Forex - Asia Highlights - Monday, 2 December 2019


 05:31 (GMT) 02 Dec

  [Forex Highlights]

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Asia Highlights - Monday, 2 December 2019 (0101-PWXM-C01)

Currencies:
The USD was generally firmer through the European morning, though without any particular news trigger, suggesting month end flows may be responsible. Strength continued through the afternoon but reversed by the end of the day suggesting the month end hypothesis was correct.
GBP was the weakest of the majors through the morning, dropping around 30 pips from opening levels, while otherwise the USD generally just drifted modestly higher.
The NOK was a little weaker through the morning though unaffected by weaker retail sales early on, showing a 0.8% October decline, though the November unemployment data showed the rate dropping to 2.1%. The SEK stayed firm as Q3 GDP was a little stronger than expected at 0.3% in Q3. NOK/SEK hit new post-Jan lows below 1.04.
The NOK was a little weaker through the morning though unaffected by weaker retail sales early on, showing a 0.8% October decline, though the November unemployment data showed the rate dropping to 2.1%. The SEK stayed firm as Q3 GDP was a little stronger than expected at 0.3% in Q3. NOK/SEK hit new post-Jan lows below 1.04.
UK consumer credit was stronger than expected, rising £1.326bn in October, the largest rise since July 2018.
Eurozone CPI was stronger than expected at 1.0% y/y in November, with core rising to 1.3%, and HICP ex food and energy to 1.5%.
Canadian GDP was marginally stronger than expected at 1.3% q/q annualised in Q3, helping to trigger a modest CAD recovery after an early USD/CAD move above 1.33.

Asia FX and News:
Market starting Dec. on a bright note. The latest update on US-China trade is from a cited source close to the US trade team, that the deal stalled because of the HK bill but scope for a phase one deal by year-end remains and Dec. tariffs is expected to be hold off. This might have helped to alleviate some concerns following the HK bill legislation, though most had been expecting that it will not derail trade talks. China official mfg. PMI unexpectedly rebounded above 50, non-mfg. index was also better-than-expected. USD/JPY climbed higher form the open and peaked around 109.72, underpinned by US yields and equities. JPY the weakest G10 currency in the Asia session.
NZD/USD outperformed AUD/USD with diverging domestic data. AUD/NZD found a fresh low of 1.0505. NZ term of trade was better-than-expected. AUD was weighed by a batch of largely downbeat secondary domestic data, but offset by Caixin China mfg. PMI which was slightly better-than-expected at 51.8, and sustained the firm tone in the antipodeans.
Weekend polls suggest rising support for the Labour Party, which has seen the GBP slightly weaker. However, the Conservative still holds a healthy advantage in most of the polls - at least a 9% margin - except for just the BMG's survey which showed the margin shrank to 6%.

Data:

AU: AIG Manufacturing PMI (Nov) 48.1 (Prev: 51.6)

JP: Capital Spending (Q3) 7.1% y/y (Mkt: 5 Prev: 1.9)

AU: Building approvals (Oct) -8.1% m/m (Mkt: 0 Prev: 7.2R)

AU: ANZ Job Ads (Nov) -1.7% m/m (Prev: -1)

JP: Jibun Bank PMI Mfg (Nov F) 48.9 (Prev: 48.6)

AU: Commodity Index (Nov) 115.9 (Prev: 116.5)

Still to be released:

IT: Budget balance (Nov) EUR bn (Prev: 2.5)

07:30 GMT - SE: Manufacturing PMI (Nov) (Mkt: 47 Prev: 46)

08:00 GMT - NO: Manufacturing PMI (Nov) (Prev: 54.9)

08:15 GMT - ES: Manufacturing PMI (Nov) (Mkt: 46.8 Prev: 46.8)

08:30 GMT - CH: Manufacturing PMI (Nov) (Mkt: 48.9 Prev: 49.4)

08:30 GMT - DE: Manufacturing PMI (Nov F) (Mkt: 43.8 Prev: 43.8)

08:45 GMT - IT: Manufacturing PMI (Nov) (Prev: 47.7)

08:50 GMT - FR: Manufacturing PMI (Nov Final) (Mkt: 51.6 Prev: 51.6)

09:00 GMT - EU: Manufacturing PMI (Nov Final) (Mkt: 46.6 Prev: 46.6)

14:45 GMT - US: Markit Manufacturing PMI (Dec) (Mkt: 52.2 Prev: 52.2)

15:00 GMT - US: Construction Spending (Oct) % m/m (Mkt: 0.4 Prev: 0)

15:00 GMT - US: ISM Manufacturing (Nov) (Mkt: 49.5 Prev: 48.3)

17:00 GMT - IT: New car registrations (Nov) % y/y (Prev: 6.67)

Events

01:00 GMT - NZ: New Zealand Treasury publishes monthly economic indicators

10:00 GMT - EU: ECB's Holzmann speaks in Austria


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