Forex - Asia Highlights - Wednesday, 14 August 2019


 05:04 (GMT) 14 Aug

  [Forex Highlights]

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Asia Highlights - Wednesday, 14 August 2019 (0101-NGRB-C01)

US Overview:

Risk appetite surged after the IS delayed some of its tariffs on China to December 15. This supported the USD, particularly USD/JPY, though the commodity currencies advanced. UST yields rose though more at the front end.

US Highlights:

- US Jul CPI +0.3% as exp, ex food and energy +0.3% vs 0.2% exp.

- US delays some tariffs on China to December 15.

Currencies:
USD/JPY bounced sharply on the news that the US had delayed some tariffs on China to Sep, shortly after getting a modest lift from near 105.00 on the news that the US and China would talk in 2 weeks. The bounce got close but not quite to 107.00, but there was little subsequent room below 106.50. Before the focus turned to trade optimism a firmer than expected US core CPI gave the USD only a brief and marginal lift.
While the biggest move was on USD/JPY, commodity currencies also bounced on the tariff delay. USD/CAD, having risen to near 1.33 after the US CPI, saw a brief dip below 1.32. AUD/USD rallied from around .6750 above .68 before settling near the figure. AUD advanced versus CAD and NZD, but AUD/CAD could not hold above .90.
The USD had been pressured by risk aversion through the European morning EUR/USD quickly bouncing back above 1.12 despite an initial dip lower on a weak ZEW print of -44,1, the lowest since 2011. A return below 1.12 was seen as the USD gained on trade optimism. EUR/CHF had fallen to new 2 year lows below 1.085 before rebounding above 1.09. EUR/NOK slipped sharply as oil rallied after having earlier broken back above 10.0.
UK average earnings growth and employment growth were both on the strong side of expectations but declining vacancies and a rise in unemployment were an offset. GBP saw little response to the data.

Asia FX and Mews:
-Australia Aug. Consumer Confidence Rises 3.6% M/m to 100
-China July Industrial Output Rises 4.8%y/y; est. 6.0%, Retail Sales +7.6%y/y; est. +8.6%, Fixed Investment +5.7%y/y; est. +5.8%
-Yen broadly strengthened in Asia, paring off some the weakness from the tariffs delay. There are some doubt in the market if the optimism based on the tariffs delay is fully justifiable. USD/JPY fell with softer US yields, weaker yuan and a very huge beat on Japan core machinery orders. Subsequently, weak Chinese data dims the risk mood further, saw USD/JPY pressed slightly lower.
-There was no noticeable reaction on the AUD following a surprise increase in the consumer confidence index. A minor beat on wage growth saw AUD/USD spiked higher but came back down almost immediately, as the print wasn't a major surprise and doesn't change the subdued wage growth outlook in Australia. The weak Chinese data weighed on the Aussie but the pair recovered in a hurry to put pressure on 0.68 just above.

Data:

JP: Core Machine Orders (Jun) 12.5% y/y (Mkt: -1.1 Prev: -3.7)

AU: Wage Price Index (Q2) 0.6% q/q (Mkt: 0.5 Prev: 0.5)

Still To Be Released -

Data:

06:00 GMT - DE: GDP (sa) (2Q P) % q/q (Mkt: -0.1 Prev: 0.4)

06:00 GMT - DE: GDP (wda) (2Q P) % y/y (Mkt: 0.1 Prev: 0.7)

06:00 GMT - FI: GDP (Jun) % (Mkt: Prev: 0.8)

06:45 GMT - FR: CPI (Jul F) % m/m (Mkt: -0.2 Prev: -0.2)

06:45 GMT - FR: CPI (Jul F) % y/y (Mkt: 1.1 Prev: 1.1)

06:45 GMT - FR: HICP (Jul F) % m/m (Mkt: -0.2 Prev: -0.2)

06:45 GMT - FR: HICP (Jul F) % y/y (Mkt: 1.3 Prev: 1.3)

07:30 GMT - NL: GDP (Q2 P) % q/q (Mkt: 0.3 Prev: 0.5)

07:30 GMT - NL: GDP (Q2 P) % y/y (Mkt: Prev: 1.7)

07:30 GMT - SE: CPI (Jul) 4cast: 1.6% y/y (Mkt: 1.5 Prev: 1.8)

07:30 GMT - SE: CPIF (Underlying) (Jul) 4cast: 1.5% y/y (Mkt: 1.4 Prev: 1.7)

08:30 GMT - UK: CPI (Jul) 4cast: -0.2% m/m (Mkt: -0.1 Prev: 0)

08:30 GMT - UK: CPI (Jul) 4cast: 1.8% y/y (Mkt: 1.9 Prev: 2)

08:30 GMT - UK: Input Prices (nsa) (Jul) % m/m (Mkt: 0.5 Prev: -1.4)

08:30 GMT - UK: Input Prices (nsa) (Jul) % y/y (Mkt: 0.2 Prev: -0.3)

08:30 GMT - UK: Output Prices (unadj.) (Jul) % y/y (Mkt: 1.7 Prev: 1.6)

08:30 GMT - UK: Output Prices Core (unadj.) (Jul) % m/m (Mkt: 0.1 Prev: 0.1)

09:00 GMT - EU: GDP (SA) (2Q P) % q/q (Mkt: 0.2 Prev: 0.2)

09:00 GMT - EU: GDP (SA) (2Q P) % y/y (Mkt: 1.1 Prev: 1.1)

09:00 GMT - EU: Industrial production (Jun) % y/y (Mkt: -1.3 Prev: -0.5)

12:30 GMT - US: Import Price Index (Jul) % m/m (Mkt: -0.1 Prev: -0.9)

Events and Auctions

08:45 GMT - ES: Bonds Auction

23:00 GMT - AU: RBA's Debelle speaks in Sydney


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