Forex - GOOD MORNING Latam! (FX HIGHLIGHTS BRL MXN ARS CLP COP PEN)...


 11:30 (GMT) 15 Mar

  [Forex Highlights]

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RECAP CURRENCIES, DATA AND EVENTS

Regional Backdrop

A rather subdued week for most Asian currencies, however, Indian rupee stood out as the biggest gainer. INR traded with a bullish bias and rallied by 1.48% against the dollar during the week. Continued inflows and softer oil prices underpinned. The Philippines peso was a tad weaker, down by 0.73% against USD as dovish comments by new BSP governor hit the currency. SGD, IDR and THB were in modest gains of 0.3%, and CNH gained 0.2%. TWD, CNY, HKD, MYR, KRW were fairly stable.

News and FX

Asia:

+ Indonesia: Feb Exports -11.33% y/y (Prev: -4.30R); Imports -13.98% y/y (Prev: -2.08R); Trade Balance USD 330 mn (Prev: -1064R)

+ India: India will rely more on China for components as the government pushes for electric vehicles. ~ ET

+ USD/CNH: USD/CNH traded between 6.7004-6.7356 across the week. USDCNH slid to more than a 1-week low at 6.7004 on Thursday following weakness in USD, due to the gains in sterling. However, pair recovered to 6.7353 following weak China's IP, retail sales and the strengthening USD. Pair failed to break above the 6.7356 resistance and reversed towards 6.7150. Eyes on FOMC meeting in the week ahead. PBoC fixed mid-point at 6.7167 vs. previous close of 6.7240. USD/CNY traded between 3.7010 - 3.7301 across the week and slid towards 6.7150 on Friday. 1Y NDFs traded at 6.7473 at last look.

Europe News and FX

GOOD MORNING Latam! (FX HIGHLIGHTS BRL MXN ARS CLP COP PEN)... (0101-JXLP-C01)

+ GBP sold off a little in the early morning as the market reacted to the overnight news that Brexiteer lawyers representing the ERG and DUP rejected Attorney General Cox's latest guidance on the withdrawal deal, reducing the chances of PM may getting her deal through the House of Commons if it is presented for a third time next week, as most expect it will be. But initial GBP weakness was reversed by mid-morning.

+ Data was thin on the ground. Eurozone CPI was confirmed at 1.5% y/y in February. Italian industrial orders recovered in January, rising 1.8% m/m after a 1.4% fall in December.

+ EUR/NOK continued its downtrend seen so far this week trading down to 9.68, though oil prices were slightly lower through the morning. AUD/USD edged lower after testing 0.71 overnight

Bonds and equities

+ Quiet morning for bonds, core mainly flat, after just a touch of overnight support for core from the N.Korea comments. Gilts non-committal ahead of the weekend Brexit developments. BTPs a touch off as 10s hold 2 ½ % ahead of Moody's after the close. ECBs Rehn says must rethink policy framework after failing to lift inflation.

US DATA

GOOD MORNING Latam! (FX HIGHLIGHTS BRL MXN ARS CLP COP PEN)... (0101-JXLP-C02)

Subdued data is also likely from Feb industrial production, which we expect to be unchanged with a 0.1% increase in manufacturing. Today also sees Mar's Empire State manufacturing survey and Mar's Preliminary Michigan CSI. Fed speakers will be quiet ahead of the Mar 20 rates decision

EMGE Europe:

GOOD MORNING Latam! (FX HIGHLIGHTS BRL MXN ARS CLP COP PEN)... (0101-JXLP-C03)

The lira continued to weaken at the beginning of Friday's session, underperforming other EMEA currencies with the USD/TRY temporarily rising to 5.4758. The currency was hurt by data showing that the unemployment rate rose to a near-nine-year high of 13.5% in December from 12.3% in November, above the consensus forecast of 12.8% as well as data revealing that the central government budget deficit widened to TRY 16.8bn in February from TRY 1.9bn in February 2018 as expenditure jumped by 33.2% y/y to TRY 83.7bn. We think that the lira will suffer from worries early rate cuts by the CBRT in the coming week, with the USD/TRY potentially breaking the key 5.4875 resistance level.

GOOD MORNING Latam! (FX HIGHLIGHTS BRL MXN ARS CLP COP PEN)... (0101-JXLP-C04)

The ruble gained slightly at the beginning of Friday's session with the USD/RUB temporarily falling to 65.3058, driven by higher oil prices as well as bigger FX sales by exporters at the start of the monthly tax payment period, with social tax remittances leaving the system. We see scope for the currency's further appreciation in the coming week due to tax payments, with the USD/RUB possibly falling below the key 65.15 support level.


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