Forex - Chart USD/TWD Update: Steady in range above the 31.000 level

 01:31 (GMT) 23 Jul

  [Forex Charts]

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Chart USD/TWD Update: Steady in range above the 31.000 level (0101-MRZY-C01)

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Forex - Asia Open - Overnight Highlights

 23:50 (GMT) 22 Jul

 [Forex Highlights]

Asia Overnight Highlights - 23 Jul 2019


FX Highlights:

The Bloomberg dollar traded with a mild upside bias on Monday as ranges remained tight. The index stayed below 97.300 as Fed officials entered the quiet period ahead of the July 30-31 FOMC meeting.

GBP saw some weakness in the European morning, though EUR/GBP peaked at .90. While there was no obvious trigger, the resignation of foreign office minister Alan Duncan coming after most of the decline in GBP, the expectation of more ministerial resignations this week after the expected announcement of Boris Johnson as the new Prime Minister is enough to create some nerves in GBP after the rally in the second half of last week. While GBP saw some recovery in North America, Cable was unable to hold above 1.25.

USD/JPY settled marginally below 108 while EUR/USD kept to a very tight range above 1.12.

USD/CAD moved above the 1.31 level as wholesale trade data for May came out weaker than expected, falling 1.8% m/m. This was despite modest gains in oil. AUD/CAD remains below .9250.

EUR/CHF touched below 1.10 with eyes on Thursday's ECB meeting but USD/CHF held above .98.

Data/Events Highlights:

- Canada May wholesale sales -1.8% vs +0.5% exp.

- US Jun Chicago Fed National Activity Index -0.02 vs +0.08 exp.

- VIX index: 13.53 (-6.37%)

- Gold Spot: $1,423.80/oz (-0.08%)

- ICE Brent front contract: $63.26 (+$0.79)

- Nymex WTI front contract: $56.14 ($-0.08)

- Reuters/Jefferies Commodities Index: 178.55 (-0.02%)

- 10y UST: 2.046% (-1bp) (Asia morning)

- DJI: 27,171.90 (+0.07%); S&P: 2,985.03 (+0.28%); Nasdaq: 8,204.14 (+0.71%)

Data/Events Ahead:

U.S. existing home sales should fall by 0.7% to 5.30m after a stronger May. Richmond Fed survey and FHFA house price index is also due.

European Commission will release the July consumer confidence. So far this year, the indicator has been fairly stable in a narrow range between -6.5 and -7.4.

ECB will release the euro area Bank Lending Survey for Q2, with banks' expectations about Q3 lending activity.

Japan's final print of June machine tool orders data will be out.

The new Tory leader should be announced on Tuesday, the question being whether the likely winner, Boris Johnson, will face an immediate vote of confidence in his government from parliament which is scheduled to go into summer recess on Thursday.


FX Highlights:

Most Asian currencies slid against the USD at the start of the week as traders scaled back bets for a half-point rate cut by the Federal Reserve this month. KRW (-0.33%) led the losses with 20-day exports data showing another challenging month for Asia in trade terms. INR (-0.17%) was also in losses amid the central bank chief turning less dovish than before. THB (-0.20%) and TWD (-0.12%) also declined.

USD/CNH was little changed on Monday, although it edged up to 6.8844 towards the close of NY. Markets appear to be fatigued from US-China trade news and HK updates. We continue to see pair within the range of 6.8600-6.9000. 1Y NDFs traded with a slight bid tone to touch 6.9240 in late NY/early Asian hours but slid back towards 6.9200 handle in Asia this morning. USD/CNY remained in range, seen between 6.8768 - 8828 on Monday. For USD/CNY, momentum remains limited, and should cap pair mostly within 6.8650-6.8900 range.

USD/SGD was choppy around the 1.3600 handle on Monday amid no clear market news and watch on June CPI due today. Pair edged to highs of 1.3618 but slid back lower to drop below the 1.3600 big figure before returning to 1.3610 at last look. Over the weekend, MTI warned of downgrades to GDP forecast. Market expectations of MAS easing also growing in recent days. With pair reaching the top of the 1.355-1.362 band, watch for further breakthrough and the resistance level of 1.3626.

USD/IDR 1M NDFs saw some gains to 14010+ but these were not sustained and pair retuned to 14000 handle later amid narrow range trading. Onshore spot was unable to break below the strong support at 13890 on Friday and gapped higher to open the week at 13945 from previous close of 13938. Pair edged higher to 13960+ levels as Fed officials tried to calm investors about a steep rate cut probabilities. Pair however slid back to opening levels around 13940 into the close. Expect range trading between 13890 and 14000 unless Fed or trade war situation develops further.

USD/INR 1M NDFs touched 69.300-levels but subsequently traded around 69.200. Onshore spot broke above the 69 handle on Monday to print fresh near 3-week highs of 69.060 as RBI Governor Das signalled that further rate cuts will be dependent on data and avoided the extent of dovishness that he has displayed before. Shadow banking risks also returned to the forefront. Pair traded on either side of the 69 handle thereafter but slid to lows of 68.890 into the close. A clear break of the 69 handle will open the doors to 69.200.

Data/Events Highlights:

Thailand's June customs exports were less bad than expected, down 2.15% y/y, while imports disappointed at -9.47% y/y bringing the trade surplus to $3212 mn.

Data/Events Ahead:

Singapore's June CPI release will be closely watched today as best for MAS easing are picking up.

Taiwan's June IP is also due.


05:00 GMT - SG: CPI (Jun) 4cast: 0.9% y/y (Mkt: 0.8 Prev: 0.9)

05:30 GMT - JP: Tokyo Department Store (Jun) % y/y (Prev: -1.6)

08:00 GMT - TW: Industrial Output (Jun) % y/y (Mkt: -0.2 Prev: -3.05)

13:00 GMT - US: FHFA House Price Index (May) % m/m (Prev: 0.4)

14:00 GMT - US: Existing Home Sales (Jun) 4cast: 5.3mn (Mkt: 5.35 Prev: 5.34)

14:00 GMT - EU: Consumer Sentiment (Jul A) (Mkt: -7.2 Prev: -7.2)

22:45 GMT - NZ: Trade Balance (Jun) NZD mn (Mkt: 100 Prev: 264)


- 03:35 GMT - JP: 40yr Bond Auction

- 09:30 GMT - EU: ECB Main Refinancing Operation Result

- 09:30 GMT - UK: 2029 0.875% Bonds Auction(GBP 2.75bln)

- 17:00 GMT - US: 2yr Notes Auction (USD 40bln)

Forex - Asia Open - Overnight Highlights

 23:45 (GMT) 17 Jul

 [Forex Highlights]

Asia Overnight Highlights - 18 Jul 2019


FX Highlights:

The Bloomberg dollar spot index was firm through the European morning but slid lower to 97.200 levels in NY as IMF said the USD was overvalued. The impact of softer than expected US housing sector data was brief, but equities and UST yields slipped.

EUR/USD moved off 1.12 - touching 1.1230 helped by higher than expected Eurozone CPI at 1.3% y/y in June - while USD/JPY broke below 108.00 to lows of 107.87 in early trading this morning.

UK CPI was in line with expectations, but continued talk of "no deal" being pursued by PM candidate Johnson weighed on GBP sentiment, helped by comments from Brexit minister Barclay who said "no deal" was underpriced. A dip below 1.24 on GBP/USD however found buyers, with highs above 1.2450 as EUR/GBP slipped back from a high around .9050.

Canadian CPI and manufacturing shipments were broadly in line with expectations. A weaker USD saw USD/CAD as low as 1.3031 before a modest correction as oil fell. NZD was the strongest of the commodity trio.

Data/Events Highlights:

- US Jun housing starts -0.9% to 1253k vs 1260k exp, permits -6.1% to 1220k vs 1300k exp.

- Fed's George said prepared to adjust views based on risks.

- Fed's Beige Book said economy expanded at modest pace, little changed from prior period.

- Eurozone CPI at 1.3% y/y in June was better than expected.

- UK headline CPI inflation was unchanged in June at 2.0% y/y.

- VIX index: 13.97 (+8.63%)

- Gold Spot: $1,425.83/oz (-0.06%)

- ICE Brent front contract: $63.66 ($-0.69)

- Nymex WTI front contract: $56.59 ($-0.19)

- Reuters/Jefferies Commodities Index: 179.42 (-0.37%)

- 10y UST: 2.045% (-6bp) (Asia morning)

- DJI: 27,219.85 (-0.42%); S&P: 2,984.42 (-0.65%); Nasdaq: 8,185.21 (-0.46%)

Data/Events Ahead:

U.S. data due includes weekly initial claims, with continued risk of distortions from the annual auto retooling, and Jul's Philly Fed, which was soft in Jun but less so than the Empire State data. Jun's leading index follows later. Fed's Bostic and Williams both speak again on Thursday.

U.K. retail sales data for June should show a further clear correction given the messages from recent survey data and anecdotal evidences. Indeed, we see sales falling 1.0% m/m, which would be the largest of three successive falls but only return the level of sales back to its January level.

Japan's June trade data is due this morning. We expect the downtrend in exports to continue, with a further decline of 3.0% y/y seen in June. Imports are slightly lower, likely dropped by 0.6% y/y. This will see trade balance to improve to a surplus of ¥554bn in June.

Australia's June employment data will also be of interest. We expect unemployment rate to remain unchanged at 5.2% in June. Employment change should remain strong at 22.0k in June but softening from May's figures at 42.3k.


FX Highlights:

Majority of the Asian currencies were in the red against the dollar on Wednesday as risk aversion crept back in following Trump's threats to impose more tariffs on China. PHP was the biggest loser down 0.45% against the dollar. IDR slid 0.34% and KRW was down 0.30% ahead of Thursday's central bank meetings for both where we are expecting rate cuts.

USD/CNH was unable to break above 6.8840 on Wednesday and was offered to 6.8740 in the NY hours although a rebound to 6.8780-levels followed. We continue to see pair within the range of 6.8600-6.9000. 1Y NDFs also crept lower to 6.9120 but a rebound to 6.9160+ levels was seen subsequently. USD/CNY was seen with a downside bias, but still remained near familiar levels, ranging between 6.8733 - 8833. The onshore pair is still likely to trade within range of 6.8500-6.9000 for the time being.

USD/SGD remained bid on Wednesday amid worsening external and domestic conditions, and 1.3600 handle was broken once again as highs of 1.3626 were printed. Pair is testing the resistance at 1.3625 and a break above will open the doors to 1.3682.

USD/IDR 1M NDFs rallied to 14053 highs on Wednesday before easing slightly to 14030-levels. Onshore spot was lifted above 13940 in early trading on Wednesday from last close of 13935 amid calls for easing from BI at the Thursday meeting. Another pickup in trade tensions overnight with the US threatening further China tariffs resulted in risk aversion again, weighing on Asian currencies, but a drop in oil prices helped cushion the decline in rupiah. Pair however extended gains to intraday highs of 13983 into the close. Pair is likely to extend gains to 14000 if BI sounds excessively dovish.

USD/INR 1M NDFs shot up above the 69 handle on Wednesday although the break above was not firm. Onshore spot drifted higher to 1.5-week highs of 68.885 on Wednesday following a rally in the previous session. US threat of further tariffs on China is boosting risk aversion once again, and the drop in oil prices was unable to cap the upside for the pair. Pair is likely to eye the 69 handle if a firmer break of 69.845 resistance is seen. Buyers likely to crowd out any moves below 68.500.

Data/Events Highlights:

Singapore's non-oil domestic export (NODX) and electronic export growth weakened further to -17.3% y/y and -31.9% y/y respectively in June.

Data/Events Ahead:

Key interest rate decision are eyed in Asia - from Bank Indonesia and Bank of Korea. We are expecting a 25bps cut from both.

Hong Kong's June unemployment rate will be reported as well.


23:50 GMT - JP: Trade Balance (sa) (Jun) JPY bn (Mkt: -153.2 Prev: -609.1)

23:50 GMT - JP: Exports (Jun) 4cast: -3% y/y (Mkt: -5.4 Prev: -7.8)

23:50 GMT - JP: Trade Balance (nsa) (Jun) 4cast: 554JPY bn (Mkt: 403.5 Prev: -968.3)

23:50 GMT - JP: Imports (Jun) 4cast: -0.6% y/y (Mkt: -0.2 Prev: -0.2)

n/a GMT - ID: BI - 7D Reverse Repo Rate (Jul 18) 4cast: 5.75% (Mkt: 5.75 Prev: 6)

01:00 GMT - KR: BoK 7-Day Repo Rate (Jul 18) 4cast: 1.5% (Mkt: 1.75 Prev: 1.75)

01:30 GMT - AU: NAB Business Confidence (Jul) (Prev: 2)

01:30 GMT - AU: Unemployment (Jun) 4cast: 5.2% (Mkt: 5.2 Prev: 5.2)

01:30 GMT - AU: Employment (Jun) 4cast: 22 k (Mkt: 9 Prev: 42.3)

08:30 GMT - UK: Retail Sales (ex Auto Fuel) (Jun) % m/m (Mkt: -0.2 Prev: -0.3)

08:30 GMT - UK: Retail Sales (inc Auto Fuel) (Jun) 4cast: -1% m/m (Mkt: -0.3 Prev: -0.5)

08:30 GMT - UK: Retail Sales (ex Auto Fuel) (Jun) % y/y (Mkt: 2.6 Prev: 2.2)

08:30 GMT - UK: Retail Sales (inc Auto Fuel) (Jun) 4cast: 1.8% y/y (Mkt: 2.6 Prev: 2.3)

12:30 GMT - US: Initial Claims (Jul 13) k (Mkt: 216 Prev: 209)

12:30 GMT - US: Philadelphia Fed Survey (Jul) (Mkt: 5 Prev: 0.3)

14:00 GMT - US: Leading Indicator (Jun) % m/m (Mkt: 0.1 Prev: 0)

23:30 GMT - JP: Natl CPI (Jun) 4cast: 0.8% y/y (Mkt: 0.7 Prev: 0.8)


- n/a GMT - ID: Bank Indonesia Rate Decision and Briefing

- 12:30 GMT - CA: ADP Canada Releases June Payroll Estimates

- 13:30 GMT - US: Fed's Bostic speaks in Clarksville

- 15:30 GMT - US: 4 wk Bills Auction

- 15:30 GMT - US: 8 wk Bills Auction

- 17:00 GMT - US: 10 yr TIP Auction

- 18:15 GMT - US: Fed's Williams speaks on monetary policy

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