cast: 5780 AUD mn [Mkt: 7000, Prev: 8036]

03:30 GMT / 11:30 SGT - TH: Consumer Confidence (Aug) [Prev: 75]

12:15 GMT / 20:15 SGT - US: ADP Employment Survey (Aug) 4cast: 140 k [Mkt: 146, Prev: 156]

12:30 GMT / 20:30 SGT - US: Unit Labor Costs (Q2 F) [Mkt: 2.5, Prev: 2.4]

12:30 GMT / 20:30 SGT - US: Non Farm Productivity (Q2 F) [Mkt: 2.3, Prev: 2.3]

12:30 GMT / 20:30 SGT - US: Initial Claims (31-Aug) [Mkt: 215, Prev: 215]

14:00 GMT / 22:00 SGT - US: Durable Ex Transportation (Jul F) [Mkt: -0.4, Prev: -0.4]

14:00 GMT / 22:00 SGT - US: Durable Goods Orders (Jul F) [Mkt: 2.1, Prev: 2.1]

14:00 GMT / 22:00 SGT - US: Factory Orders (Jul) [Mkt: 1, Prev: 0.6]

14:00 GMT / 22:00 SGT - US: ISM Non-Manufacturing (Aug) 4cast: 54.5 [Mkt: 54, Prev: 53.7]

EVENTS & AUCTIONS

03:35 GMT / 11:35 SGT - JP: 30yr Bonds Auction

07:00 GMT / 15:00 SGT - EU: ECB's Guindos speaks in Frankfurt

09:30 GMT / 17:30 SGT - UK: 2025 Bond Auction (GBP 3bln)

16:00 GMT / 00:00 SGT - CA: Bank of Canada's Schembri speaks in Nova Scotia


Forex - Asia Open - Overnight Highlights


 23:48 (GMT) 04 Sep

 [Forex Highlights]

Asia Overnight Highlights - 05 Sept 2019

MAJORS

FX Highlights:

The Bloomberg dollar spot index traded lower on Wednesday as Fed Williams said the economy looks weaker than expected. The index extended the drop to 98.405 into the NY close.

EUR and GBP led the gains with declining concerns about a no-deal Brexit reducing the risk premia applied to Europe. AUD also extended overnight gains as equity markets rose, while the JPY and CHF weakened on the crosses. However, EUR/CHF fell back again in the afternoon to make new 2 year lows while USD/JPY saw highs above 106.40 in North America.

The BoC left rates unchanged as expected, but their fairly balanced statement was a little less dovish than expected, leading the markets to see slightly less chance of an October rate cut, though this is still seen as close to a 50-50 chance. USD/CAD fell around 70 pips in an initial response extending later to over a big figure, assisted by gains in oil. AUD/CAD slipped back below .90 despite AUD/USD reaching .68.

Incoming ECB chief Lagarde said the EZ economy faces near term risks with inflation persistently too low. Highly accommodative policy warranted for a prolonged period, but said mindful of negative effects of unconventional policies.

Data/Events Highlights:

- US Jul trade deficit fell to $54.0bn from %55.5bn vs $53.4bn exp.

- Fed's Williams said ready to act as appropriate.

- Bank of Canada left rates unchanged as exp, said trade conflict weighing more heavily than seen in Jul but also noted stronger than expected housing and rising wages.

- Fed's Beige Book said economy expanded at a modest pace.

- UK services PMI was weaker than expected, dropping to 50.6 in August, but this was broadly mid-range for the year. However, the drop in the composite PMI to 49.7 was the lowest since July 2016. The EZ composite PMI was revised slightly higher form the provisional estimate.

- VIX index: 17.33 (-11.85%)

- Gold Spot: $1,552.10/oz (-0.02%)

- ICE Brent front contract: $60.70 (+$2.44)

- Nymex WTI front contract: $56.09 ($-0.17)

- Reuters/Jefferies Commodities Index: 172.70 (+2.07%)

- 10y UST: 1.466% (+1bp) (Asia morning)

- DJI: 26,355.47 (+0.91%); S&P: 2,937.78 (+1.08%); Nasdaq: 7,976.88 (+1.30%)

Data/Events Ahead:

U.S. ADP private sector employment report is due today, and we expect a 140k increase. Weekly initial claims, final Q2 productivity and costs, and Jul factory orders will also be reported.

Eurozone construction PMI will be released.

In line with indications coming from survey data, we expect German businesses to have reported a 0.4% m/m fall in the number of orders in July.

EMERGING ASIA

FX Highlights:

Emerging Asia currencies had a relief rally on Wednesday. PHP and KRW gained 0.79% and 0.63% respectively. IDR (+0.48%), CNY (+0.46%) and SGD (+0.44%) followed. HKD strengthened and equity markets rallied following withdrawal of the extradition bill by HK Chief Executive Carrie Lam. Malaysia's trade data was stronger than expected, helping the MYR higher by 0.38% in the current session.

USD/CNH extended its losses on Thursday and fell to sub-7.1500 levels in late NY hours. 7.2000 resistance still key for any upsides. Support at 7.1437. China's stable CNY fixing remains the mitigating factor against volatility. USD/CNY onshore spot traded with a downside bias on Wednesday, printing lows of 7.1450 into the close. For USD/CNY, we see pair remaining mostly at the 7.1400-7.1800 range for the time being. 1Y NDFs also continued to be offered overnight on Wednesday, and was last seen testing the downside at 7.2100.

USD/SGD inched below the 1.3900 handle early on Wednesday and was sold off further to 1.3840-levels in late NY hours. The Monetary Authority of Singapore released a survey report on Wednesday, which indicated a lower market estimate for Singapore's 2019 economic growth at 0.6%. We expect pair to eye the 1.3836 support next but the downside remains fragile.

USD/IDR 1M NDFs slid below 14200 on Wednesday amid risk-on mood in the markets. Onshore spot traded a notch lower on Wednesday morning as the USD softened overnight after the ISM manufacturing data release. But a break below 14200 was only seen in the afternoon and the losses were extended after reports of HK extradition bill withdrawal. Pair printed over 1-month lows of 14160. Break of the 14170 support may take the pair to lows of 14122 if global risk-on mood prevails.

USD/INR 1M NDFs slid below 72.500 to trade around 72.300 in NY hours, remaining cautious of the gains in the rupee. Onshore spot gapped lower to open at 72.185 on Wednesday from previous close of 72.400 and YTD highs of 72.400 printed on Tuesday. Pair traded close to 72.200 levels in the morning as risk-on sentiment returned with US manufacturing slipping into contractionary territory. Pair extended the slide further in the afternoon and was seen testing the 72 handle but returned higher to close at 72.115. Some slippage below 72 may be seen but we do not see any risk to the 71.375 support.

Data/Events Highlights:

Malaysia's July export and import growth surprised on the upside as they were stronger than expected at 1.7% y/y and -5.9% y/y respectively. This led to an expansion of trade surplus to MYR 14.27 bn.

HK leader Carrie Lam withdrew the extradition bill, helping the recovery in equity markets, but did not accede to any of the other demands of the protesters.

Data/Events Ahead:

Philippines' August inflation is due on Thursday and we expect a modest deceleration to 2.2% y/y from 2.4% y/y previously.

DATA RELEASES DUE TODAY

01:00 GMT / 09:00 SGT - PH: CPI (Aug) 4cast: 2.2% y/y [Mkt: 1.8, Prev: 2.4]

01:30 GMT / 09:30 SGT - AU: Trade Balance (Jul) 4cast: 5780 AUD mn [Mkt: 7000, Prev: 8036]

03:30 GMT / 11:30 SGT - TH: Consumer Confidence (Aug) [Prev: 75]

12:15 GMT / 20:15 SGT - US: ADP Employment Survey (Aug) 4cast: 140 k [Mkt: 146, Prev: 156]

12:30 GMT / 20:30 SGT - US: Unit Labor Costs (Q2 F) [Mkt: 2.5, Prev: 2.4]

12:30 GMT / 20:30 SGT - US: Non Farm Productivity (Q2 F) [Mkt: 2.3, Prev: 2.3]

12:30 GMT / 20:30 SGT - US: Initial Claims (31-Aug) [Mkt: 215, Prev: 215]

14:00 GMT / 22:00 SGT - US: Durable Ex Transportation (Jul F) [Mkt: -0.4, Prev: -0.4]

14:00 GMT / 22:00 SGT - US: Durable Goods Orders (Jul F) [Mkt: 2.1, Prev: 2.1]

14:00 GMT / 22:00 SGT - US: Factory Orders (Jul) [Mkt: 1, Prev: 0.6]

14:00 GMT / 22:00 SGT - US: ISM Non-Manufacturing (Aug) 4cast: 54.5 [Mkt: 54, Prev: 53.7]

EVENTS & AUCTIONS

03:35 GMT / 11:35 SGT - JP: 30yr Bonds Auction

07:00 GMT / 15:00 SGT - EU: ECB's Guindos speaks in Frankfurt

09:30 GMT / 17:30 SGT - UK: 2025 Bond Auction (GBP 3bln)

16:00 GMT / 00:00 SGT - CA: Bank of Canada's Schembri speaks in Nova Scotia


Forex - Asia Open - Overnight Highlights


 23:48 (GMT) 04 Sep

 [Forex Highlights]

Asia Overnight Highlights - 05 Sept 2019

MAJORS

FX Highlights:

The Bloomberg dollar spot index traded lower on Wednesday as Fed Williams said the economy looks weaker than expected. The index extended the drop to 98.405 into the NY close.

EUR and GBP led the gains with declining concerns about a no-deal Brexit reducing the risk premia applied to Europe. AUD also extended overnight gains as equity markets rose, while the JPY and CHF weakened on the crosses. However, EUR/CHF fell back again in the afternoon to make new 2 year lows while USD/JPY saw highs above 106.40 in North America.

The BoC left rates unchanged as expected, but their fairly balanced statement was a little less dovish than expected, leading the markets to see slightly less chance of an October rate cut, though this is still seen as close to a 50-50 chance. USD/CAD fell around 70 pips in an initial response extending later to over a big figure, assisted by gains in oil. AUD/CAD slipped back below .90 despite AUD/USD reaching .68.

Incoming ECB chief Lagarde said the EZ economy faces near term risks with inflation persistently too low. Highly accommodative policy warranted for a prolonged period, but said mindful of negative effects of unconventional policies.

Data/Events Highlights:

- US Jul trade deficit fell to $54.0bn from %55.5bn vs $53.4bn exp.

- Fed's Williams said ready to act as appropriate.

- Bank of Canada left rates unchanged as exp, said trade conflict weighing more heavily than seen in Jul but also noted stronger than expected housing and rising wages.

- Fed's Beige Book said economy expanded at a modest pace.

- UK services PMI was weaker than expected, dropping to 50.6 in August, but this was broadly mid-range for the year. However, the drop in the composite PMI to 49.7 was the lowest since July 2016. The EZ composite PMI was revised slightly higher form the provisional estimate.

- VIX index: 17.33 (-11.85%)

- Gold Spot: $1,552.10/oz (-0.02%)

- ICE Brent front contract: $60.70 (+$2.44)

- Nymex WTI front contract: $56.09 ($-0.17)

- Reuters/Jefferies Commodities Index: 172.70 (+2.07%)

- 10y UST: 1.466% (+1bp) (Asia morning)

- DJI: 26,355.47 (+0.91%); S&P: 2,937.78 (+1.08%); Nasdaq: 7,976.88 (+1.30%)

Data/Events Ahead:

U.S. ADP private sector employment report is due today, and we expect a 140k increase. Weekly initial claims, final Q2 productivity and costs, and Jul factory orders will also be reported.

Eurozone construction PMI will be released.

In line with indications coming from survey data, we expect German businesses to have reported a 0.4% m/m fall in the number of orders in July.

EMERGING ASIA

FX Highlights:

Emerging Asia currencies had a relief rally on Wednesday. PHP and KRW gained 0.79% and 0.63% respectively. IDR (+0.48%), CNY (+0.46%) and SGD (+0.44%) followed. HKD strengthened and equity markets rallied following withdrawal of the extradition bill by HK Chief Executive Carrie Lam. Malaysia's trade data was stronger than expected, helping the MYR higher by 0.38% in the current session.

USD/CNH extended its losses on Thursday and fell to sub-7.1500 levels in late NY hours. 7.2000 resistance still key for any upsides. Support at 7.1437. China's stable CNY fixing remains the mitigating factor against volatility. USD/CNY onshore spot traded with a downside bias on Wednesday, printing lows of 7.1450 into the close. For USD/CNY, we see pair remaining mostly at the 7.1400-7.1800 range for the time being. 1Y NDFs also continued to be offered overnight on Wednesday, and was last seen testing the downside at 7.2100.

USD/SGD inched below the 1.3900 handle early on Wednesday and was sold off further to 1.3840-levels in late NY hours. The Monetary Authority of Singapore released a survey report on Wednesday, which indicated a lower market estimate for Singapore's 2019 economic growth at 0.6%. We expect pair to eye the 1.3836 support next but the downside remains fragile.

USD/IDR 1M NDFs slid below 14200 on Wednesday amid risk-on mood in the markets. Onshore spot traded a notch lower on Wednesday morning as the USD softened overnight after the ISM manufacturing data release. But a break below 14200 was only seen in the afternoon and the losses were extended after reports of HK extradition bill withdrawal. Pair printed over 1-month lows of 14160. Break of the 14170 support may take the pair to lows of 14122 if global risk-on mood prevails.

USD/INR 1M NDFs slid below 72.500 to trade around 72.300 in NY hours, remaining cautious of the gains in the rupee. Onshore spot gapped lower to open at 72.185 on Wednesday from previous close of 72.400 and YTD highs of 72.400 printed on Tuesday. Pair traded close to 72.200 levels in the morning as risk-on sentiment returned with US manufacturing slipping into contractionary territory. Pair extended the slide further in the afternoon and was seen testing the 72 handle but returned higher to close at 72.115. Some slippage below 72 may be seen but we do not see any risk to the 71.375 support.

Data/Events Highlights:

Malaysia's July export and import growth surprised on the upside as they were stronger than expected at 1.7% y/y and -5.9% y/y respectively. This led to an expansion of trade surplus to MYR 14.27 bn.

HK leader Carrie Lam withdrew the extradition bill, helping the recovery in equity markets, but did not accede to any of the other demands of the protesters.

Data/Events Ahead:

Philippines' August inflation is due on Thursday and we expect a modest deceleration to 2.2% y/y from 2.4% y/y previously.

DATA RELEASES DUE TODAY

01:00 GMT / 09:00 SGT - PH: CPI (Aug) 4cast: 2.2% y/y [Mkt: 1.8, Prev: 2.4]

01:30 GMT / 09:30 SGT - AU: Trade Balance (Jul) 4cast: 5780 AUD mn [Mkt: 7000, Prev: 8036]

03:30 GMT / 11:30 SGT - TH: Consumer Confidence (Aug) [Prev: 75]

12:15 GMT / 20:15 SGT - US: ADP Employment Survey (Aug) 4cast: 140 k [Mkt: 146, Prev: 156]

12:30 GMT / 20:30 SGT - US: Unit Labor Costs (Q2 F) [Mkt: 2.5, Prev: 2.4]

12:30 GMT / 20:30 SGT - US: Non Farm Productivity (Q2 F) [Mkt: 2.3, Prev: 2.3]

12:30 GMT / 20:30 SGT - US: Initial Claims (31-Aug) [Mkt: 215, Prev: 215]

14:00 GMT / 22:00 SGT - US: Durable Ex Transportation (Jul F) [Mkt: -0.4, Prev: -0.4]

14:00 GMT / 22:00 SGT - US: Durable Goods Orders (Jul F) [Mkt: 2.1, Prev: 2.1]

14:00 GMT / 22:00 SGT - US: Factory Orders (Jul) [Mkt: 1, Prev: 0.6]

14:00 GMT / 22:00 SGT - US: ISM Non-Manufacturing (Aug) 4cast: 54.5 [Mkt: 54, Prev: 53.7]

EVENTS & AUCTIONS

03:35 GMT / 11:35 SGT - JP: 30yr Bonds Auction

07:00 GMT / 15:00 SGT - EU: ECB's Guindos speaks in Frankfurt

09:30 GMT / 17:30 SGT - UK: 2025 Bond Auction (GBP 3bln)

16:00 GMT / 00:00 SGT - CA: Bank of Canada's Schembri speaks in Nova Scotia


Forex - Asia Open - Overnight Highlights


 23:48 (GMT) 04 Sep

 [Forex Highlights]

Asia Overnight Highlights - 05 Sept 2019

MAJORS

FX Highlights:

The Bloomberg dollar spot index traded lower on Wednesday as Fed Williams said the economy looks weaker than expected. The index extended the drop to 98.405 into the NY close.

EUR and GBP led the gains with declining concerns about a no-deal Brexit reducing the risk premia applied to Europe. AUD also extended overnight gains as equity markets rose, while the JPY and CHF weakened on the crosses. However, EUR/CHF fell back again in the afternoon to make new 2 year lows while USD/JPY saw highs above 106.40 in North America.

The BoC left rates unchanged as expected, but their fairly balanced statement was a little less dovish than expected, leading the markets to see slightly less chance of an October rate cut, though this is still seen as close to a 50-50 chance. USD/CAD fell around 70 pips in an initial response extending later to over a big figure, assisted by gains in oil. AUD/CAD slipped back below .90 despite AUD/USD reaching .68.

Incoming ECB chief Lagarde said the EZ economy faces near term risks with inflation persistently too low. Highly accommodative policy warranted for a prolonged period, but said mindful of negative effects of unconventional policies.

Data/Events Highlights:

- US Jul trade deficit fell to $54.0bn from %55.5bn vs $53.4bn exp.

- Fed's Williams said ready to act as appropriate.

- Bank of Canada left rates unchanged as exp, said trade conflict weighing more heavily than seen in Jul but also noted stronger than expected housing and rising wages.

- Fed's Beige Book said economy expanded at a modest pace.

- UK services PMI was weaker than expected, dropping to 50.6 in August, but this was broadly mid-range for the year. However, the drop in the composite PMI to 49.7 was the lowest since July 2016. The EZ composite PMI was revised slightly higher form the provisional estimate.

- VIX index: 17.33 (-11.85%)

- Gold Spot: $1,552.10/oz (-0.02%)

- ICE Brent front contract: $60.70 (+$2.44)

- Nymex WTI front contract: $56.09 ($-0.17)

- Reuters/Jefferies Commodities Index: 172.70 (+2.07%)

- 10y UST: 1.466% (+1bp) (Asia morning)

- DJI: 26,355.47 (+0.91%); S&P: 2,937.78 (+1.08%); Nasdaq: 7,976.88 (+1.30%)

Data/Events Ahead:

U.S. ADP private sector employment report is due today, and we expect a 140k increase. Weekly initial claims, final Q2 productivity and costs, and Jul factory orders will also be reported.

Eurozone construction PMI will be released.

In line with indications coming from survey data, we expect German businesses to have reported a 0.4% m/m fall in the number of orders in July.

EMERGING ASIA

FX Highlights:

Emerging Asia currencies had a relief rally on Wednesday. PHP and KRW gained 0.79% and 0.63% respectively. IDR (+0.48%), CNY (+0.46%) and SGD (+0.44%) followed. HKD strengthened and equity markets rallied following withdrawal of the extradition bill by HK Chief Executive Carrie Lam. Malaysia's trade data was stronger than expected, helping the MYR higher by 0.38% in the current session.

USD/CNH extended its losses on Thursday and fell to sub-7.1500 levels in late NY hours. 7.2000 resistance still key for any upsides. Support at 7.1437. China's stable CNY fixing remains the mitigating factor against volatility. USD/CNY onshore spot traded with a downside bias on Wednesday, printing lows of 7.1450 into the close. For USD/CNY, we see pair remaining mostly at the 7.1400-7.1800 range for the time being. 1Y NDFs also continued to be offered overnight on Wednesday, and was last seen testing the downside at 7.2100.

USD/SGD inched below the 1.3900 handle early on Wednesday and was sold off further to 1.3840-levels in late NY hours. The Monetary Authority of Singapore released a survey report on Wednesday, which indicated a lower market estimate for Singapore's 2019 economic growth at 0.6%. We expect pair to eye the 1.3836 support next but the downside remains fragile.

USD/IDR 1M NDFs slid below 14200 on Wednesday amid risk-on mood in the markets. Onshore spot traded a notch lower on Wednesday morning as the USD softened overnight after the ISM manufacturing data release. But a break below 14200 was only seen in the afternoon and the losses were extended after reports of HK extradition bill withdrawal. Pair printed over 1-month lows of 14160. Break of the 14170 support may take the pair to lows of 14122 if global risk-on mood prevails.

USD/INR 1M NDFs slid below 72.500 to trade around 72.300 in NY hours, remaining cautious of the gains in the rupee. Onshore spot gapped lower to open at 72.185 on Wednesday from previous close of 72.400 and YTD highs of 72.400 printed on Tuesday. Pair traded close to 72.200 levels in the morning as risk-on sentiment returned with US manufacturing slipping into contractionary territory. Pair extended the slide further in the afternoon and was seen testing the 72 handle but returned higher to close at 72.115. Some slippage below 72 may be seen but we do not see any risk to the 71.375 support.

Data/Events Highlights:

Malaysia's July export and import growth surprised on the upside as they were stronger than expected at 1.7% y/y and -5.9% y/y respectively. This led to an expansion of trade surplus to MYR 14.27 bn.

HK leader Carrie Lam withdrew the extradition bill, helping the recovery in equity markets, but did not accede to any of the other demands of the protesters.

Data/Events Ahead:

Philippines' August inflation is due on Thursday and we expect a modest deceleration to 2.2% y/y from 2.4% y/y previously.

DATA RELEASES DUE TODAY

01:00 GMT / 09:00 SGT - PH: CPI (Aug) 4cast: 2.2% y/y [Mkt: 1.8, Prev: 2.4]

01:30 GMT / 09:30 SGT - AU: Trade Balance (Jul) 4cast: 5780 AUD mn [Mkt: 7000, Prev: 8036]

03:30 GMT / 11:30 SGT - TH: Consumer Confidence (Aug) [Prev: 75]

12:15 GMT / 20:15 SGT - US: ADP Employment Survey (Aug) 4cast: 140 k [Mkt: 146, Prev: 156]

12:30 GMT / 20:30 SGT - US: Unit Labor Costs (Q2 F) [Mkt: 2.5, Prev: 2.4]

12:30 GMT / 20:30 SGT - US: Non Farm Productivity (Q2 F) [Mkt: 2.3, Prev: 2.3]

12:30 GMT / 20:30 SGT - US: Initial Claims (31-Aug) [Mkt: 215, Prev: 215]

14:00 GMT / 22:00 SGT - US: Durable Ex Transportation (Jul F) [Mkt: -0.4, Prev: -0.4]

14:00 GMT / 22:00 SGT - US: Durable Goods Orders (Jul F) [Mkt: 2.1, Prev: 2.1]

14:00 GMT / 22:00 SGT - US: Factory Orders (Jul) [Mkt: 1, Prev: 0.6]

14:00 GMT / 22:00 SGT - US: ISM Non-Manufacturing (Aug) 4cast: 54.5 [Mkt: 54, Prev: 53.7]

EVENTS & AUCTIONS

03:35 GMT / 11:35 SGT - JP: 30yr Bonds Auction

07:00 GMT / 15:00 SGT - EU: ECB's Guindos speaks in Frankfurt

09:30 GMT / 17:30 SGT - UK: 2025 Bond Auction (GBP 3bln)

16:00 GMT / 00:00 SGT - CA: Bank of Canada's Schembri speaks in Nova Scotia


Forex - Asia Open - Overnight Highlights


 23:48 (GMT) 04 Sep

 [Forex Highlights]

Asia Overnight Highlights - 05 Sept 2019

MAJORS

FX Highlights:

The Bloomberg dollar spot index traded lower on Wednesday as Fed Williams said the economy looks weaker than expected. The index extended the drop to 98.405 into the NY close.

EUR and GBP led the gains with declining concerns about a no-deal Brexit reducing the risk premia applied to Europe. AUD also extended overnight gains as equity markets rose, while the JPY and CHF weakened on the crosses. However, EUR/CHF fell back again in the afternoon to make new 2 year lows while USD/JPY saw highs above 106.40 in North America.

The BoC left rates unchanged as expected, but their fairly balanced statement was a little less dovish than expected, leading the markets to see slightly less chance of an October rate cut, though this is still seen as close to a 50-50 chance. USD/CAD fell around 70 pips in an initial response extending later to over a big figure, assisted by gains in oil. AUD/CAD slipped back below .90 despite AUD/USD reaching .68.

Incoming ECB chief Lagarde said the EZ economy faces near term risks with inflation persistently too low. Highly accommodative policy warranted for a prolonged period, but said mindful of negative effects of unconventional policies.

Data/Events Highlights:

- US Jul trade deficit fell to $54.0bn from %55.5bn vs $53.4bn exp.

- Fed's Williams said ready to act as appropriate.

- Bank of Canada left rates unchanged as exp, said trade conflict weighing more heavily than seen in Jul but also noted stronger than expected housing and rising wages.

- Fed's Beige Book said economy expanded at a modest pace.

- UK services PMI was weaker than expected, dropping to 50.6 in August, but this was broadly mid-range for the year. However, the drop in the composite PMI to 49.7 was the lowest since July 2016. The EZ composite PMI was revised slightly higher form the provisional estimate.

- VIX index: 17.33 (-11.85%)

- Gold Spot: $1,552.10/oz (-0.02%)

- ICE Brent front contract: $60.70 (+$2.44)

- Nymex WTI front contract: $56.09 ($-0.17)

- Reuters/Jefferies Commodities Index: 172.70 (+2.07%)

- 10y UST: 1.466% (+1bp) (Asia morning)

- DJI: 26,355.47 (+0.91%); S&P: 2,937.78 (+1.08%); Nasdaq: 7,976.88 (+1.30%)

Data/Events Ahead:

U.S. ADP private sector employment report is due today, and we expect a 140k increase. Weekly initial claims, final Q2 productivity and costs, and Jul factory orders will also be reported.

Eurozone construction PMI will be released.

In line with indications coming from survey data, we expect German businesses to have reported a 0.4% m/m fall in the number of orders in July.

EMERGING ASIA

FX Highlights:

Emerging Asia currencies had a relief rally on Wednesday. PHP and KRW gained 0.79% and 0.63% respectively. IDR (+0.48%), CNY (+0.46%) and SGD (+0.44%) followed. HKD strengthened and equity markets rallied following withdrawal of the extradition bill by HK Chief Executive Carrie Lam. Malaysia's trade data was stronger than expected, helping the MYR higher by 0.38% in the current session.

USD/CNH extended its losses on Thursday and fell to sub-7.1500 levels in late NY hours. 7.2000 resistance still key for any upsides. Support at 7.1437. China's stable CNY fixing remains the mitigating factor against volatility. USD/CNY onshore spot traded with a downside bias on Wednesday, printing lows of 7.1450 into the close. For USD/CNY, we see pair remaining mostly at the 7.1400-7.1800 range for the time being. 1Y NDFs also continued to be offered overnight on Wednesday, and was last seen testing the downside at 7.2100.

USD/SGD inched below the 1.3900 handle early on Wednesday and was sold off further to 1.3840-levels in late NY hours. The Monetary Authority of Singapore released a survey report on Wednesday, which indicated a lower market estimate for Singapore's 2019 economic growth at 0.6%. We expect pair to eye the 1.3836 support next but the downside remains fragile.

USD/IDR 1M NDFs slid below 14200 on Wednesday amid risk-on mood in the markets. Onshore spot traded a notch lower on Wednesday morning as the USD softened overnight after the ISM manufacturing data release. But a break below 14200 was only seen in the afternoon and the losses were extended after reports of HK extradition bill withdrawal. Pair printed over 1-month lows of 14160. Break of the 14170 support may take the pair to lows of 14122 if global risk-on mood prevails.

USD/INR 1M NDFs slid below 72.500 to trade around 72.300 in NY hours, remaining cautious of the gains in the rupee. Onshore spot gapped lower to open at 72.185 on Wednesday from previous close of 72.400 and YTD highs of 72.400 printed on Tuesday. Pair traded close to 72.200 levels in the morning as risk-on sentiment returned with US manufacturing slipping into contractionary territory. Pair extended the slide further in the afternoon and was seen testing the 72 handle but returned higher to close at 72.115. Some slippage below 72 may be seen but we do not see any risk to the 71.375 support.

Data/Events Highlights:

Malaysia's July export and import growth surprised on the upside as they were stronger than expected at 1.7% y/y and -5.9% y/y respectively. This led to an expansion of trade surplus to MYR 14.27 bn.

HK leader Carrie Lam withdrew the extradition bill, helping the recovery in equity markets, but did not accede to any of the other demands of the protesters.

Data/Events Ahead:

Philippines' August inflation is due on Thursday and we expect a modest deceleration to 2.2% y/y from 2.4% y/y previously.

DATA RELEASES DUE TODAY

01:00 GMT / 09:00 SGT - PH: CPI (Aug) 4cast: 2.2% y/y [Mkt: 1.8, Prev: 2.4]

01:30 GMT / 09:30 SGT - AU: Trade Balance (Jul) 4cast: 5780 AUD mn [Mkt: 7000, Prev: 8036]

03:30 GMT / 11:30 SGT - TH: Consumer Confidence (Aug) [Prev: 75]

12:15 GMT / 20:15 SGT - US: ADP Employment Survey (Aug) 4cast: 140 k [Mkt: 146, Prev: 156]

12:30 GMT / 20:30 SGT - US: Unit Labor Costs (Q2 F) [Mkt: 2.5, Prev: 2.4]

12:30 GMT / 20:30 SGT - US: Non Farm Productivity (Q2 F) [Mkt: 2.3, Prev: 2.3]

12:30 GMT / 20:30 SGT - US: Initial Claims (31-Aug) [Mkt: 215, Prev: 215]

14:00 GMT / 22:00 SGT - US: Durable Ex Transportation (Jul F) [Mkt: -0.4, Prev: -0.4]

14:00 GMT / 22:00 SGT - US: Durable Goods Orders (Jul F) [Mkt: 2.1, Prev: 2.1]

14:00 GMT / 22:00 SGT - US: Factory Orders (Jul) [Mkt: 1, Prev: 0.6]

14:00 GMT / 22:00 SGT - US: ISM Non-Manufacturing (Aug) 4cast: 54.5 [Mkt: 54, Prev: 53.7]

EVENTS & AUCTIONS

03:35 GMT / 11:35 SGT - JP: 30yr Bonds Auction

07:00 GMT / 15:00 SGT - EU: ECB's Guindos speaks in Frankfurt

09:30 GMT / 17:30 SGT - UK: 2025 Bond Auction (GBP 3bln)

16:00 GMT / 00:00 SGT - CA: Bank of Canada's Schembri speaks in Nova Scotia


Forex - Asia Open - Overnight Highlights


 23:48 (GMT) 04 Sep

 [Forex Highlights]

Asia Overnight Highlights - 05 Sept 2019

MAJORS

FX Highlights:

The Bloomberg dollar spot index traded lower on Wednesday as Fed Williams said the economy looks weaker than expected. The index extended the drop to 98.405 into the NY close.

EUR and GBP led the gains with declining concerns about a no-deal Brexit reducing the risk premia applied to Europe. AUD also extended overnight gains as equity markets rose, while the JPY and CHF weakened on the crosses. However, EUR/CHF fell back again in the afternoon to make new 2 year lows while USD/JPY saw highs above 106.40 in North America.

The BoC left rates unchanged as expected, but their fairly balanced statement was a little less dovish than expected, leading the markets to see slightly less chance of an October rate cut, though this is still seen as close to a 50-50 chance. USD/CAD fell around 70 pips in an initial response extending later to over a big figure, assisted by gains in oil. AUD/CAD slipped back below .90 despite AUD/USD reaching .68.

Incoming ECB chief Lagarde said the EZ economy faces near term risks with inflation persistently too low. Highly accommodative policy warranted for a prolonged period, but said mindful of negative effects of unconventional policies.

Data/Events Highlights:

- US Jul trade deficit fell to $54.0bn from %55.5bn vs $53.4bn exp.

- Fed's Williams said ready to act as appropriate.

- Bank of Canada left rates unchanged as exp, said trade conflict weighing more heavily than seen in Jul but also noted stronger than expected housing and rising wages.

- Fed's Beige Book said economy expanded at a modest pace.

- UK services PMI was weaker than expected, dropping to 50.6 in August, but this was broadly mid-range for the year. However, the drop in the composite PMI to 49.7 was the lowest since July 2016. The EZ composite PMI was revised slightly higher form the provisional estimate.

- VIX index: 17.33 (-11.85%)

- Gold Spot: $1,552.10/oz (-0.02%)

- ICE Brent front contract: $60.70 (+$2.44)

- Nymex WTI front contract: $56.09 ($-0.17)

- Reuters/Jefferies Commodities Index: 172.70 (+2.07%)

- 10y UST: 1.466% (+1bp) (Asia morning)

- DJI: 26,355.47 (+0.91%); S&P: 2,937.78 (+1.08%); Nasdaq: 7,976.88 (+1.30%)

Data/Events Ahead:

U.S. ADP private sector employment report is due today, and we expect a 140k increase. Weekly initial claims, final Q2 productivity and costs, and Jul factory orders will also be reported.

Eurozone construction PMI will be released.

In line with indications coming from survey data, we expect German businesses to have reported a 0.4% m/m fall in the number of orders in July.

EMERGING ASIA

FX Highlights:

Emerging Asia currencies had a relief rally on Wednesday. PHP and KRW gained 0.79% and 0.63% respectively. IDR (+0.48%), CNY (+0.46%) and SGD (+0.44%) followed. HKD strengthened and equity markets rallied following withdrawal of the extradition bill by HK Chief Executive Carrie Lam. Malaysia's trade data was stronger than expected, helping the MYR higher by 0.38% in the current session.

USD/CNH extended its losses on Thursday and fell to sub-7.1500 levels in late NY hours. 7.2000 resistance still key for any upsides. Support at 7.1437. China's stable CNY fixing remains the mitigating factor against volatility. USD/CNY onshore spot traded with a downside bias on Wednesday, printing lows of 7.1450 into the close. For USD/CNY, we see pair remaining mostly at the 7.1400-7.1800 range for the time being. 1Y NDFs also continued to be offered overnight on Wednesday, and was last seen testing the downside at 7.2100.

USD/SGD inched below the 1.3900 handle early on Wednesday and was sold off further to 1.3840-levels in late NY hours. The Monetary Authority of Singapore released a survey report on Wednesday, which indicated a lower market estimate for Singapore's 2019 economic growth at 0.6%. We expect pair to eye the 1.3836 support next but the downside remains fragile.

USD/IDR 1M NDFs slid below 14200 on Wednesday amid risk-on mood in the markets. Onshore spot traded a notch lower on Wednesday morning as the USD softened overnight after the ISM manufacturing data release. But a break below 14200 was only seen in the afternoon and the losses were extended after reports of HK extradition bill withdrawal. Pair printed over 1-month lows of 14160. Break of the 14170 support may take the pair to lows of 14122 if global risk-on mood prevails.

USD/INR 1M NDFs slid below 72.500 to trade around 72.300 in NY hours, remaining cautious of the gains in the rupee. Onshore spot gapped lower to open at 72.185 on Wednesday from previous close of 72.400 and YTD highs of 72.400 printed on Tuesday. Pair traded close to 72.200 levels in the morning as risk-on sentiment returned with US manufacturing slipping into contractionary territory. Pair extended the slide further in the afternoon and was seen testing the 72 handle but returned higher to close at 72.115. Some slippage below 72 may be seen but we do not see any risk to the 71.375 support.

Data/Events Highlights:

Malaysia's July export and import growth surprised on the upside as they were stronger than expected at 1.7% y/y and -5.9% y/y respectively. This led to an expansion of trade surplus to MYR 14.27 bn.

HK leader Carrie Lam withdrew the extradition bill, helping the recovery in equity markets, but did not accede to any of the other demands of the protesters.

Data/Events Ahead:

Philippines' August inflation is due on Thursday and we expect a modest deceleration to 2.2% y/y from 2.4% y/y previously.

DATA RELEASES DUE TODAY

01:00 GMT / 09:00 SGT - PH: CPI (Aug) 4cast: 2.2% y/y [Mkt: 1.8, Prev: 2.4]

01:30 GMT / 09:30 SGT - AU: Trade Balance (Jul) 4cast: 5780 AUD mn [Mkt: 7000, Prev: 8036]

03:30 GMT / 11:30 SGT - TH: Consumer Confidence (Aug) [Prev: 75]

12:15 GMT / 20:15 SGT - US: ADP Employment Survey (Aug) 4cast: 140 k [Mkt: 146, Prev: 156]

12:30 GMT / 20:30 SGT - US: Unit Labor Costs (Q2 F) [Mkt: 2.5, Prev: 2.4]

12:30 GMT / 20:30 SGT - US: Non Farm Productivity (Q2 F) [Mkt: 2.3, Prev: 2.3]

12:30 GMT / 20:30 SGT - US: Initial Claims (31-Aug) [Mkt: 215, Prev: 215]

14:00 GMT / 22:00 SGT - US: Durable Ex Transportation (Jul F) [Mkt: -0.4, Prev: -0.4]

14:00 GMT / 22:00 SGT - US: Durable Goods Orders (Jul F) [Mkt: 2.1, Prev: 2.1]

14:00 GMT / 22:00 SGT - US: Factory Orders (Jul) [Mkt: 1, Prev: 0.6]

14:00 GMT / 22:00 SGT - US: ISM Non-Manufacturing (Aug) 4cast: 54.5 [Mkt: 54, Prev: 53.7]

EVENTS & AUCTIONS

03:35 GMT / 11:35 SGT - JP: 30yr Bonds Auction

07:00 GMT / 15:00 SGT - EU: ECB's Guindos speaks in Frankfurt

09:30 GMT / 17:30 SGT - UK: 2025 Bond Auction (GBP 3bln)

16:00 GMT / 00:00 SGT - CA: Bank of Canada's Schembri speaks in Nova Scotia


Forex - Philippines Flows: USD/PHP steady, awaiting August inflation data


 02:34 (GMT) 04 Sep

 [Forex Flows]

USD/PHP opened a tad lower on Wednesday as dollar dropped after US manufacturing output slipped below 50 for the first time since August 2016. The pair was little changed after open, and was last seen 52.200. USD/PHP is likely to continue to be supported at 51.840 level ahead of the inflation data on Thursday. 1M NDFs were steady at 52.350. The Philippines August inflation data may provide some potential catalyst for the pair. Inflation is expected to ease further in August, which is likely to increase calls for further easing by BSP. PSEi steadied somewhat after a sharp drop yesterday. PSEi was in mild gains of 0.19%.


Forex - Asia Open - Overnight Highlights


 23:37 (GMT) 27 Aug

 [Forex Highlights]

Asia Overnight Highlights - 28 Aug 2019

MAJORS

FX Highlights:

The Bloomberg dollar spot index traded in a tight range around the 98 handle on Tuesday amid hopes of trade talks between US and China, but potential of a deal still looking low.

USD/JPY remained mostly below the key 106, despite some early gains to just above the level in NY, though not really accelerating back south yet with US yields and equity dip.

EUR/USD could not stay above 1.1100 as well and traded lower to 1.1086 in the NY session.

Sterling the main standout, slightly stretched the squeeze higher, cable managing to nudge the 1.23 figure, after supposed softening of language and opposition agreeing to legislate on no-deal. That even as gilts ignore the news.

Commodity currencies off mildly on the day though no great moves

Data/Events Highlights:

- US consumer confidence holds up stronger than expected, 135.1 from 135.8, new highs on current conditions, labor conditions

- 5 regional Fed's opposed Jul discount rate cut

- UK opposition parties vow to co-operate to block no-deal by legislation or otherwise no-confidence vote.

- UK official quoted saying Germany, France appeared to relax their language on need to retain backstop (BB)

- UK's Johnson - positive conversation with Juncker; said unless WA re-opened, backstop abolished, no prospect of a deal. Will never put checks, controls at N.Ireland border

- VIX index: 20.31 (+5.12%)

- Gold Spot: $1,542.41/oz (-0.02%)

- ICE Brent front contract: $59.51 (+$0.81)

- Nymex WTI front contract: $55.56 (+$0.63)

- Reuters/Jefferies Commodities Index: 169.70 (+0.47%)

- 10y UST: 1.471% (-6bp) (Asia morning)

- DJI: 25,777.90 (-0.47%); S&P: 2,869.16 (-0.32%); Nasdaq: 7,826.95 (-0.34%)

Data/Events Ahead:

No key data is due in developed markets today.

EMERGING ASIA

FX Highlights:

Mixed performance for Asian currencies on Tuesday after some cooling in trade tensions. INR (+0.76%) was the outperformer of the day following the announcement of RBI's cash transfers which eases fiscal concerns. KRW (+0.55%) also saw strong gains amid a reversal from strongly negative trade rhetoric. THB (+0.11%) also continued to gain. CNY (-0.15%) however continued to lose out to the USD as the flip-flop on trade truce and trade war continued. MYR, IDR, PHP and SGD also continued to trade in mild red.

USD/CNH was capped below 7.1800 levels on Tuesday and retreated to trade quietly around 7.1650 in the NY session. Should 7.2000 big figure resistance be broken, we will likely look at 7.2500 as next area of defense for further upsides. USD/CNY printed fresh over 11-year highs at 7.1692 on Tuesday even as trade tensions eased, given the limited scope of a trade deal. For USD/CNY, 7.1700 is the next resistance that we watch. 1Y NDF last at 7.2404. 1Y NDFs traded around 7.2300 on Tuesday, sustaining gains but remaining capped for now.

USD/SGD attempted a break above 1.3900 handle again on Tuesday but without success. Pair then traded on either side of 1.3890 in the NY hours. In our view, risk aversion is likely to persist given the current volatile market environment. Pair may eye the 1.3925 high again and edge towards the 1.3958 resistance next.

USD/IDR 1M NDFs reversed an early dip below 14300 on Tuesday and traded mostly between 14310 to 14350. Onshore spot continued to trade around 14240 on Tuesday after slipping from 14270+ levels the previous day following the announcement of Indonesia's new capital. Fresh funding will likely boost Jokowi's infrastructure plan, and pair slid to lows of 14228 in early trading. Some cooling in the trade war rhetoric also helped but the Chinese yuan continued to weaken and pair inched back up to 14250 later. Strong vigil on the pair may prevent a test of the 14360 resistance but buyers are seen below 14200.

USD/INR 1M NDFs continued to trade with an offered tone on Tuesday, breaking below the 72 handle and printing lows of 71.710. Onshore spot slid back below the 72 handle on Tuesday after RBI's decision for a record $24bn transfer to the government, which will likely be used to cut borrowing and boost economy without rocking the fiscal boat. Some easing in trade tensions also helped pair to open at 71.710 before gains to 71.850+ returned, but pair was seen with a downward bias to 71.500 levels again in the afternoon. We believe external risks continue to present potential for another break above the 72 handle but an improved fiscal situation may help.

Data/Events Highlights:

No tier 1 data was reported in Asia on Tuesday.

Data/Events Ahead:

A quiet day is seen ahead in Asia in data terms.

DATA RELEASES DUE TODAY

01:30 GMT / 09:30 SGT - AU: Construction Work Done (Q2) [Mkt: -1, Prev: -1.9]

08:00 GMT / 16:00 SGT - EU: M3 Money Supply (sa) (Jul) [Mkt: 4.7, Prev: 4.5]

EVENTS & AUCTIONS

15:30 GMT / 23:30 SGT - US: 2yr FRNS Reopening (USD 18bln)

17:00 GMT / 01:00 SGT - US: 5yr Notes Auction (USD 41bln)


Forex - Asia Open - Overnight Highlights


 23:57 (GMT) 26 Aug

 [Forex Highlights]

Asia Overnight Highlights - 27 Aug 2019

MAJORS

FX Highlights:

The Bloomberg dollar spot index was slightly firmer in the NY session on Monday amid hopes of trade talks between the US and China. The index rebounded from lows of 97.383 to inch back up above the 98 handle.

USD/JPY extended the big bounces off the Asia lows on the less heated trade rhetoric, as high as 106.41 on the best of the S&P rebound from 104.44 low before settling above the big figure.

EUR/USD back to 1.1100 big figure, testing the downside as the German Ifo business climate index fell more than expected to a new 7-year low.

Euro ignores the positive noises from PD on govt coalition talks with 5star, sterling likely shrugging off far from positive Brexit talk from Johnson out of G7. GBP/USD down to 1.2220 with Brexit fireworks likely to be back next week as the UK parliament returns on September 3.

Usual action seen elsewhere too as commodity currencies do some recouping, despite oil sinking off the early bounce.

Data/Events Highlights:

- Trump - China sincere in wanting trade deal. China very smart. Has manipulated its currency. Not looking at Japan auto tariffs at this moment. Really good chance he will meet Iran's Rouhani, if circumstances right

- US July durable goods 2.1%, -0.4% ex transport. Core capital shipments -0.7%, weakest drop since Oct16.

- Italy's PD's leader Zingaretti - meeting with 5star went well, optimistic there will be a govt. Declines to comment on Conte as PM (earlier sources claimed PD had dropped its veto, on track to return).

- VIX index: 19.32 (-2.77%)

- Gold Spot: $1,527.11/oz (0.00%)

- ICE Brent front contract: $58.70 ($-0.64)

- Nymex WTI front contract: $53.84 (+$0.20)

- Reuters/Jefferies Commodities Index: 168.91 (+0.18%)

- 10y UST: 1.535% (0bp) (Asia morning)

- DJI: 25,898.83 (+1.05%); S&P: 2,878.38 (+1.10%); Nasdaq: 7,853.74 (+1.32%)

Data/Events Ahead:

In the U.S., Jun house price data, recently soft, from FHFA and S&P Case-Shiller are due. Also up today, Aug consumer confidence should see some impact from equity volatility. Richmond Fed data, both manufacturing and services, are also due.

EMERGING ASIA

FX Highlights:

Asian currencies traded with a risk off tone on Monday given the trade war escalations from both U.S. and China over the weekend. CNY (-0.78%) led the pack as it touched 7.15/USD, while KRW (-0.58%) was a close second. INR (-0.50%) followed despite a slew of fiscal measures announced to support economic growth. THB (+0.36%) however continued on its winning streak, raising some concerns for its central bank.

USD/CNH retreated from near 7.20-levels on Monday as hopes of US-China trade talks re-emerged, and pair consolidated around 7.1680 in the NY session. Should 7.2000 big figure resistance be broken, we will likely look at 7.2500 as next area of defense for further upsides. USD/CNY gapped higher to open at 7.1319 on Monday from previous close of 7.0979 and rose to fresh record highs of 7.1540. Break of 7.1500 is still not firm, and we expect further tests at this level. 1Y NDFs gave up 7.2500 earlier on Monday but still remained above 7.2300 in the NY session.

USD/SGD touched 2-year highs of 1.3925 on Monday but traded horizontally around 1.3880 subsequently as possibility of trade talks restarting emerged. Pair may eye the 1.3925 high again and edge towards the 1.3958 resistance next.

USD/IDR 1M NDFs traded mostly horizontally around 14340 on Monday, sustaining gains from sub-14300 levels following a pick up in the trade war rhetoric. Onshore spot traded with a bid tone at the start of the new week, trading to 14270 in early trading, as trade war escalation on Friday saw risk aversion come into play again. The central bank possibly stalled further losses in rupiah, but fresh over 1-week highs of 14274 were printed in the afternoon before a drop to sub-14250 levels as the new capital was announced. Strong vigil on the pair may prevent a test of the 14360 resistance but buyers are seen below 14200.

USD/INR 1M NDFs reversed the gains to 72.60+ seen earlier on Monday and traded horizontally around 72.200 in the NY hours. Onshore spot gapped higher to open at 71.980 on Monday from previous close of 71.660 as the fiscal support measures announced by the Fin Min were seen lacking to support a short-term rebound. A rise in global risk aversion on the back of trade war escalations saw the pair bid up to fresh YTD highs of 72.250 but some reversal to sub-72 levels was seen in the afternoon as trade talks came back on the table. Focus turning to the Q2 GDP release slated for this Friday. Break of 72.200 has opened the doors to 72.500, but some restraint may be seen if trade war escalations stall.

Data/Events Highlights:

Singapore's industrial production was better than expected at -0.4% y/y in July, an improvement from -8.1% y/y in June.

Data/Events Ahead:

A quiet day is seen ahead in Asia in data terms.

DATA RELEASES DUE TODAY

13:00 GMT / 21:00 SGT - US: S&P Case-Shiller Home Price (Jun) [Prev: 2.39]

13:00 GMT / 21:00 SGT - US: FHFA House Price Index (Jun) [Prev: 0.1]

14:00 GMT / 22:00 SGT - US: Consumer Confidence (Aug) [Mkt: 130, Prev: 135.7]

EVENTS & AUCTIONS

02:00 GMT / 10:00 SGT - AU: RBA's Debelle speaks in Canberra

03:30 GMT / 11:30 SGT - US: 2yr Notes Auction (USD 40bln)

06:00 GMT / 14:00 SGT - JP: Enhanced Liquidity Auction

09:30 GMT / 17:30 SGT - EU: ECB Main Refinancing Operation Result


Forex - Hong Kong Chart Hang Seng Index Update: Opening decline turning pressure towards strong support at 24900


 01:53 (GMT) 26 Aug

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