Forex - Asia Highlights - Thursday, 15 February 2018

 05:00 (GMT) 15 Feb

  [Forex Highlights]

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Asia Highlights - Thursday, 15 February 2018 (0100-XKCP-C01)

US Overview:

The key US CPI release surprised on the upside, accompanied by a weak retail sales number. This initially lifted the USD while hitting equities and bonds, the front end in particular, but equities more than reversed their losses while the USD ended up weaker. As equities recovered pressure on USTs was felt more broadly across the curve.

US Highlights:

- US Jan CPI +0.5% vs 0.3% exp, ex food/energy +0.3% vs 0.2% exp.

- US Jan retail sales -0.3% vs +0.2% exp, ex autos 0.0% vs +0.4% exp.

- US Dec business inventories +0.4% vs 0.3% exp.

A quiet European morning as traders looked to US data for inspiration led to a livelier afternoon as US CPI comfortably beat expectations, while retail sales were a miss. That initially proved a toxic mix for equity markets and while the USD generally reacted positively USD/JPY dragged its feet and that heaped more pain on EUR/JPY longs with a dip to 131.60. However, the USD was soon slammed back into reverse with EUR/USD eventually clearing 1.2400 after hitting a low at 1.2275, USD/JPY not matching that and allowing EUR/JPY a recovery above 133.00 as equities turned positive.

GBP was hit in the European morning, UK Foreign Minister Johnson getting the blame with a very pro-Brexit speech, but that not in any way a surprise. GBP did see a recovery later, but with EUR/GBP still well clear of .8850 and GBP/JPY below 150.00.

The NZD continues to lead the main commodity trio, not unusual for a Wednesday as the higher yielder, while AUD traders look to local employment data overnight. CAD got a modest lift as EIA data showed a big build in gasoline inventory, although US production edged higher again by 20k bpd.

EUR/SEK dipped as the Riksbank left policy unchanged with Ohlsson dissenting, but that short-lived. Jansson was altogether more dovish, still focused on the SEK 'not firming too rapidly'.

Asia FX and News:
- Japan's December machinery orders cast doubt on strength of capex ~ Reuters
- Australian employment edges higher in January on part-time surge ~ BBG
- Trump surprises lawmakers with support for gasoline tax hike ~BBG
- Aso: Yen's strength not strong enough to require intervention ~ BBG
- Kuroda: BOJ will continue to take best policy for price target ~ BBG
- Australian employment gains was close to estimates but mainly due to rise in part-time jobs and did not leave a lasting impact on AUD, as the brief dip recovered in short order. AUD/USD back to unchanged for the day in a 40 pips range. AUD/NZD threatens YTD lows circa 1.0720, but recovers to 1.0750. Dollar still broadly heavy from yesterday, but USD/JPY manages to find lower grounds with day low at 106.30, helped by a nonchalant MoF Aso who took some by surprise by saying yen's strength not strong enough to require intervention. EUR/USD stays quietly near Wed high, so does GBP/USD. USD/CAD trades just beneath 1.25 handle and flat at last look.


JP: Key Machinery Orders (Dec) -11.9% m/m (Mkt: -2.3 Prev: 5.7)

JP: Key Machinery Orders (Dec) -5.0% y/y (Mkt: 1.8 Prev: 4.1)

AU: Employment (Jan) 16.0 chg k (Mkt: 15 Prev: 33.5R)

AU: Unemployment (Jan) 5.5% (Mkt: 5.5 Prev: 5.6R)

JP: Capacity Utilisation (Dec) 2.8% m/m (Prev: 0.09)

JP: Industrial Production (Dec F) 2.9% 4cast: 2.7% m/m (Prev: 2.7)

JP: Industrial Production (Dec F) 4.4% 4cast: 4.2% y/y (Prev: 4.2)

Still To Be Released -

05:30 GMT - NL: Unemployment (sa) (Jan) % (Mkt: 4.3 Prev: 4.4)

07:00 GMT - NO: Trade Balance (Jan) NOK bn (Prev: 24.7)

08:00 GMT - ES: Flash CPI (Jan F) % m/m (Mkt: -1.1 Prev: -1.1)

08:00 GMT - ES: Flash CPI (Jan F) % y/y (Mkt: 0.5 Prev: 0.5)

08:00 GMT - ES: Flash HICP (Jan F) % m/m (Mkt: -1.5 Prev: -1.5)

08:00 GMT - ES: Flash HICP (Jan F) % y/y (Mkt: 0.7 Prev: 0.7)

08:00 GMT - IT: Trade Balance (EU) (Dec) EUR bn (Prev: 0.236)

08:00 GMT - IT: Trade Balance (Total) (Dec) EUR bn (Prev: 4380)

08:30 GMT - SE: SCB Unemployment (nsa) (Jan) % (Mkt: 7 Prev: 6)

10:00 GMT - EU: Trade Balance (nsa) (Dec) EUR bn (Mkt: 27 Prev: 26.3)

10:00 GMT - EU: Trade Balance (sa) (Dec) EUR bn (Mkt: 22.3 Prev: 22.5)

10:00 GMT - GR: CPI (Jan) % y/y (Prev: 0.7)

10:00 GMT - GR: HICP (Jan) % y/y (Prev: 1)

13:30 GMT - US: Empire State Survey (Feb) (Mkt: 18 Prev: 17.7)

13:30 GMT - US: Initial Claims (Feb-10) k (Mkt: 228 Prev: 221)

13:30 GMT - US: Philadelphia Fed Survey (Feb) (Mkt: 22 Prev: 22.2)

13:30 GMT - US: PPI (Jan) 4cast: 0.4% m/m (Mkt: 0.4 Prev: -0.1)

13:30 GMT - US: PPI (ex Food & Energy) (Jan) 4cast: 0.3% m/m (Mkt: 0.2 Prev: -0.1)

14:00 GMT - BE: Trade Balance (Dec) EUR mn (Prev: 592.4)

14:15 GMT - US: Capacity Utilization (Jan) 4cast: 77.1% (Mkt: 78 Prev: 77.9)

14:15 GMT - US: Industrial production (Jan) 4cast: 0.4% m/m (Mkt: 0.2 Prev: 0.9)

15:00 GMT - US: NAHB Builders survey (Feb) (Mkt: 72 Prev: 72)


Events & Auctions

03:35 GMT - JP: Bills Auction

08:15 GMT - EU: ECB's Mersch Speaks in Paris

08:30 GMT - WLD: French Finance Minister Le Mairea and IMF's Lagarde Speak in Paris

09:30 GMT - ES: Tap of Oblig. 0.45 10/31/22 (EUR 2bn)

09:30 GMT - ES: Tap of Oblig. 1.4 4/30/28 (EUR 2bn)

09:30 GMT - ES: Tap of Oblig. 2.35 7/30/33 (EUR 2bn)

09:30 GMT - FR: Tap of OAT 0 2/25/21 (EUR 3bn)

09:50 GMT - FR: Tap of OAT 0 3/25/23 (EUR 3bn)

09:50 GMT - FR: Tap of OAT 6 10/25/25 (EUR 2bn)

10:30 GMT - UK: 2057 1.75% Bond Auction (GBP 2.25bn)

10:45 GMT - EU: ECB's Praet Speaks in Paris

10:50 GMT - FR: Tap of OATei 0.1 7/25/47 (EUR 500mn)

10:50 GMT - FR: Tap of OATei 1.85 7/25/27 (EUR 1bn)

10:50 GMT - FR: Tap of OATi 0.1 3/1/25 (EUR 500mn)

12:00 GMT - EU: ECB's Lautenschlager Speaks in Amsterdam

13:30 GMT - CA: ADP Publishes January Payrolls Report

18:00 GMT - US: 30yr TIPS Auction (USD 7bn)

18:30 GMT - CA: BoC's Schembri Speech

22:30 GMT - AU: RBA's Lowe Gives Testimony to Parliamentary Committee

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