Forex - Asia Open - Overnight Highlights


 23:50 (GMT) 15 Jan

  [Forex Highlights]

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Asia Overnight Highlights - 16 Jan 2020

MAJORS

Asia Open - Overnight Highlights (0101-QGVH-C01)

FX Highlights

The Bloomberg dollar spot index was softer in NY on Wednesday after the phase one U.S./China trade deal was signed as it had been priced in. Weaker wholesale inflation data underpinned.

USD/JPY however peaked around 110.00. EUR/USD advanced above 1.1150, a report Trump could tariff European autos over lack of backing on Iran bringing only a marginal correction.

GBP fell back on weak UK CPI but was firmer in NY and rose to 1.3060 in early Asian hours. MPC member Saunders reiterated his support for a rate cut, but had little impact, GBP later recovering its losses.

There was some early weakness in the commodity currencies, but AUD and CAD erased their losses and more as equities advanced, even with a dip in oil.

Data/Events Highlights:

- US Dec PPI +0.1% vs 0.2% exp, ex food and energy +0.1% vs 0.2% exp.

- US Jan Empire State survey rise to 4.8 from 3.3 vs 3.6 exp.

- UK CPI fell to a 3 year low of 1.4% y/y on the core measure, 1.3% y/y on the headline, increasing expectations of a rate cut in January.

- German real GDP rose by 0.6% y/y in 2019, sharply lower than the 1.5% y/y recorded in 2018 and 2.5% y/y in 2017.

- In November, Eurozone industrial production rose by 0.2% m/m after declining by 0.9% m/m in October.

- VIX index: 12.42 (+0.24%)

- Gold Spot: $1,555.23/oz (-0.07%)

- ICE Brent front contract: $64.00 ($-0.49)

- Nymex WTI front contract: $58.11 (+$0.30)

- Reuters/Jefferies Commodities Index: 182.69 (-0.52%)

- 10y UST: 1.783% (-3bp) (Asia morning)

- DJI: 29,030.22 (+0.31%); S&P: 3,289.29 (+0.19%); Nasdaq: 9,258.70 (+0.08%)

Data/Events Ahead:

U.S. Dec retail sales are expected to rise by 0.3% overall with a stronger 0.5% gain ex food and energy. Philly Fed survey is also due. Housing signals will come from Jan's NAHB homebuilders' survey. Weekly initial claims, Nov business inventories and Nov TICS capital flows are also scheduled.

Japan's core machinery orders are likely to remain weak in November. We expect a further decline of 7.5% y/y in November following a drop of 6.1% y/y earlier. December PPI will be out today as well.

Germany's final reading of December HICP inflation should confirm the flash reading of 1.5% y/y, thus bringing the 2019 average inflation at 1.4%.

The BoE Credit Conditions Survey may prove to be an important ingredient to the looming MPC meeting at the end of the month. RICS housing market survey report will also be released.

EMERGING ASIA

Asia Open - Overnight Highlights (0101-QGVH-C02)

FX Highlights:

Majority of the Asian currencies traded with a cautious undertone and were roughly stable in Wednesday's Asian session ahead of the official signing of the U.S./China 'phase one' trade deal. However, risk appetite curtailed slightly following reports stating that further cuts in existing U.S. tariffs on China goods were only likely to happen after November's U.S. presidential elections. PHP was the only distinct loser, down 0.32% against the dollar. The biggest sell-off of Philippine equities by foreign investors since 23 December weighed on the Philippine Peso.

USD/CNH traded mostly horizontally around 6.8900 in eth overnight session even as the trade deal was signed and details released as the news was generally priced in. Potentials remain for the pair to pull back and move toward six-month lows of 6.8600, ahead of the Lunar New Year and if risk-on sentiment continues. USD/CNY onshore spot rose on Wednesday amid reports that US will not remove China tariffs until the Nov 2020 elections, but 6.9000 still remained intact and pair returned to 6.8900 levels into the close. More downside bias expected after yuan's removal from the currency manipulator list, with eyes now on next support at 6.8320 for USD/CNY. 1Y NDFs reversed from Asia session highs of 6.9824 and traded close to 6.9700 in NY.

USD/SGD remained capped at 1.3485 resistance for a third day even as risk sentiment deteriorated in Asia on Wednesday on reports that US will keep tariffs on China until the November elections and phase 2 talks. Pair however traded with a downside bias to 1.3460 levels in NY as the phase one trade deal was signed and details released. Support level of 1.3444 still holds, with resistance at 1.3510. A downward momentum could bring the pair to the lows of 1.3300.

USD/IDR 1M NDFs traded horizontally around 13720 in the overnight session after touching highs of 13758 earlier in Asia. USD/IDR onshore spot traded with an upside bias on Wednesday morning and rose to 13720 highs from previous close of 13680. Reports saying the US will keep tariffs on Chinese imports until the November elections and phase 2 talks dented the optimism around the phase one trade deal. BI's presence however possibly stalled further gains in the pair. A positive surprise in December's exports and balanced trade brought the pair back to sub-13700 levels in the afternoon. Pair sees supports at 13645 and 13600, but we believe the doors to 13500 are now open if positive trade sentiment is sustained. Further geopolitical tensions could however bring the pair back to 13800 levels.

USD/INR 1M NDFs traded bearishly to sub-70.950 levels in NY from highs of 71.200 earlier in the day as sentiment regenerated with the signing of the phase one trade deal. USD/INR onshore spot gapped higher to open at 70.990 on Wednesday from previous close of 70.880 amid a deterioration in risk sentiment after reports that US will keep China tariffs until Nov 2020. Pair however traded with a downside bias and break of the 71 handle proved temporary, with prices seen dropping to lows of 70.800 in the afternoon. Bond traders are expecting another leg of Operation Twist by the RBI, and that may be supporting the rupee for now. We however maintain our view that break below the 71 handle will likely remain temporary given a host of domestic challenges.

Data/Events Highlights:

Indonesia's December exports turned positive after 13 consecutive months of decline, coming in at 1.28% y/y. Imports however remained weak at -5.62% y/y which helped to narrow the trade deficit to $30mn from -$1330mn previously.

India's December exports slid by 1.8% y/y, slightly worse than last month's -0.3% y/y but better than our expectations. Imports were down -9.0% y/y much like we had expected and trade deficit narrowed to $11.25bn.

Philippines' November overseas remittance growth was slower than expected at 2.0% y/y.

Data/Events Ahead:

No tier 1 data is reported in EM Asia on Thursday.

DATA RELEASES DUE TODAY

23:50 GMT / 07:50 SGT - JP: PPI (Dec) [Mkt: 0.1, Prev: 0.2]

23:50 GMT / 07:50 SGT - JP: PPI (Dec) [Mkt: 0.9, Prev: 0.1]

23:50 GMT / 07:50 SGT - JP: Core Machine orders (Nov) 4cast: -7.5% y/y [Mkt: -5.4, Prev: -6.1]

00:01 GMT / 08:01 SGT - UK: RICS Housing Survey (Dec) [Mkt: -8, Prev: -12]

00:30 GMT / 08:30 SGT - AU: Home Loans (Nov) [Mkt: 1.4, Prev: 2]

13:30 GMT / 21:30 SGT - US: Initial Claims (Jan 11) [Mkt: 217, Prev: 214]

13:30 GMT / 21:30 SGT - US: Philadelphia Fed Survey (Jan) [Mkt: 3.4, Prev: 2.4]

13:30 GMT / 21:30 SGT - US: Retail Sales (ex Autos) (Dec) 4cast: 0.5% m/m [Mkt: 0.5, Prev: 0.1]

13:30 GMT / 21:30 SGT - US: Import Price Index (Dec) [Mkt: 0.4, Prev: 0.2]

13:30 GMT / 21:30 SGT - US: Retail Sales (Dec) 4cast: 0.3% m/m [Mkt: 0.3, Prev: 0.2]

15:00 GMT / 23:00 SGT - US: Business Inventories (Nov) 4cast: -0.2% m/m [Mkt: -0.1, Prev: 0.2]

15:00 GMT / 23:00 SGT - US: NAHB Builders survey (Jan) [Mkt: 74, Prev: 76]

21:00 GMT / 05:00 SGT - US: Net Long-term TICS Flows (Nov) [Prev: 32.5]

21:30 GMT / 05:30 SGT - NZ: Business NZ Manufacturing PMI (Dec) [Prev: 51.4]

EVENTS & AUCTIONS

18:00 GMT / 02:00 SGT - EU: ECB's Lagarde Speaks in Frankfurt

21:00 GMT / 05:00 SGT - NZ: NZ Government's 5-Month Financial Statements


Forex - Asia Open - Overnight Highlights


 23:51 (GMT) 14 Jan

 [Forex Highlights]

Asia Overnight Highlights - 15 Jan 2020

MAJORS

FX Highlights

The Bloomberg dollar spot index edged a little firmer in a quiet European morning, gaining ground against the EUR, CAD and GBP but moving little against the JPY. The movement in North America was however in the opposite direction. A soft US CPI got little response but may have weighed on USD sentiment.

USD/JPY was never very far from 110 but fell to the day's lows on a report that US tariffs on China would persist through the election.

GBP/USD outperformed pushing above 1.30 while EUR/USD failed to fully erase earlier losses that bottomed a little above 1.11. Early in the session EUR/GBP broke the December high, but fell back after that, though the bund/gilt spread narrowed to its lowest level since May 2018.

Early weakness in equities coincided with USD gains against the riskier currencies, but did not persist. USD/CAD fully reversed early gains but AUD/CAD held above .90.

Data/Events Highlights:

- US Dec CPI +0.2% vs 0.3% exp, ex food and energy +0.1% vs 0.2% exp.

- VIX index: 12.39 (+0.57%)

- Gold Spot: $1,548.84/oz (+0.16%)

- ICE Brent front contract: $64.49 (+$0.29)

- Nymex WTI front contract: $58.20 ($-0.03)

- Reuters/Jefferies Commodities Index: 183.64 (+0.35%)

- 10y UST: 1.811% (-3bp) (Asia morning)

- DJI: 28,939.67 (+0.11%); S&P: 3,283.15 (-0.15%); Nasdaq: 9,251.33 (-0.24%)

Data/Events Ahead:

U.S. Dec PPI on Wednesday should see 0.3% gains both overall and ex food and energy, the core rate correcting from a below trend Nov.

Insight on manufacturing will come from Jan's Empire State today.

Eurozone November industrial production is expected to rise by 0.4% m/m but still be some 0.1% q/q lower compared to the three months ending in August. On the same day, November trade balance data will be released.

We anticipate no further fall in the UK CPI inflation rate in December, instead once again staying at 1.5% y/y, still a 3-year low, but further consolidating the drop from 2%-plus seen since the middle of last year.

EMERGING ASIA

FX Highlights:

A mixed day for Asian currencies on Tuesday following the announcement of the U.S. Treasury currency manipulator list, which were largely in favour to Asia. PHP reopened for trading on Tuesday, after markets closed due to Taal volcanic eruption on Monday. PHP was the biggest winner, up 0.30% against the dollar as pair caught up with the gains seen in Asia emerging markets. CNY was up 0.13%, as U.S. removed China's label as a currency manipulator. TWD was up 0.12% against the dollar. Meanwhile, both MYR and THB were down 0.25% and 0.19% respectively against the greenback.

USD/CNH traded mostly below 6.8900 overnight but upside pressures to 6.9000 returned in early Asian hours on Wednesday following a report that China tariffs will stay until the US Nov elections. Further downside toward six-month lows of 6.8600 levels remains likely, ahead of the trade deal and Lunar New Year. USD/CNY onshore spot also remained depressed below 6.9000 on Tuesday as trade deal optimism persisted and sentiment was boosted by China being de-labeled as a currency manipulator. Fresh 5-month lows of 6.8661 were printed. More downside bias expected after yuan's removal from the currency manipulator list, with eyes now on next support at 6.8320 for USD/CNY. 1Y NDFs saw sharp gains early this morning to 6.9802 at last look after trading below 6.9700 in NY.

USD/SGD reversed gains from the European session to trade below 1.3470 in NY but upside pressures returned in early Asian hours on Wednesday and pair touched 1.3480 highs at last check. Return of the tariff thread weighed on Asian currencies again as reports suggested US will keep tariffs on China until the November elections and phase 2 talks. Support level of 1.3444 still holds, with resistance at 1.3510. A downward momentum could bring the pair to the lows of 1.3300.

USD/IDR 1M NDFs saw gains to 13720+ levels in late NY hours from sub-13680 levels seen in Tuesday's Asian session. USD/IDR onshore spot gapped lower again on Tuesday to open at 13655 from previous close of 13673 and traded horizontally around 13650 in the morning. Trade optimism and US treasury relief underpinned. Meanwhile, BI's non-intervention and UAE's investment are further boosting rupiah sentiment. Pair however reversed slightly higher to 13680 into the close. Supports seen at 13645 and 13600, but we believe the doors to 13500 are now open if positive trade sentiment is sustained.

USD/INR 1M NDFs traded higher to 71.150+ levels in late Asian hours on Tuesday and traded mostly sideways thereafter. USD/INR onshore spot gapped lower again to open at 70.740 on Tuesday from previous close of 70.860 amid further improvement in sentiment after US Treasury removed China's labeling as a currency manipulator. However gains in the rupee could not catch up with Asian peers and pair traded back above 70.900 in the afternoon given the surge in headline inflation to over 5-year highs in December. Food price gains underpinned the surge in inflation, and this will likely delay any further easing by the RBI. We maintain our view that break below the 71 handle will likely remain temporary given a host of domestic challenges.

Data/Events Highlights:

China's December exports and imports both came in stronger-than-expected. Exports rose 7.6% y/y in December after four consecutive months of contraction, while imports climbed 16.3% y/y from 0.3% y/y in November partly due to base effects.

India's December WPI also came in stronger than expected at 2.59% y/y from 0.58% y/y previously.

Data/Events Ahead:

December trade data for both India and Indonesia is due in Asia today, and we expect narrower trade deficits for both.

DATA RELEASES DUE TODAY

PH: Overseas Remittances (Nov) 4cast: 3.5% y/y [Mkt: 4, Prev: 8]

PH: Overseas Remittances (Nov) 4cast: 2.407USD bn [Mkt: 2.436, Prev: 2.671]

IN: Exports (Dec) 4cast: -3% y/y [Prev: -0.3]

IN: Imports (Dec) 4cast: -9% y/y [Prev: -12.7]

IN: Trade Balance (Dec) 4cast: -10.224USD bn [Mkt: -11.6, Prev: -12.12]

23:50 GMT / 07:50 SGT - JP: M2 Money Supply (Dec) [Prev: 2.8]

04:00 GMT / 12:00 SGT - ID: Exports (Dec) 4cast: -3.3% y/y [Mkt: -2.2, Prev: -5.67]

04:00 GMT / 12:00 SGT - ID: Imports (Dec) 4cast: -7% y/y [Mkt: -5, Prev: -9.24]

04:00 GMT / 12:00 SGT - ID: Trade Balance (Dec) 4cast: -430USD mn [Mkt: -430, Prev: -1330]

09:30 GMT / 17:30 SGT - UK: CPI (Dec) [Mkt: 0.2, Prev: 0.2]

09:30 GMT / 17:30 SGT - UK: Output Prices Core (unadj.) (Dec) [Mkt: 0, Prev: -0.2]

09:30 GMT / 17:30 SGT - UK: Input Prices (nsa) (Dec) [Mkt: 0.2, Prev: -0.3]

09:30 GMT / 17:30 SGT - UK: CPI (Dec) 4cast: 1.5% y/y [Mkt: 1.5, Prev: 1.5]

09:30 GMT / 17:30 SGT - UK: Output Prices (unadj.) (Dec) [Mkt: 1, Prev: 0.5]

09:30 GMT / 17:30 SGT - UK: Input Prices (nsa) (Dec) [Mkt: -0.9, Prev: -2.7]

09:30 GMT / 17:30 SGT - UK: Retail Sales (inc Auto Fuel) (Dec) 4cast: 0.5% m/m [Mkt: 0.6, Prev: -0.6]

09:30 GMT / 17:30 SGT - UK: Retail Sales (ex Auto Fuel) (Dec) [Mkt: 0.8, Prev: -0.6]

09:30 GMT / 17:30 SGT - UK: Retail Sales (ex Auto Fuel) (Dec) [Mkt: 3, Prev: 0.8]

09:30 GMT / 17:30 SGT - UK: Retail Sales (inc Auto Fuel) (Dec) [Mkt: 2.7, Prev: 1]

10:00 GMT / 18:00 SGT - EU: Trade Balance (sa) (Nov) [Mkt: 22, Prev: 24.5]

10:00 GMT / 18:00 SGT - EU: Industrial production (Nov) [Mkt: -1, Prev: -2.2]

13:30 GMT / 21:30 SGT - US: PPI (ex Food & Energy) (Dec) 4cast: 0.3% m/m [Mkt: 0.2, Prev: -0.2]

13:30 GMT / 21:30 SGT - US: PPI (Dec) 4cast: 0.3% m/m [Mkt: 0.2, Prev: 0]

13:30 GMT / 21:30 SGT - US: Empire State Survey (Jan) [Mkt: 3.6, Prev: 3.5]

14:00 GMT / 22:00 SGT - CA: Existing Home Sales (Dec) [Prev: 0.6]

23:50 GMT / 07:50 SGT - JP: PPI (Dec) [Mkt: 0.1, Prev: 0.2]

23:50 GMT / 07:50 SGT - JP: PPI (Dec) [Mkt: 0.5, Prev: 0.1]

23:50 GMT / 07:50 SGT - JP: Core Machine orders (Nov) 4cast: -7.5% y/y [Mkt: -5.4, Prev: -6.1]

EVENTS & AUCTIONS

00:30 GMT / 08:30 SGT - JP: BoJ's Kuroda Speaks at Branch Managers' Meeting

08:40 GMT / 16:40 SGT - UK: BoE's Saunders Speaks in Bangor, Northern Ireland

16:00 GMT / 00:00 SGT - US: Fed's Harker speaks in New York

17:00 GMT / 01:00 SGT - US: Fed's Kaplan speaks in New York

19:00 GMT / 03:00 SGT - US: Fed Releases Beige Book


Forex - Asia Open - Overnight Highlights


 23:51 (GMT) 14 Jan

 [Forex Highlights]

Asia Overnight Highlights - 15 Jan 2020

MAJORS

FX Highlights

The Bloomberg dollar spot index edged a little firmer in a quiet European morning, gaining ground against the EUR, CAD and GBP but moving little against the JPY. The movement in North America was however in the opposite direction. A soft US CPI got little response but may have weighed on USD sentiment.

USD/JPY was never very far from 110 but fell to the day's lows on a report that US tariffs on China would persist through the election.

GBP/USD outperformed pushing above 1.30 while EUR/USD failed to fully erase earlier losses that bottomed a little above 1.11. Early in the session EUR/GBP broke the December high, but fell back after that, though the bund/gilt spread narrowed to its lowest level since May 2018.

Early weakness in equities coincided with USD gains against the riskier currencies, but did not persist. USD/CAD fully reversed early gains but AUD/CAD held above .90.

Data/Events Highlights:

- US Dec CPI +0.2% vs 0.3% exp, ex food and energy +0.1% vs 0.2% exp.

- VIX index: 12.39 (+0.57%)

- Gold Spot: $1,548.84/oz (+0.16%)

- ICE Brent front contract: $64.49 (+$0.29)

- Nymex WTI front contract: $58.20 ($-0.03)

- Reuters/Jefferies Commodities Index: 183.64 (+0.35%)

- 10y UST: 1.811% (-3bp) (Asia morning)

- DJI: 28,939.67 (+0.11%); S&P: 3,283.15 (-0.15%); Nasdaq: 9,251.33 (-0.24%)

Data/Events Ahead:

U.S. Dec PPI on Wednesday should see 0.3% gains both overall and ex food and energy, the core rate correcting from a below trend Nov.

Insight on manufacturing will come from Jan's Empire State today.

Eurozone November industrial production is expected to rise by 0.4% m/m but still be some 0.1% q/q lower compared to the three months ending in August. On the same day, November trade balance data will be released.

We anticipate no further fall in the UK CPI inflation rate in December, instead once again staying at 1.5% y/y, still a 3-year low, but further consolidating the drop from 2%-plus seen since the middle of last year.

EMERGING ASIA

FX Highlights:

A mixed day for Asian currencies on Tuesday following the announcement of the U.S. Treasury currency manipulator list, which were largely in favour to Asia. PHP reopened for trading on Tuesday, after markets closed due to Taal volcanic eruption on Monday. PHP was the biggest winner, up 0.30% against the dollar as pair caught up with the gains seen in Asia emerging markets. CNY was up 0.13%, as U.S. removed China's label as a currency manipulator. TWD was up 0.12% against the dollar. Meanwhile, both MYR and THB were down 0.25% and 0.19% respectively against the greenback.

USD/CNH traded mostly below 6.8900 overnight but upside pressures to 6.9000 returned in early Asian hours on Wednesday following a report that China tariffs will stay until the US Nov elections. Further downside toward six-month lows of 6.8600 levels remains likely, ahead of the trade deal and Lunar New Year. USD/CNY onshore spot also remained depressed below 6.9000 on Tuesday as trade deal optimism persisted and sentiment was boosted by China being de-labeled as a currency manipulator. Fresh 5-month lows of 6.8661 were printed. More downside bias expected after yuan's removal from the currency manipulator list, with eyes now on next support at 6.8320 for USD/CNY. 1Y NDFs saw sharp gains early this morning to 6.9802 at last look after trading below 6.9700 in NY.

USD/SGD reversed gains from the European session to trade below 1.3470 in NY but upside pressures returned in early Asian hours on Wednesday and pair touched 1.3480 highs at last check. Return of the tariff thread weighed on Asian currencies again as reports suggested US will keep tariffs on China until the November elections and phase 2 talks. Support level of 1.3444 still holds, with resistance at 1.3510. A downward momentum could bring the pair to the lows of 1.3300.

USD/IDR 1M NDFs saw gains to 13720+ levels in late NY hours from sub-13680 levels seen in Tuesday's Asian session. USD/IDR onshore spot gapped lower again on Tuesday to open at 13655 from previous close of 13673 and traded horizontally around 13650 in the morning. Trade optimism and US treasury relief underpinned. Meanwhile, BI's non-intervention and UAE's investment are further boosting rupiah sentiment. Pair however reversed slightly higher to 13680 into the close. Supports seen at 13645 and 13600, but we believe the doors to 13500 are now open if positive trade sentiment is sustained.

USD/INR 1M NDFs traded higher to 71.150+ levels in late Asian hours on Tuesday and traded mostly sideways thereafter. USD/INR onshore spot gapped lower again to open at 70.740 on Tuesday from previous close of 70.860 amid further improvement in sentiment after US Treasury removed China's labeling as a currency manipulator. However gains in the rupee could not catch up with Asian peers and pair traded back above 70.900 in the afternoon given the surge in headline inflation to over 5-year highs in December. Food price gains underpinned the surge in inflation, and this will likely delay any further easing by the RBI. We maintain our view that break below the 71 handle will likely remain temporary given a host of domestic challenges.

Data/Events Highlights:

China's December exports and imports both came in stronger-than-expected. Exports rose 7.6% y/y in December after four consecutive months of contraction, while imports climbed 16.3% y/y from 0.3% y/y in November partly due to base effects.

India's December WPI also came in stronger than expected at 2.59% y/y from 0.58% y/y previously.

Data/Events Ahead:

December trade data for both India and Indonesia is due in Asia today, and we expect narrower trade deficits for both.

DATA RELEASES DUE TODAY

PH: Overseas Remittances (Nov) 4cast: 3.5% y/y [Mkt: 4, Prev: 8]

PH: Overseas Remittances (Nov) 4cast: 2.407USD bn [Mkt: 2.436, Prev: 2.671]

IN: Exports (Dec) 4cast: -3% y/y [Prev: -0.3]

IN: Imports (Dec) 4cast: -9% y/y [Prev: -12.7]

IN: Trade Balance (Dec) 4cast: -10.224USD bn [Mkt: -11.6, Prev: -12.12]

23:50 GMT / 07:50 SGT - JP: M2 Money Supply (Dec) [Prev: 2.8]

04:00 GMT / 12:00 SGT - ID: Exports (Dec) 4cast: -3.3% y/y [Mkt: -2.2, Prev: -5.67]

04:00 GMT / 12:00 SGT - ID: Imports (Dec) 4cast: -7% y/y [Mkt: -5, Prev: -9.24]

04:00 GMT / 12:00 SGT - ID: Trade Balance (Dec) 4cast: -430USD mn [Mkt: -430, Prev: -1330]

09:30 GMT / 17:30 SGT - UK: CPI (Dec) [Mkt: 0.2, Prev: 0.2]

09:30 GMT / 17:30 SGT - UK: Output Prices Core (unadj.) (Dec) [Mkt: 0, Prev: -0.2]

09:30 GMT / 17:30 SGT - UK: Input Prices (nsa) (Dec) [Mkt: 0.2, Prev: -0.3]

09:30 GMT / 17:30 SGT - UK: CPI (Dec) 4cast: 1.5% y/y [Mkt: 1.5, Prev: 1.5]

09:30 GMT / 17:30 SGT - UK: Output Prices (unadj.) (Dec) [Mkt: 1, Prev: 0.5]

09:30 GMT / 17:30 SGT - UK: Input Prices (nsa) (Dec) [Mkt: -0.9, Prev: -2.7]

09:30 GMT / 17:30 SGT - UK: Retail Sales (inc Auto Fuel) (Dec) 4cast: 0.5% m/m [Mkt: 0.6, Prev: -0.6]

09:30 GMT / 17:30 SGT - UK: Retail Sales (ex Auto Fuel) (Dec) [Mkt: 0.8, Prev: -0.6]

09:30 GMT / 17:30 SGT - UK: Retail Sales (ex Auto Fuel) (Dec) [Mkt: 3, Prev: 0.8]

09:30 GMT / 17:30 SGT - UK: Retail Sales (inc Auto Fuel) (Dec) [Mkt: 2.7, Prev: 1]

10:00 GMT / 18:00 SGT - EU: Trade Balance (sa) (Nov) [Mkt: 22, Prev: 24.5]

10:00 GMT / 18:00 SGT - EU: Industrial production (Nov) [Mkt: -1, Prev: -2.2]

13:30 GMT / 21:30 SGT - US: PPI (ex Food & Energy) (Dec) 4cast: 0.3% m/m [Mkt: 0.2, Prev: -0.2]

13:30 GMT / 21:30 SGT - US: PPI (Dec) 4cast: 0.3% m/m [Mkt: 0.2, Prev: 0]

13:30 GMT / 21:30 SGT - US: Empire State Survey (Jan) [Mkt: 3.6, Prev: 3.5]

14:00 GMT / 22:00 SGT - CA: Existing Home Sales (Dec) [Prev: 0.6]

23:50 GMT / 07:50 SGT - JP: PPI (Dec) [Mkt: 0.1, Prev: 0.2]

23:50 GMT / 07:50 SGT - JP: PPI (Dec) [Mkt: 0.5, Prev: 0.1]

23:50 GMT / 07:50 SGT - JP: Core Machine orders (Nov) 4cast: -7.5% y/y [Mkt: -5.4, Prev: -6.1]

EVENTS & AUCTIONS

00:30 GMT / 08:30 SGT - JP: BoJ's Kuroda Speaks at Branch Managers' Meeting

08:40 GMT / 16:40 SGT - UK: BoE's Saunders Speaks in Bangor, Northern Ireland

16:00 GMT / 00:00 SGT - US: Fed's Harker speaks in New York

17:00 GMT / 01:00 SGT - US: Fed's Kaplan speaks in New York

19:00 GMT / 03:00 SGT - US: Fed Releases Beige Book


Forex - Asia Open - Overnight Highlights


 23:51 (GMT) 14 Jan

 [Forex Highlights]

Asia Overnight Highlights - 15 Jan 2020

MAJORS

FX Highlights

The Bloomberg dollar spot index edged a little firmer in a quiet European morning, gaining ground against the EUR, CAD and GBP but moving little against the JPY. The movement in North America was however in the opposite direction. A soft US CPI got little response but may have weighed on USD sentiment.

USD/JPY was never very far from 110 but fell to the day's lows on a report that US tariffs on China would persist through the election.

GBP/USD outperformed pushing above 1.30 while EUR/USD failed to fully erase earlier losses that bottomed a little above 1.11. Early in the session EUR/GBP broke the December high, but fell back after that, though the bund/gilt spread narrowed to its lowest level since May 2018.

Early weakness in equities coincided with USD gains against the riskier currencies, but did not persist. USD/CAD fully reversed early gains but AUD/CAD held above .90.

Data/Events Highlights:

- US Dec CPI +0.2% vs 0.3% exp, ex food and energy +0.1% vs 0.2% exp.

- VIX index: 12.39 (+0.57%)

- Gold Spot: $1,548.84/oz (+0.16%)

- ICE Brent front contract: $64.49 (+$0.29)

- Nymex WTI front contract: $58.20 ($-0.03)

- Reuters/Jefferies Commodities Index: 183.64 (+0.35%)

- 10y UST: 1.811% (-3bp) (Asia morning)

- DJI: 28,939.67 (+0.11%); S&P: 3,283.15 (-0.15%); Nasdaq: 9,251.33 (-0.24%)

Data/Events Ahead:

U.S. Dec PPI on Wednesday should see 0.3% gains both overall and ex food and energy, the core rate correcting from a below trend Nov.

Insight on manufacturing will come from Jan's Empire State today.

Eurozone November industrial production is expected to rise by 0.4% m/m but still be some 0.1% q/q lower compared to the three months ending in August. On the same day, November trade balance data will be released.

We anticipate no further fall in the UK CPI inflation rate in December, instead once again staying at 1.5% y/y, still a 3-year low, but further consolidating the drop from 2%-plus seen since the middle of last year.

EMERGING ASIA

FX Highlights:

A mixed day for Asian currencies on Tuesday following the announcement of the U.S. Treasury currency manipulator list, which were largely in favour to Asia. PHP reopened for trading on Tuesday, after markets closed due to Taal volcanic eruption on Monday. PHP was the biggest winner, up 0.30% against the dollar as pair caught up with the gains seen in Asia emerging markets. CNY was up 0.13%, as U.S. removed China's label as a currency manipulator. TWD was up 0.12% against the dollar. Meanwhile, both MYR and THB were down 0.25% and 0.19% respectively against the greenback.

USD/CNH traded mostly below 6.8900 overnight but upside pressures to 6.9000 returned in early Asian hours on Wednesday following a report that China tariffs will stay until the US Nov elections. Further downside toward six-month lows of 6.8600 levels remains likely, ahead of the trade deal and Lunar New Year. USD/CNY onshore spot also remained depressed below 6.9000 on Tuesday as trade deal optimism persisted and sentiment was boosted by China being de-labeled as a currency manipulator. Fresh 5-month lows of 6.8661 were printed. More downside bias expected after yuan's removal from the currency manipulator list, with eyes now on next support at 6.8320 for USD/CNY. 1Y NDFs saw sharp gains early this morning to 6.9802 at last look after trading below 6.9700 in NY.

USD/SGD reversed gains from the European session to trade below 1.3470 in NY but upside pressures returned in early Asian hours on Wednesday and pair touched 1.3480 highs at last check. Return of the tariff thread weighed on Asian currencies again as reports suggested US will keep tariffs on China until the November elections and phase 2 talks. Support level of 1.3444 still holds, with resistance at 1.3510. A downward momentum could bring the pair to the lows of 1.3300.

USD/IDR 1M NDFs saw gains to 13720+ levels in late NY hours from sub-13680 levels seen in Tuesday's Asian session. USD/IDR onshore spot gapped lower again on Tuesday to open at 13655 from previous close of 13673 and traded horizontally around 13650 in the morning. Trade optimism and US treasury relief underpinned. Meanwhile, BI's non-intervention and UAE's investment are further boosting rupiah sentiment. Pair however reversed slightly higher to 13680 into the close. Supports seen at 13645 and 13600, but we believe the doors to 13500 are now open if positive trade sentiment is sustained.

USD/INR 1M NDFs traded higher to 71.150+ levels in late Asian hours on Tuesday and traded mostly sideways thereafter. USD/INR onshore spot gapped lower again to open at 70.740 on Tuesday from previous close of 70.860 amid further improvement in sentiment after US Treasury removed China's labeling as a currency manipulator. However gains in the rupee could not catch up with Asian peers and pair traded back above 70.900 in the afternoon given the surge in headline inflation to over 5-year highs in December. Food price gains underpinned the surge in inflation, and this will likely delay any further easing by the RBI. We maintain our view that break below the 71 handle will likely remain temporary given a host of domestic challenges.

Data/Events Highlights:

China's December exports and imports both came in stronger-than-expected. Exports rose 7.6% y/y in December after four consecutive months of contraction, while imports climbed 16.3% y/y from 0.3% y/y in November partly due to base effects.

India's December WPI also came in stronger than expected at 2.59% y/y from 0.58% y/y previously.

Data/Events Ahead:

December trade data for both India and Indonesia is due in Asia today, and we expect narrower trade deficits for both.

DATA RELEASES DUE TODAY

PH: Overseas Remittances (Nov) 4cast: 3.5% y/y [Mkt: 4, Prev: 8]

PH: Overseas Remittances (Nov) 4cast: 2.407USD bn [Mkt: 2.436, Prev: 2.671]

IN: Exports (Dec) 4cast: -3% y/y [Prev: -0.3]

IN: Imports (Dec) 4cast: -9% y/y [Prev: -12.7]

IN: Trade Balance (Dec) 4cast: -10.224USD bn [Mkt: -11.6, Prev: -12.12]

23:50 GMT / 07:50 SGT - JP: M2 Money Supply (Dec) [Prev: 2.8]

04:00 GMT / 12:00 SGT - ID: Exports (Dec) 4cast: -3.3% y/y [Mkt: -2.2, Prev: -5.67]

04:00 GMT / 12:00 SGT - ID: Imports (Dec) 4cast: -7% y/y [Mkt: -5, Prev: -9.24]

04:00 GMT / 12:00 SGT - ID: Trade Balance (Dec) 4cast: -430USD mn [Mkt: -430, Prev: -1330]

09:30 GMT / 17:30 SGT - UK: CPI (Dec) [Mkt: 0.2, Prev: 0.2]

09:30 GMT / 17:30 SGT - UK: Output Prices Core (unadj.) (Dec) [Mkt: 0, Prev: -0.2]

09:30 GMT / 17:30 SGT - UK: Input Prices (nsa) (Dec) [Mkt: 0.2, Prev: -0.3]

09:30 GMT / 17:30 SGT - UK: CPI (Dec) 4cast: 1.5% y/y [Mkt: 1.5, Prev: 1.5]

09:30 GMT / 17:30 SGT - UK: Output Prices (unadj.) (Dec) [Mkt: 1, Prev: 0.5]

09:30 GMT / 17:30 SGT - UK: Input Prices (nsa) (Dec) [Mkt: -0.9, Prev: -2.7]

09:30 GMT / 17:30 SGT - UK: Retail Sales (inc Auto Fuel) (Dec) 4cast: 0.5% m/m [Mkt: 0.6, Prev: -0.6]

09:30 GMT / 17:30 SGT - UK: Retail Sales (ex Auto Fuel) (Dec) [Mkt: 0.8, Prev: -0.6]

09:30 GMT / 17:30 SGT - UK: Retail Sales (ex Auto Fuel) (Dec) [Mkt: 3, Prev: 0.8]

09:30 GMT / 17:30 SGT - UK: Retail Sales (inc Auto Fuel) (Dec) [Mkt: 2.7, Prev: 1]

10:00 GMT / 18:00 SGT - EU: Trade Balance (sa) (Nov) [Mkt: 22, Prev: 24.5]

10:00 GMT / 18:00 SGT - EU: Industrial production (Nov) [Mkt: -1, Prev: -2.2]

13:30 GMT / 21:30 SGT - US: PPI (ex Food & Energy) (Dec) 4cast: 0.3% m/m [Mkt: 0.2, Prev: -0.2]

13:30 GMT / 21:30 SGT - US: PPI (Dec) 4cast: 0.3% m/m [Mkt: 0.2, Prev: 0]

13:30 GMT / 21:30 SGT - US: Empire State Survey (Jan) [Mkt: 3.6, Prev: 3.5]

14:00 GMT / 22:00 SGT - CA: Existing Home Sales (Dec) [Prev: 0.6]

23:50 GMT / 07:50 SGT - JP: PPI (Dec) [Mkt: 0.1, Prev: 0.2]

23:50 GMT / 07:50 SGT - JP: PPI (Dec) [Mkt: 0.5, Prev: 0.1]

23:50 GMT / 07:50 SGT - JP: Core Machine orders (Nov) 4cast: -7.5% y/y [Mkt: -5.4, Prev: -6.1]

EVENTS & AUCTIONS

00:30 GMT / 08:30 SGT - JP: BoJ's Kuroda Speaks at Branch Managers' Meeting

08:40 GMT / 16:40 SGT - UK: BoE's Saunders Speaks in Bangor, Northern Ireland

16:00 GMT / 00:00 SGT - US: Fed's Harker speaks in New York

17:00 GMT / 01:00 SGT - US: Fed's Kaplan speaks in New York

19:00 GMT / 03:00 SGT - US: Fed Releases Beige Book


Forex - Asia Open - Overnight Highlights


 23:51 (GMT) 14 Jan

 [Forex Highlights]

Asia Overnight Highlights - 15 Jan 2020

MAJORS

FX Highlights

The Bloomberg dollar spot index edged a little firmer in a quiet European morning, gaining ground against the EUR, CAD and GBP but moving little against the JPY. The movement in North America was however in the opposite direction. A soft US CPI got little response but may have weighed on USD sentiment.

USD/JPY was never very far from 110 but fell to the day's lows on a report that US tariffs on China would persist through the election.

GBP/USD outperformed pushing above 1.30 while EUR/USD failed to fully erase earlier losses that bottomed a little above 1.11. Early in the session EUR/GBP broke the December high, but fell back after that, though the bund/gilt spread narrowed to its lowest level since May 2018.

Early weakness in equities coincided with USD gains against the riskier currencies, but did not persist. USD/CAD fully reversed early gains but AUD/CAD held above .90.

Data/Events Highlights:

- US Dec CPI +0.2% vs 0.3% exp, ex food and energy +0.1% vs 0.2% exp.

- VIX index: 12.39 (+0.57%)

- Gold Spot: $1,548.84/oz (+0.16%)

- ICE Brent front contract: $64.49 (+$0.29)

- Nymex WTI front contract: $58.20 ($-0.03)

- Reuters/Jefferies Commodities Index: 183.64 (+0.35%)

- 10y UST: 1.811% (-3bp) (Asia morning)

- DJI: 28,939.67 (+0.11%); S&P: 3,283.15 (-0.15%); Nasdaq: 9,251.33 (-0.24%)

Data/Events Ahead:

U.S. Dec PPI on Wednesday should see 0.3% gains both overall and ex food and energy, the core rate correcting from a below trend Nov.

Insight on manufacturing will come from Jan's Empire State today.

Eurozone November industrial production is expected to rise by 0.4% m/m but still be some 0.1% q/q lower compared to the three months ending in August. On the same day, November trade balance data will be released.

We anticipate no further fall in the UK CPI inflation rate in December, instead once again staying at 1.5% y/y, still a 3-year low, but further consolidating the drop from 2%-plus seen since the middle of last year.

EMERGING ASIA

FX Highlights:

A mixed day for Asian currencies on Tuesday following the announcement of the U.S. Treasury currency manipulator list, which were largely in favour to Asia. PHP reopened for trading on Tuesday, after markets closed due to Taal volcanic eruption on Monday. PHP was the biggest winner, up 0.30% against the dollar as pair caught up with the gains seen in Asia emerging markets. CNY was up 0.13%, as U.S. removed China's label as a currency manipulator. TWD was up 0.12% against the dollar. Meanwhile, both MYR and THB were down 0.25% and 0.19% respectively against the greenback.

USD/CNH traded mostly below 6.8900 overnight but upside pressures to 6.9000 returned in early Asian hours on Wednesday following a report that China tariffs will stay until the US Nov elections. Further downside toward six-month lows of 6.8600 levels remains likely, ahead of the trade deal and Lunar New Year. USD/CNY onshore spot also remained depressed below 6.9000 on Tuesday as trade deal optimism persisted and sentiment was boosted by China being de-labeled as a currency manipulator. Fresh 5-month lows of 6.8661 were printed. More downside bias expected after yuan's removal from the currency manipulator list, with eyes now on next support at 6.8320 for USD/CNY. 1Y NDFs saw sharp gains early this morning to 6.9802 at last look after trading below 6.9700 in NY.

USD/SGD reversed gains from the European session to trade below 1.3470 in NY but upside pressures returned in early Asian hours on Wednesday and pair touched 1.3480 highs at last check. Return of the tariff thread weighed on Asian currencies again as reports suggested US will keep tariffs on China until the November elections and phase 2 talks. Support level of 1.3444 still holds, with resistance at 1.3510. A downward momentum could bring the pair to the lows of 1.3300.

USD/IDR 1M NDFs saw gains to 13720+ levels in late NY hours from sub-13680 levels seen in Tuesday's Asian session. USD/IDR onshore spot gapped lower again on Tuesday to open at 13655 from previous close of 13673 and traded horizontally around 13650 in the morning. Trade optimism and US treasury relief underpinned. Meanwhile, BI's non-intervention and UAE's investment are further boosting rupiah sentiment. Pair however reversed slightly higher to 13680 into the close. Supports seen at 13645 and 13600, but we believe the doors to 13500 are now open if positive trade sentiment is sustained.

USD/INR 1M NDFs traded higher to 71.150+ levels in late Asian hours on Tuesday and traded mostly sideways thereafter. USD/INR onshore spot gapped lower again to open at 70.740 on Tuesday from previous close of 70.860 amid further improvement in sentiment after US Treasury removed China's labeling as a currency manipulator. However gains in the rupee could not catch up with Asian peers and pair traded back above 70.900 in the afternoon given the surge in headline inflation to over 5-year highs in December. Food price gains underpinned the surge in inflation, and this will likely delay any further easing by the RBI. We maintain our view that break below the 71 handle will likely remain temporary given a host of domestic challenges.

Data/Events Highlights:

China's December exports and imports both came in stronger-than-expected. Exports rose 7.6% y/y in December after four consecutive months of contraction, while imports climbed 16.3% y/y from 0.3% y/y in November partly due to base effects.

India's December WPI also came in stronger than expected at 2.59% y/y from 0.58% y/y previously.

Data/Events Ahead:

December trade data for both India and Indonesia is due in Asia today, and we expect narrower trade deficits for both.

DATA RELEASES DUE TODAY

PH: Overseas Remittances (Nov) 4cast: 3.5% y/y [Mkt: 4, Prev: 8]

PH: Overseas Remittances (Nov) 4cast: 2.407USD bn [Mkt: 2.436, Prev: 2.671]

IN: Exports (Dec) 4cast: -3% y/y [Prev: -0.3]

IN: Imports (Dec) 4cast: -9% y/y [Prev: -12.7]

IN: Trade Balance (Dec) 4cast: -10.224USD bn [Mkt: -11.6, Prev: -12.12]

23:50 GMT / 07:50 SGT - JP: M2 Money Supply (Dec) [Prev: 2.8]

04:00 GMT / 12:00 SGT - ID: Exports (Dec) 4cast: -3.3% y/y [Mkt: -2.2, Prev: -5.67]

04:00 GMT / 12:00 SGT - ID: Imports (Dec) 4cast: -7% y/y [Mkt: -5, Prev: -9.24]

04:00 GMT / 12:00 SGT - ID: Trade Balance (Dec) 4cast: -430USD mn [Mkt: -430, Prev: -1330]

09:30 GMT / 17:30 SGT - UK: CPI (Dec) [Mkt: 0.2, Prev: 0.2]

09:30 GMT / 17:30 SGT - UK: Output Prices Core (unadj.) (Dec) [Mkt: 0, Prev: -0.2]

09:30 GMT / 17:30 SGT - UK: Input Prices (nsa) (Dec) [Mkt: 0.2, Prev: -0.3]

09:30 GMT / 17:30 SGT - UK: CPI (Dec) 4cast: 1.5% y/y [Mkt: 1.5, Prev: 1.5]

09:30 GMT / 17:30 SGT - UK: Output Prices (unadj.) (Dec) [Mkt: 1, Prev: 0.5]

09:30 GMT / 17:30 SGT - UK: Input Prices (nsa) (Dec) [Mkt: -0.9, Prev: -2.7]

09:30 GMT / 17:30 SGT - UK: Retail Sales (inc Auto Fuel) (Dec) 4cast: 0.5% m/m [Mkt: 0.6, Prev: -0.6]

09:30 GMT / 17:30 SGT - UK: Retail Sales (ex Auto Fuel) (Dec) [Mkt: 0.8, Prev: -0.6]

09:30 GMT / 17:30 SGT - UK: Retail Sales (ex Auto Fuel) (Dec) [Mkt: 3, Prev: 0.8]

09:30 GMT / 17:30 SGT - UK: Retail Sales (inc Auto Fuel) (Dec) [Mkt: 2.7, Prev: 1]

10:00 GMT / 18:00 SGT - EU: Trade Balance (sa) (Nov) [Mkt: 22, Prev: 24.5]

10:00 GMT / 18:00 SGT - EU: Industrial production (Nov) [Mkt: -1, Prev: -2.2]

13:30 GMT / 21:30 SGT - US: PPI (ex Food & Energy) (Dec) 4cast: 0.3% m/m [Mkt: 0.2, Prev: -0.2]

13:30 GMT / 21:30 SGT - US: PPI (Dec) 4cast: 0.3% m/m [Mkt: 0.2, Prev: 0]

13:30 GMT / 21:30 SGT - US: Empire State Survey (Jan) [Mkt: 3.6, Prev: 3.5]

14:00 GMT / 22:00 SGT - CA: Existing Home Sales (Dec) [Prev: 0.6]

23:50 GMT / 07:50 SGT - JP: PPI (Dec) [Mkt: 0.1, Prev: 0.2]

23:50 GMT / 07:50 SGT - JP: PPI (Dec) [Mkt: 0.5, Prev: 0.1]

23:50 GMT / 07:50 SGT - JP: Core Machine orders (Nov) 4cast: -7.5% y/y [Mkt: -5.4, Prev: -6.1]

EVENTS & AUCTIONS

00:30 GMT / 08:30 SGT - JP: BoJ's Kuroda Speaks at Branch Managers' Meeting

08:40 GMT / 16:40 SGT - UK: BoE's Saunders Speaks in Bangor, Northern Ireland

16:00 GMT / 00:00 SGT - US: Fed's Harker speaks in New York

17:00 GMT / 01:00 SGT - US: Fed's Kaplan speaks in New York

19:00 GMT / 03:00 SGT - US: Fed Releases Beige Book


Forex - Asia Open - Overnight Highlights


 23:51 (GMT) 14 Jan

 [Forex Highlights]

Asia Overnight Highlights - 15 Jan 2020

MAJORS

FX Highlights

The Bloomberg dollar spot index edged a little firmer in a quiet European morning, gaining ground against the EUR, CAD and GBP but moving little against the JPY. The movement in North America was however in the opposite direction. A soft US CPI got little response but may have weighed on USD sentiment.

USD/JPY was never very far from 110 but fell to the day's lows on a report that US tariffs on China would persist through the election.

GBP/USD outperformed pushing above 1.30 while EUR/USD failed to fully erase earlier losses that bottomed a little above 1.11. Early in the session EUR/GBP broke the December high, but fell back after that, though the bund/gilt spread narrowed to its lowest level since May 2018.

Early weakness in equities coincided with USD gains against the riskier currencies, but did not persist. USD/CAD fully reversed early gains but AUD/CAD held above .90.

Data/Events Highlights:

- US Dec CPI +0.2% vs 0.3% exp, ex food and energy +0.1% vs 0.2% exp.

- VIX index: 12.39 (+0.57%)

- Gold Spot: $1,548.84/oz (+0.16%)

- ICE Brent front contract: $64.49 (+$0.29)

- Nymex WTI front contract: $58.20 ($-0.03)

- Reuters/Jefferies Commodities Index: 183.64 (+0.35%)

- 10y UST: 1.811% (-3bp) (Asia morning)

- DJI: 28,939.67 (+0.11%); S&P: 3,283.15 (-0.15%); Nasdaq: 9,251.33 (-0.24%)

Data/Events Ahead:

U.S. Dec PPI on Wednesday should see 0.3% gains both overall and ex food and energy, the core rate correcting from a below trend Nov.

Insight on manufacturing will come from Jan's Empire State today.

Eurozone November industrial production is expected to rise by 0.4% m/m but still be some 0.1% q/q lower compared to the three months ending in August. On the same day, November trade balance data will be released.

We anticipate no further fall in the UK CPI inflation rate in December, instead once again staying at 1.5% y/y, still a 3-year low, but further consolidating the drop from 2%-plus seen since the middle of last year.

EMERGING ASIA

FX Highlights:

A mixed day for Asian currencies on Tuesday following the announcement of the U.S. Treasury currency manipulator list, which were largely in favour to Asia. PHP reopened for trading on Tuesday, after markets closed due to Taal volcanic eruption on Monday. PHP was the biggest winner, up 0.30% against the dollar as pair caught up with the gains seen in Asia emerging markets. CNY was up 0.13%, as U.S. removed China's label as a currency manipulator. TWD was up 0.12% against the dollar. Meanwhile, both MYR and THB were down 0.25% and 0.19% respectively against the greenback.

USD/CNH traded mostly below 6.8900 overnight but upside pressures to 6.9000 returned in early Asian hours on Wednesday following a report that China tariffs will stay until the US Nov elections. Further downside toward six-month lows of 6.8600 levels remains likely, ahead of the trade deal and Lunar New Year. USD/CNY onshore spot also remained depressed below 6.9000 on Tuesday as trade deal optimism persisted and sentiment was boosted by China being de-labeled as a currency manipulator. Fresh 5-month lows of 6.8661 were printed. More downside bias expected after yuan's removal from the currency manipulator list, with eyes now on next support at 6.8320 for USD/CNY. 1Y NDFs saw sharp gains early this morning to 6.9802 at last look after trading below 6.9700 in NY.

USD/SGD reversed gains from the European session to trade below 1.3470 in NY but upside pressures returned in early Asian hours on Wednesday and pair touched 1.3480 highs at last check. Return of the tariff thread weighed on Asian currencies again as reports suggested US will keep tariffs on China until the November elections and phase 2 talks. Support level of 1.3444 still holds, with resistance at 1.3510. A downward momentum could bring the pair to the lows of 1.3300.

USD/IDR 1M NDFs saw gains to 13720+ levels in late NY hours from sub-13680 levels seen in Tuesday's Asian session. USD/IDR onshore spot gapped lower again on Tuesday to open at 13655 from previous close of 13673 and traded horizontally around 13650 in the morning. Trade optimism and US treasury relief underpinned. Meanwhile, BI's non-intervention and UAE's investment are further boosting rupiah sentiment. Pair however reversed slightly higher to 13680 into the close. Supports seen at 13645 and 13600, but we believe the doors to 13500 are now open if positive trade sentiment is sustained.

USD/INR 1M NDFs traded higher to 71.150+ levels in late Asian hours on Tuesday and traded mostly sideways thereafter. USD/INR onshore spot gapped lower again to open at 70.740 on Tuesday from previous close of 70.860 amid further improvement in sentiment after US Treasury removed China's labeling as a currency manipulator. However gains in the rupee could not catch up with Asian peers and pair traded back above 70.900 in the afternoon given the surge in headline inflation to over 5-year highs in December. Food price gains underpinned the surge in inflation, and this will likely delay any further easing by the RBI. We maintain our view that break below the 71 handle will likely remain temporary given a host of domestic challenges.

Data/Events Highlights:

China's December exports and imports both came in stronger-than-expected. Exports rose 7.6% y/y in December after four consecutive months of contraction, while imports climbed 16.3% y/y from 0.3% y/y in November partly due to base effects.

India's December WPI also came in stronger than expected at 2.59% y/y from 0.58% y/y previously.

Data/Events Ahead:

December trade data for both India and Indonesia is due in Asia today, and we expect narrower trade deficits for both.

DATA RELEASES DUE TODAY

PH: Overseas Remittances (Nov) 4cast: 3.5% y/y [Mkt: 4, Prev: 8]

PH: Overseas Remittances (Nov) 4cast: 2.407USD bn [Mkt: 2.436, Prev: 2.671]

IN: Exports (Dec) 4cast: -3% y/y [Prev: -0.3]

IN: Imports (Dec) 4cast: -9% y/y [Prev: -12.7]

IN: Trade Balance (Dec) 4cast: -10.224USD bn [Mkt: -11.6, Prev: -12.12]

23:50 GMT / 07:50 SGT - JP: M2 Money Supply (Dec) [Prev: 2.8]

04:00 GMT / 12:00 SGT - ID: Exports (Dec) 4cast: -3.3% y/y [Mkt: -2.2, Prev: -5.67]

04:00 GMT / 12:00 SGT - ID: Imports (Dec) 4cast: -7% y/y [Mkt: -5, Prev: -9.24]

04:00 GMT / 12:00 SGT - ID: Trade Balance (Dec) 4cast: -430USD mn [Mkt: -430, Prev: -1330]

09:30 GMT / 17:30 SGT - UK: CPI (Dec) [Mkt: 0.2, Prev: 0.2]

09:30 GMT / 17:30 SGT - UK: Output Prices Core (unadj.) (Dec) [Mkt: 0, Prev: -0.2]

09:30 GMT / 17:30 SGT - UK: Input Prices (nsa) (Dec) [Mkt: 0.2, Prev: -0.3]

09:30 GMT / 17:30 SGT - UK: CPI (Dec) 4cast: 1.5% y/y [Mkt: 1.5, Prev: 1.5]

09:30 GMT / 17:30 SGT - UK: Output Prices (unadj.) (Dec) [Mkt: 1, Prev: 0.5]

09:30 GMT / 17:30 SGT - UK: Input Prices (nsa) (Dec) [Mkt: -0.9, Prev: -2.7]

09:30 GMT / 17:30 SGT - UK: Retail Sales (inc Auto Fuel) (Dec) 4cast: 0.5% m/m [Mkt: 0.6, Prev: -0.6]

09:30 GMT / 17:30 SGT - UK: Retail Sales (ex Auto Fuel) (Dec) [Mkt: 0.8, Prev: -0.6]

09:30 GMT / 17:30 SGT - UK: Retail Sales (ex Auto Fuel) (Dec) [Mkt: 3, Prev: 0.8]

09:30 GMT / 17:30 SGT - UK: Retail Sales (inc Auto Fuel) (Dec) [Mkt: 2.7, Prev: 1]

10:00 GMT / 18:00 SGT - EU: Trade Balance (sa) (Nov) [Mkt: 22, Prev: 24.5]

10:00 GMT / 18:00 SGT - EU: Industrial production (Nov) [Mkt: -1, Prev: -2.2]

13:30 GMT / 21:30 SGT - US: PPI (ex Food & Energy) (Dec) 4cast: 0.3% m/m [Mkt: 0.2, Prev: -0.2]

13:30 GMT / 21:30 SGT - US: PPI (Dec) 4cast: 0.3% m/m [Mkt: 0.2, Prev: 0]

13:30 GMT / 21:30 SGT - US: Empire State Survey (Jan) [Mkt: 3.6, Prev: 3.5]

14:00 GMT / 22:00 SGT - CA: Existing Home Sales (Dec) [Prev: 0.6]

23:50 GMT / 07:50 SGT - JP: PPI (Dec) [Mkt: 0.1, Prev: 0.2]

23:50 GMT / 07:50 SGT - JP: PPI (Dec) [Mkt: 0.5, Prev: 0.1]

23:50 GMT / 07:50 SGT - JP: Core Machine orders (Nov) 4cast: -7.5% y/y [Mkt: -5.4, Prev: -6.1]

EVENTS & AUCTIONS

00:30 GMT / 08:30 SGT - JP: BoJ's Kuroda Speaks at Branch Managers' Meeting

08:40 GMT / 16:40 SGT - UK: BoE's Saunders Speaks in Bangor, Northern Ireland

16:00 GMT / 00:00 SGT - US: Fed's Harker speaks in New York

17:00 GMT / 01:00 SGT - US: Fed's Kaplan speaks in New York

19:00 GMT / 03:00 SGT - US: Fed Releases Beige Book


Forex - Asia Open - Overnight Highlights


 23:51 (GMT) 14 Jan

 [Forex Highlights]

Asia Overnight Highlights - 15 Jan 2020

MAJORS

FX Highlights

The Bloomberg dollar spot index edged a little firmer in a quiet European morning, gaining ground against the EUR, CAD and GBP but moving little against the JPY. The movement in North America was however in the opposite direction. A soft US CPI got little response but may have weighed on USD sentiment.

USD/JPY was never very far from 110 but fell to the day's lows on a report that US tariffs on China would persist through the election.

GBP/USD outperformed pushing above 1.30 while EUR/USD failed to fully erase earlier losses that bottomed a little above 1.11. Early in the session EUR/GBP broke the December high, but fell back after that, though the bund/gilt spread narrowed to its lowest level since May 2018.

Early weakness in equities coincided with USD gains against the riskier currencies, but did not persist. USD/CAD fully reversed early gains but AUD/CAD held above .90.

Data/Events Highlights:

- US Dec CPI +0.2% vs 0.3% exp, ex food and energy +0.1% vs 0.2% exp.

- VIX index: 12.39 (+0.57%)

- Gold Spot: $1,548.84/oz (+0.16%)

- ICE Brent front contract: $64.49 (+$0.29)

- Nymex WTI front contract: $58.20 ($-0.03)

- Reuters/Jefferies Commodities Index: 183.64 (+0.35%)

- 10y UST: 1.811% (-3bp) (Asia morning)

- DJI: 28,939.67 (+0.11%); S&P: 3,283.15 (-0.15%); Nasdaq: 9,251.33 (-0.24%)

Data/Events Ahead:

U.S. Dec PPI on Wednesday should see 0.3% gains both overall and ex food and energy, the core rate correcting from a below trend Nov.

Insight on manufacturing will come from Jan's Empire State today.

Eurozone November industrial production is expected to rise by 0.4% m/m but still be some 0.1% q/q lower compared to the three months ending in August. On the same day, November trade balance data will be released.

We anticipate no further fall in the UK CPI inflation rate in December, instead once again staying at 1.5% y/y, still a 3-year low, but further consolidating the drop from 2%-plus seen since the middle of last year.

EMERGING ASIA

FX Highlights:

A mixed day for Asian currencies on Tuesday following the announcement of the U.S. Treasury currency manipulator list, which were largely in favour to Asia. PHP reopened for trading on Tuesday, after markets closed due to Taal volcanic eruption on Monday. PHP was the biggest winner, up 0.30% against the dollar as pair caught up with the gains seen in Asia emerging markets. CNY was up 0.13%, as U.S. removed China's label as a currency manipulator. TWD was up 0.12% against the dollar. Meanwhile, both MYR and THB were down 0.25% and 0.19% respectively against the greenback.

USD/CNH traded mostly below 6.8900 overnight but upside pressures to 6.9000 returned in early Asian hours on Wednesday following a report that China tariffs will stay until the US Nov elections. Further downside toward six-month lows of 6.8600 levels remains likely, ahead of the trade deal and Lunar New Year. USD/CNY onshore spot also remained depressed below 6.9000 on Tuesday as trade deal optimism persisted and sentiment was boosted by China being de-labeled as a currency manipulator. Fresh 5-month lows of 6.8661 were printed. More downside bias expected after yuan's removal from the currency manipulator list, with eyes now on next support at 6.8320 for USD/CNY. 1Y NDFs saw sharp gains early this morning to 6.9802 at last look after trading below 6.9700 in NY.

USD/SGD reversed gains from the European session to trade below 1.3470 in NY but upside pressures returned in early Asian hours on Wednesday and pair touched 1.3480 highs at last check. Return of the tariff thread weighed on Asian currencies again as reports suggested US will keep tariffs on China until the November elections and phase 2 talks. Support level of 1.3444 still holds, with resistance at 1.3510. A downward momentum could bring the pair to the lows of 1.3300.

USD/IDR 1M NDFs saw gains to 13720+ levels in late NY hours from sub-13680 levels seen in Tuesday's Asian session. USD/IDR onshore spot gapped lower again on Tuesday to open at 13655 from previous close of 13673 and traded horizontally around 13650 in the morning. Trade optimism and US treasury relief underpinned. Meanwhile, BI's non-intervention and UAE's investment are further boosting rupiah sentiment. Pair however reversed slightly higher to 13680 into the close. Supports seen at 13645 and 13600, but we believe the doors to 13500 are now open if positive trade sentiment is sustained.

USD/INR 1M NDFs traded higher to 71.150+ levels in late Asian hours on Tuesday and traded mostly sideways thereafter. USD/INR onshore spot gapped lower again to open at 70.740 on Tuesday from previous close of 70.860 amid further improvement in sentiment after US Treasury removed China's labeling as a currency manipulator. However gains in the rupee could not catch up with Asian peers and pair traded back above 70.900 in the afternoon given the surge in headline inflation to over 5-year highs in December. Food price gains underpinned the surge in inflation, and this will likely delay any further easing by the RBI. We maintain our view that break below the 71 handle will likely remain temporary given a host of domestic challenges.

Data/Events Highlights:

China's December exports and imports both came in stronger-than-expected. Exports rose 7.6% y/y in December after four consecutive months of contraction, while imports climbed 16.3% y/y from 0.3% y/y in November partly due to base effects.

India's December WPI also came in stronger than expected at 2.59% y/y from 0.58% y/y previously.

Data/Events Ahead:

December trade data for both India and Indonesia is due in Asia today, and we expect narrower trade deficits for both.

DATA RELEASES DUE TODAY

PH: Overseas Remittances (Nov) 4cast: 3.5% y/y [Mkt: 4, Prev: 8]

PH: Overseas Remittances (Nov) 4cast: 2.407USD bn [Mkt: 2.436, Prev: 2.671]

IN: Exports (Dec) 4cast: -3% y/y [Prev: -0.3]

IN: Imports (Dec) 4cast: -9% y/y [Prev: -12.7]

IN: Trade Balance (Dec) 4cast: -10.224USD bn [Mkt: -11.6, Prev: -12.12]

23:50 GMT / 07:50 SGT - JP: M2 Money Supply (Dec) [Prev: 2.8]

04:00 GMT / 12:00 SGT - ID: Exports (Dec) 4cast: -3.3% y/y [Mkt: -2.2, Prev: -5.67]

04:00 GMT / 12:00 SGT - ID: Imports (Dec) 4cast: -7% y/y [Mkt: -5, Prev: -9.24]

04:00 GMT / 12:00 SGT - ID: Trade Balance (Dec) 4cast: -430USD mn [Mkt: -430, Prev: -1330]

09:30 GMT / 17:30 SGT - UK: CPI (Dec) [Mkt: 0.2, Prev: 0.2]

09:30 GMT / 17:30 SGT - UK: Output Prices Core (unadj.) (Dec) [Mkt: 0, Prev: -0.2]

09:30 GMT / 17:30 SGT - UK: Input Prices (nsa) (Dec) [Mkt: 0.2, Prev: -0.3]

09:30 GMT / 17:30 SGT - UK: CPI (Dec) 4cast: 1.5% y/y [Mkt: 1.5, Prev: 1.5]

09:30 GMT / 17:30 SGT - UK: Output Prices (unadj.) (Dec) [Mkt: 1, Prev: 0.5]

09:30 GMT / 17:30 SGT - UK: Input Prices (nsa) (Dec) [Mkt: -0.9, Prev: -2.7]

09:30 GMT / 17:30 SGT - UK: Retail Sales (inc Auto Fuel) (Dec) 4cast: 0.5% m/m [Mkt: 0.6, Prev: -0.6]

09:30 GMT / 17:30 SGT - UK: Retail Sales (ex Auto Fuel) (Dec) [Mkt: 0.8, Prev: -0.6]

09:30 GMT / 17:30 SGT - UK: Retail Sales (ex Auto Fuel) (Dec) [Mkt: 3, Prev: 0.8]

09:30 GMT / 17:30 SGT - UK: Retail Sales (inc Auto Fuel) (Dec) [Mkt: 2.7, Prev: 1]

10:00 GMT / 18:00 SGT - EU: Trade Balance (sa) (Nov) [Mkt: 22, Prev: 24.5]

10:00 GMT / 18:00 SGT - EU: Industrial production (Nov) [Mkt: -1, Prev: -2.2]

13:30 GMT / 21:30 SGT - US: PPI (ex Food & Energy) (Dec) 4cast: 0.3% m/m [Mkt: 0.2, Prev: -0.2]

13:30 GMT / 21:30 SGT - US: PPI (Dec) 4cast: 0.3% m/m [Mkt: 0.2, Prev: 0]

13:30 GMT / 21:30 SGT - US: Empire State Survey (Jan) [Mkt: 3.6, Prev: 3.5]

14:00 GMT / 22:00 SGT - CA: Existing Home Sales (Dec) [Prev: 0.6]

23:50 GMT / 07:50 SGT - JP: PPI (Dec) [Mkt: 0.1, Prev: 0.2]

23:50 GMT / 07:50 SGT - JP: PPI (Dec) [Mkt: 0.5, Prev: 0.1]

23:50 GMT / 07:50 SGT - JP: Core Machine orders (Nov) 4cast: -7.5% y/y [Mkt: -5.4, Prev: -6.1]

EVENTS & AUCTIONS

00:30 GMT / 08:30 SGT - JP: BoJ's Kuroda Speaks at Branch Managers' Meeting

08:40 GMT / 16:40 SGT - UK: BoE's Saunders Speaks in Bangor, Northern Ireland

16:00 GMT / 00:00 SGT - US: Fed's Harker speaks in New York

17:00 GMT / 01:00 SGT - US: Fed's Kaplan speaks in New York

19:00 GMT / 03:00 SGT - US: Fed Releases Beige Book


Forex - Asia Open - Overnight Highlights


 23:51 (GMT) 14 Jan

 [Forex Highlights]

Asia Overnight Highlights - 15 Jan 2020

MAJORS

FX Highlights

The Bloomberg dollar spot index edged a little firmer in a quiet European morning, gaining ground against the EUR, CAD and GBP but moving little against the JPY. The movement in North America was however in the opposite direction. A soft US CPI got little response but may have weighed on USD sentiment.

USD/JPY was never very far from 110 but fell to the day's lows on a report that US tariffs on China would persist through the election.

GBP/USD outperformed pushing above 1.30 while EUR/USD failed to fully erase earlier losses that bottomed a little above 1.11. Early in the session EUR/GBP broke the December high, but fell back after that, though the bund/gilt spread narrowed to its lowest level since May 2018.

Early weakness in equities coincided with USD gains against the riskier currencies, but did not persist. USD/CAD fully reversed early gains but AUD/CAD held above .90.

Data/Events Highlights:

- US Dec CPI +0.2% vs 0.3% exp, ex food and energy +0.1% vs 0.2% exp.

- VIX index: 12.39 (+0.57%)

- Gold Spot: $1,548.84/oz (+0.16%)

- ICE Brent front contract: $64.49 (+$0.29)

- Nymex WTI front contract: $58.20 ($-0.03)

- Reuters/Jefferies Commodities Index: 183.64 (+0.35%)

- 10y UST: 1.811% (-3bp) (Asia morning)

- DJI: 28,939.67 (+0.11%); S&P: 3,283.15 (-0.15%); Nasdaq: 9,251.33 (-0.24%)

Data/Events Ahead:

U.S. Dec PPI on Wednesday should see 0.3% gains both overall and ex food and energy, the core rate correcting from a below trend Nov.

Insight on manufacturing will come from Jan's Empire State today.

Eurozone November industrial production is expected to rise by 0.4% m/m but still be some 0.1% q/q lower compared to the three months ending in August. On the same day, November trade balance data will be released.

We anticipate no further fall in the UK CPI inflation rate in December, instead once again staying at 1.5% y/y, still a 3-year low, but further consolidating the drop from 2%-plus seen since the middle of last year.

EMERGING ASIA

FX Highlights:

A mixed day for Asian currencies on Tuesday following the announcement of the U.S. Treasury currency manipulator list, which were largely in favour to Asia. PHP reopened for trading on Tuesday, after markets closed due to Taal volcanic eruption on Monday. PHP was the biggest winner, up 0.30% against the dollar as pair caught up with the gains seen in Asia emerging markets. CNY was up 0.13%, as U.S. removed China's label as a currency manipulator. TWD was up 0.12% against the dollar. Meanwhile, both MYR and THB were down 0.25% and 0.19% respectively against the greenback.

USD/CNH traded mostly below 6.8900 overnight but upside pressures to 6.9000 returned in early Asian hours on Wednesday following a report that China tariffs will stay until the US Nov elections. Further downside toward six-month lows of 6.8600 levels remains likely, ahead of the trade deal and Lunar New Year. USD/CNY onshore spot also remained depressed below 6.9000 on Tuesday as trade deal optimism persisted and sentiment was boosted by China being de-labeled as a currency manipulator. Fresh 5-month lows of 6.8661 were printed. More downside bias expected after yuan's removal from the currency manipulator list, with eyes now on next support at 6.8320 for USD/CNY. 1Y NDFs saw sharp gains early this morning to 6.9802 at last look after trading below 6.9700 in NY.

USD/SGD reversed gains from the European session to trade below 1.3470 in NY but upside pressures returned in early Asian hours on Wednesday and pair touched 1.3480 highs at last check. Return of the tariff thread weighed on Asian currencies again as reports suggested US will keep tariffs on China until the November elections and phase 2 talks. Support level of 1.3444 still holds, with resistance at 1.3510. A downward momentum could bring the pair to the lows of 1.3300.

USD/IDR 1M NDFs saw gains to 13720+ levels in late NY hours from sub-13680 levels seen in Tuesday's Asian session. USD/IDR onshore spot gapped lower again on Tuesday to open at 13655 from previous close of 13673 and traded horizontally around 13650 in the morning. Trade optimism and US treasury relief underpinned. Meanwhile, BI's non-intervention and UAE's investment are further boosting rupiah sentiment. Pair however reversed slightly higher to 13680 into the close. Supports seen at 13645 and 13600, but we believe the doors to 13500 are now open if positive trade sentiment is sustained.

USD/INR 1M NDFs traded higher to 71.150+ levels in late Asian hours on Tuesday and traded mostly sideways thereafter. USD/INR onshore spot gapped lower again to open at 70.740 on Tuesday from previous close of 70.860 amid further improvement in sentiment after US Treasury removed China's labeling as a currency manipulator. However gains in the rupee could not catch up with Asian peers and pair traded back above 70.900 in the afternoon given the surge in headline inflation to over 5-year highs in December. Food price gains underpinned the surge in inflation, and this will likely delay any further easing by the RBI. We maintain our view that break below the 71 handle will likely remain temporary given a host of domestic challenges.

Data/Events Highlights:

China's December exports and imports both came in stronger-than-expected. Exports rose 7.6% y/y in December after four consecutive months of contraction, while imports climbed 16.3% y/y from 0.3% y/y in November partly due to base effects.

India's December WPI also came in stronger than expected at 2.59% y/y from 0.58% y/y previously.

Data/Events Ahead:

December trade data for both India and Indonesia is due in Asia today, and we expect narrower trade deficits for both.

DATA RELEASES DUE TODAY

PH: Overseas Remittances (Nov) 4cast: 3.5% y/y [Mkt: 4, Prev: 8]

PH: Overseas Remittances (Nov) 4cast: 2.407USD bn [Mkt: 2.436, Prev: 2.671]

IN: Exports (Dec) 4cast: -3% y/y [Prev: -0.3]

IN: Imports (Dec) 4cast: -9% y/y [Prev: -12.7]

IN: Trade Balance (Dec) 4cast: -10.224USD bn [Mkt: -11.6, Prev: -12.12]

23:50 GMT / 07:50 SGT - JP: M2 Money Supply (Dec) [Prev: 2.8]

04:00 GMT / 12:00 SGT - ID: Exports (Dec) 4cast: -3.3% y/y [Mkt: -2.2, Prev: -5.67]

04:00 GMT / 12:00 SGT - ID: Imports (Dec) 4cast: -7% y/y [Mkt: -5, Prev: -9.24]

04:00 GMT / 12:00 SGT - ID: Trade Balance (Dec) 4cast: -430USD mn [Mkt: -430, Prev: -1330]

09:30 GMT / 17:30 SGT - UK: CPI (Dec) [Mkt: 0.2, Prev: 0.2]

09:30 GMT / 17:30 SGT - UK: Output Prices Core (unadj.) (Dec) [Mkt: 0, Prev: -0.2]

09:30 GMT / 17:30 SGT - UK: Input Prices (nsa) (Dec) [Mkt: 0.2, Prev: -0.3]

09:30 GMT / 17:30 SGT - UK: CPI (Dec) 4cast: 1.5% y/y [Mkt: 1.5, Prev: 1.5]

09:30 GMT / 17:30 SGT - UK: Output Prices (unadj.) (Dec) [Mkt: 1, Prev: 0.5]

09:30 GMT / 17:30 SGT - UK: Input Prices (nsa) (Dec) [Mkt: -0.9, Prev: -2.7]

09:30 GMT / 17:30 SGT - UK: Retail Sales (inc Auto Fuel) (Dec) 4cast: 0.5% m/m [Mkt: 0.6, Prev: -0.6]

09:30 GMT / 17:30 SGT - UK: Retail Sales (ex Auto Fuel) (Dec) [Mkt: 0.8, Prev: -0.6]

09:30 GMT / 17:30 SGT - UK: Retail Sales (ex Auto Fuel) (Dec) [Mkt: 3, Prev: 0.8]

09:30 GMT / 17:30 SGT - UK: Retail Sales (inc Auto Fuel) (Dec) [Mkt: 2.7, Prev: 1]

10:00 GMT / 18:00 SGT - EU: Trade Balance (sa) (Nov) [Mkt: 22, Prev: 24.5]

10:00 GMT / 18:00 SGT - EU: Industrial production (Nov) [Mkt: -1, Prev: -2.2]

13:30 GMT / 21:30 SGT - US: PPI (ex Food & Energy) (Dec) 4cast: 0.3% m/m [Mkt: 0.2, Prev: -0.2]

13:30 GMT / 21:30 SGT - US: PPI (Dec) 4cast: 0.3% m/m [Mkt: 0.2, Prev: 0]

13:30 GMT / 21:30 SGT - US: Empire State Survey (Jan) [Mkt: 3.6, Prev: 3.5]

14:00 GMT / 22:00 SGT - CA: Existing Home Sales (Dec) [Prev: 0.6]

23:50 GMT / 07:50 SGT - JP: PPI (Dec) [Mkt: 0.1, Prev: 0.2]

23:50 GMT / 07:50 SGT - JP: PPI (Dec) [Mkt: 0.5, Prev: 0.1]

23:50 GMT / 07:50 SGT - JP: Core Machine orders (Nov) 4cast: -7.5% y/y [Mkt: -5.4, Prev: -6.1]

EVENTS & AUCTIONS

00:30 GMT / 08:30 SGT - JP: BoJ's Kuroda Speaks at Branch Managers' Meeting

08:40 GMT / 16:40 SGT - UK: BoE's Saunders Speaks in Bangor, Northern Ireland

16:00 GMT / 00:00 SGT - US: Fed's Harker speaks in New York

17:00 GMT / 01:00 SGT - US: Fed's Kaplan speaks in New York

19:00 GMT / 03:00 SGT - US: Fed Releases Beige Book


Forex - Asia Open - Overnight Highlights


 23:51 (GMT) 14 Jan

 [Forex Highlights]

Asia Overnight Highlights - 15 Jan 2020

MAJORS

FX Highlights

The Bloomberg dollar spot index edged a little firmer in a quiet European morning, gaining ground against the EUR, CAD and GBP but moving little against the JPY. The movement in North America was however in the opposite direction. A soft US CPI got little response but may have weighed on USD sentiment.

USD/JPY was never very far from 110 but fell to the day's lows on a report that US tariffs on China would persist through the election.

GBP/USD outperformed pushing above 1.30 while EUR/USD failed to fully erase earlier losses that bottomed a little above 1.11. Early in the session EUR/GBP broke the December high, but fell back after that, though the bund/gilt spread narrowed to its lowest level since May 2018.

Early weakness in equities coincided with USD gains against the riskier currencies, but did not persist. USD/CAD fully reversed early gains but AUD/CAD held above .90.

Data/Events Highlights:

- US Dec CPI +0.2% vs 0.3% exp, ex food and energy +0.1% vs 0.2% exp.

- VIX index: 12.39 (+0.57%)

- Gold Spot: $1,548.84/oz (+0.16%)

- ICE Brent front contract: $64.49 (+$0.29)

- Nymex WTI front contract: $58.20 ($-0.03)

- Reuters/Jefferies Commodities Index: 183.64 (+0.35%)

- 10y UST: 1.811% (-3bp) (Asia morning)

- DJI: 28,939.67 (+0.11%); S&P: 3,283.15 (-0.15%); Nasdaq: 9,251.33 (-0.24%)

Data/Events Ahead:

U.S. Dec PPI on Wednesday should see 0.3% gains both overall and ex food and energy, the core rate correcting from a below trend Nov.

Insight on manufacturing will come from Jan's Empire State today.

Eurozone November industrial production is expected to rise by 0.4% m/m but still be some 0.1% q/q lower compared to the three months ending in August. On the same day, November trade balance data will be released.

We anticipate no further fall in the UK CPI inflation rate in December, instead once again staying at 1.5% y/y, still a 3-year low, but further consolidating the drop from 2%-plus seen since the middle of last year.

EMERGING ASIA

FX Highlights:

A mixed day for Asian currencies on Tuesday following the announcement of the U.S. Treasury currency manipulator list, which were largely in favour to Asia. PHP reopened for trading on Tuesday, after markets closed due to Taal volcanic eruption on Monday. PHP was the biggest winner, up 0.30% against the dollar as pair caught up with the gains seen in Asia emerging markets. CNY was up 0.13%, as U.S. removed China's label as a currency manipulator. TWD was up 0.12% against the dollar. Meanwhile, both MYR and THB were down 0.25% and 0.19% respectively against the greenback.

USD/CNH traded mostly below 6.8900 overnight but upside pressures to 6.9000 returned in early Asian hours on Wednesday following a report that China tariffs will stay until the US Nov elections. Further downside toward six-month lows of 6.8600 levels remains likely, ahead of the trade deal and Lunar New Year. USD/CNY onshore spot also remained depressed below 6.9000 on Tuesday as trade deal optimism persisted and sentiment was boosted by China being de-labeled as a currency manipulator. Fresh 5-month lows of 6.8661 were printed. More downside bias expected after yuan's removal from the currency manipulator list, with eyes now on next support at 6.8320 for USD/CNY. 1Y NDFs saw sharp gains early this morning to 6.9802 at last look after trading below 6.9700 in NY.

USD/SGD reversed gains from the European session to trade below 1.3470 in NY but upside pressures returned in early Asian hours on Wednesday and pair touched 1.3480 highs at last check. Return of the tariff thread weighed on Asian currencies again as reports suggested US will keep tariffs on China until the November elections and phase 2 talks. Support level of 1.3444 still holds, with resistance at 1.3510. A downward momentum could bring the pair to the lows of 1.3300.

USD/IDR 1M NDFs saw gains to 13720+ levels in late NY hours from sub-13680 levels seen in Tuesday's Asian session. USD/IDR onshore spot gapped lower again on Tuesday to open at 13655 from previous close of 13673 and traded horizontally around 13650 in the morning. Trade optimism and US treasury relief underpinned. Meanwhile, BI's non-intervention and UAE's investment are further boosting rupiah sentiment. Pair however reversed slightly higher to 13680 into the close. Supports seen at 13645 and 13600, but we believe the doors to 13500 are now open if positive trade sentiment is sustained.

USD/INR 1M NDFs traded higher to 71.150+ levels in late Asian hours on Tuesday and traded mostly sideways thereafter. USD/INR onshore spot gapped lower again to open at 70.740 on Tuesday from previous close of 70.860 amid further improvement in sentiment after US Treasury removed China's labeling as a currency manipulator. However gains in the rupee could not catch up with Asian peers and pair traded back above 70.900 in the afternoon given the surge in headline inflation to over 5-year highs in December. Food price gains underpinned the surge in inflation, and this will likely delay any further easing by the RBI. We maintain our view that break below the 71 handle will likely remain temporary given a host of domestic challenges.

Data/Events Highlights:

China's December exports and imports both came in stronger-than-expected. Exports rose 7.6% y/y in December after four consecutive months of contraction, while imports climbed 16.3% y/y from 0.3% y/y in November partly due to base effects.

India's December WPI also came in stronger than expected at 2.59% y/y from 0.58% y/y previously.

Data/Events Ahead:

December trade data for both India and Indonesia is due in Asia today, and we expect narrower trade deficits for both.

DATA RELEASES DUE TODAY

PH: Overseas Remittances (Nov) 4cast: 3.5% y/y [Mkt: 4, Prev: 8]

PH: Overseas Remittances (Nov) 4cast: 2.407USD bn [Mkt: 2.436, Prev: 2.671]

IN: Exports (Dec) 4cast: -3% y/y [Prev: -0.3]

IN: Imports (Dec) 4cast: -9% y/y [Prev: -12.7]

IN: Trade Balance (Dec) 4cast: -10.224USD bn [Mkt: -11.6, Prev: -12.12]

23:50 GMT / 07:50 SGT - JP: M2 Money Supply (Dec) [Prev: 2.8]

04:00 GMT / 12:00 SGT - ID: Exports (Dec) 4cast: -3.3% y/y [Mkt: -2.2, Prev: -5.67]

04:00 GMT / 12:00 SGT - ID: Imports (Dec) 4cast: -7% y/y [Mkt: -5, Prev: -9.24]

04:00 GMT / 12:00 SGT - ID: Trade Balance (Dec) 4cast: -430USD mn [Mkt: -430, Prev: -1330]

09:30 GMT / 17:30 SGT - UK: CPI (Dec) [Mkt: 0.2, Prev: 0.2]

09:30 GMT / 17:30 SGT - UK: Output Prices Core (unadj.) (Dec) [Mkt: 0, Prev: -0.2]

09:30 GMT / 17:30 SGT - UK: Input Prices (nsa) (Dec) [Mkt: 0.2, Prev: -0.3]

09:30 GMT / 17:30 SGT - UK: CPI (Dec) 4cast: 1.5% y/y [Mkt: 1.5, Prev: 1.5]

09:30 GMT / 17:30 SGT - UK: Output Prices (unadj.) (Dec) [Mkt: 1, Prev: 0.5]

09:30 GMT / 17:30 SGT - UK: Input Prices (nsa) (Dec) [Mkt: -0.9, Prev: -2.7]

09:30 GMT / 17:30 SGT - UK: Retail Sales (inc Auto Fuel) (Dec) 4cast: 0.5% m/m [Mkt: 0.6, Prev: -0.6]

09:30 GMT / 17:30 SGT - UK: Retail Sales (ex Auto Fuel) (Dec) [Mkt: 0.8, Prev: -0.6]

09:30 GMT / 17:30 SGT - UK: Retail Sales (ex Auto Fuel) (Dec) [Mkt: 3, Prev: 0.8]

09:30 GMT / 17:30 SGT - UK: Retail Sales (inc Auto Fuel) (Dec) [Mkt: 2.7, Prev: 1]

10:00 GMT / 18:00 SGT - EU: Trade Balance (sa) (Nov) [Mkt: 22, Prev: 24.5]

10:00 GMT / 18:00 SGT - EU: Industrial production (Nov) [Mkt: -1, Prev: -2.2]

13:30 GMT / 21:30 SGT - US: PPI (ex Food & Energy) (Dec) 4cast: 0.3% m/m [Mkt: 0.2, Prev: -0.2]

13:30 GMT / 21:30 SGT - US: PPI (Dec) 4cast: 0.3% m/m [Mkt: 0.2, Prev: 0]

13:30 GMT / 21:30 SGT - US: Empire State Survey (Jan) [Mkt: 3.6, Prev: 3.5]

14:00 GMT / 22:00 SGT - CA: Existing Home Sales (Dec) [Prev: 0.6]

23:50 GMT / 07:50 SGT - JP: PPI (Dec) [Mkt: 0.1, Prev: 0.2]

23:50 GMT / 07:50 SGT - JP: PPI (Dec) [Mkt: 0.5, Prev: 0.1]

23:50 GMT / 07:50 SGT - JP: Core Machine orders (Nov) 4cast: -7.5% y/y [Mkt: -5.4, Prev: -6.1]

EVENTS & AUCTIONS

00:30 GMT / 08:30 SGT - JP: BoJ's Kuroda Speaks at Branch Managers' Meeting

08:40 GMT / 16:40 SGT - UK: BoE's Saunders Speaks in Bangor, Northern Ireland

16:00 GMT / 00:00 SGT - US: Fed's Harker speaks in New York

17:00 GMT / 01:00 SGT - US: Fed's Kaplan speaks in New York

19:00 GMT / 03:00 SGT - US: Fed Releases Beige Book


Forex - Asia Open - Overnight Highlights


 23:51 (GMT) 14 Jan

 [Forex Highlights]

Asia Overnight Highlights - 15 Jan 2020

MAJORS

FX Highlights

The Bloomberg dollar spot index edged a little firmer in a quiet European morning, gaining ground against the EUR, CAD and GBP but moving little against the JPY. The movement in North America was however in the opposite direction. A soft US CPI got little response but may have weighed on USD sentiment.

USD/JPY was never very far from 110 but fell to the day's lows on a report that US tariffs on China would persist through the election.

GBP/USD outperformed pushing above 1.30 while EUR/USD failed to fully erase earlier losses that bottomed a little above 1.11. Early in the session EUR/GBP broke the December high, but fell back after that, though the bund/gilt spread narrowed to its lowest level since May 2018.

Early weakness in equities coincided with USD gains against the riskier currencies, but did not persist. USD/CAD fully reversed early gains but AUD/CAD held above .90.

Data/Events Highlights:

- US Dec CPI +0.2% vs 0.3% exp, ex food and energy +0.1% vs 0.2% exp.

- VIX index: 12.39 (+0.57%)

- Gold Spot: $1,548.84/oz (+0.16%)

- ICE Brent front contract: $64.49 (+$0.29)

- Nymex WTI front contract: $58.20 ($-0.03)

- Reuters/Jefferies Commodities Index: 183.64 (+0.35%)

- 10y UST: 1.811% (-3bp) (Asia morning)

- DJI: 28,939.67 (+0.11%); S&P: 3,283.15 (-0.15%); Nasdaq: 9,251.33 (-0.24%)

Data/Events Ahead:

U.S. Dec PPI on Wednesday should see 0.3% gains both overall and ex food and energy, the core rate correcting from a below trend Nov.

Insight on manufacturing will come from Jan's Empire State today.

Eurozone November industrial production is expected to rise by 0.4% m/m but still be some 0.1% q/q lower compared to the three months ending in August. On the same day, November trade balance data will be released.

We anticipate no further fall in the UK CPI inflation rate in December, instead once again staying at 1.5% y/y, still a 3-year low, but further consolidating the drop from 2%-plus seen since the middle of last year.

EMERGING ASIA

FX Highlights:

A mixed day for Asian currencies on Tuesday following the announcement of the U.S. Treasury currency manipulator list, which were largely in favour to Asia. PHP reopened for trading on Tuesday, after markets closed due to Taal volcanic eruption on Monday. PHP was the biggest winner, up 0.30% against the dollar as pair caught up with the gains seen in Asia emerging markets. CNY was up 0.13%, as U.S. removed China's label as a currency manipulator. TWD was up 0.12% against the dollar. Meanwhile, both MYR and THB were down 0.25% and 0.19% respectively against the greenback.

USD/CNH traded mostly below 6.8900 overnight but upside pressures to 6.9000 returned in early Asian hours on Wednesday following a report that China tariffs will stay until the US Nov elections. Further downside toward six-month lows of 6.8600 levels remains likely, ahead of the trade deal and Lunar New Year. USD/CNY onshore spot also remained depressed below 6.9000 on Tuesday as trade deal optimism persisted and sentiment was boosted by China being de-labeled as a currency manipulator. Fresh 5-month lows of 6.8661 were printed. More downside bias expected after yuan's removal from the currency manipulator list, with eyes now on next support at 6.8320 for USD/CNY. 1Y NDFs saw sharp gains early this morning to 6.9802 at last look after trading below 6.9700 in NY.

USD/SGD reversed gains from the European session to trade below 1.3470 in NY but upside pressures returned in early Asian hours on Wednesday and pair touched 1.3480 highs at last check. Return of the tariff thread weighed on Asian currencies again as reports suggested US will keep tariffs on China until the November elections and phase 2 talks. Support level of 1.3444 still holds, with resistance at 1.3510. A downward momentum could bring the pair to the lows of 1.3300.

USD/IDR 1M NDFs saw gains to 13720+ levels in late NY hours from sub-13680 levels seen in Tuesday's Asian session. USD/IDR onshore spot gapped lower again on Tuesday to open at 13655 from previous close of 13673 and traded horizontally around 13650 in the morning. Trade optimism and US treasury relief underpinned. Meanwhile, BI's non-intervention and UAE's investment are further boosting rupiah sentiment. Pair however reversed slightly higher to 13680 into the close. Supports seen at 13645 and 13600, but we believe the doors to 13500 are now open if positive trade sentiment is sustained.

USD/INR 1M NDFs traded higher to 71.150+ levels in late Asian hours on Tuesday and traded mostly sideways thereafter. USD/INR onshore spot gapped lower again to open at 70.740 on Tuesday from previous close of 70.860 amid further improvement in sentiment after US Treasury removed China's labeling as a currency manipulator. However gains in the rupee could not catch up with Asian peers and pair traded back above 70.900 in the afternoon given the surge in headline inflation to over 5-year highs in December. Food price gains underpinned the surge in inflation, and this will likely delay any further easing by the RBI. We maintain our view that break below the 71 handle will likely remain temporary given a host of domestic challenges.

Data/Events Highlights:

China's December exports and imports both came in stronger-than-expected. Exports rose 7.6% y/y in December after four consecutive months of contraction, while imports climbed 16.3% y/y from 0.3% y/y in November partly due to base effects.

India's December WPI also came in stronger than expected at 2.59% y/y from 0.58% y/y previously.

Data/Events Ahead:

December trade data for both India and Indonesia is due in Asia today, and we expect narrower trade deficits for both.

DATA RELEASES DUE TODAY

PH: Overseas Remittances (Nov) 4cast: 3.5% y/y [Mkt: 4, Prev: 8]

PH: Overseas Remittances (Nov) 4cast: 2.407USD bn [Mkt: 2.436, Prev: 2.671]

IN: Exports (Dec) 4cast: -3% y/y [Prev: -0.3]

IN: Imports (Dec) 4cast: -9% y/y [Prev: -12.7]

IN: Trade Balance (Dec) 4cast: -10.224USD bn [Mkt: -11.6, Prev: -12.12]

23:50 GMT / 07:50 SGT - JP: M2 Money Supply (Dec) [Prev: 2.8]

04:00 GMT / 12:00 SGT - ID: Exports (Dec) 4cast: -3.3% y/y [Mkt: -2.2, Prev: -5.67]

04:00 GMT / 12:00 SGT - ID: Imports (Dec) 4cast: -7% y/y [Mkt: -5, Prev: -9.24]

04:00 GMT / 12:00 SGT - ID: Trade Balance (Dec) 4cast: -430USD mn [Mkt: -430, Prev: -1330]

09:30 GMT / 17:30 SGT - UK: CPI (Dec) [Mkt: 0.2, Prev: 0.2]

09:30 GMT / 17:30 SGT - UK: Output Prices Core (unadj.) (Dec) [Mkt: 0, Prev: -0.2]

09:30 GMT / 17:30 SGT - UK: Input Prices (nsa) (Dec) [Mkt: 0.2, Prev: -0.3]

09:30 GMT / 17:30 SGT - UK: CPI (Dec) 4cast: 1.5% y/y [Mkt: 1.5, Prev: 1.5]

09:30 GMT / 17:30 SGT - UK: Output Prices (unadj.) (Dec) [Mkt: 1, Prev: 0.5]

09:30 GMT / 17:30 SGT - UK: Input Prices (nsa) (Dec) [Mkt: -0.9, Prev: -2.7]

09:30 GMT / 17:30 SGT - UK: Retail Sales (inc Auto Fuel) (Dec) 4cast: 0.5% m/m [Mkt: 0.6, Prev: -0.6]

09:30 GMT / 17:30 SGT - UK: Retail Sales (ex Auto Fuel) (Dec) [Mkt: 0.8, Prev: -0.6]

09:30 GMT / 17:30 SGT - UK: Retail Sales (ex Auto Fuel) (Dec) [Mkt: 3, Prev: 0.8]

09:30 GMT / 17:30 SGT - UK: Retail Sales (inc Auto Fuel) (Dec) [Mkt: 2.7, Prev: 1]

10:00 GMT / 18:00 SGT - EU: Trade Balance (sa) (Nov) [Mkt: 22, Prev: 24.5]

10:00 GMT / 18:00 SGT - EU: Industrial production (Nov) [Mkt: -1, Prev: -2.2]

13:30 GMT / 21:30 SGT - US: PPI (ex Food & Energy) (Dec) 4cast: 0.3% m/m [Mkt: 0.2, Prev: -0.2]

13:30 GMT / 21:30 SGT - US: PPI (Dec) 4cast: 0.3% m/m [Mkt: 0.2, Prev: 0]

13:30 GMT / 21:30 SGT - US: Empire State Survey (Jan) [Mkt: 3.6, Prev: 3.5]

14:00 GMT / 22:00 SGT - CA: Existing Home Sales (Dec) [Prev: 0.6]

23:50 GMT / 07:50 SGT - JP: PPI (Dec) [Mkt: 0.1, Prev: 0.2]

23:50 GMT / 07:50 SGT - JP: PPI (Dec) [Mkt: 0.5, Prev: 0.1]

23:50 GMT / 07:50 SGT - JP: Core Machine orders (Nov) 4cast: -7.5% y/y [Mkt: -5.4, Prev: -6.1]

EVENTS & AUCTIONS

00:30 GMT / 08:30 SGT - JP: BoJ's Kuroda Speaks at Branch Managers' Meeting

08:40 GMT / 16:40 SGT - UK: BoE's Saunders Speaks in Bangor, Northern Ireland

16:00 GMT / 00:00 SGT - US: Fed's Harker speaks in New York

17:00 GMT / 01:00 SGT - US: Fed's Kaplan speaks in New York

19:00 GMT / 03:00 SGT - US: Fed Releases Beige Book


Forex - Asia Open - Overnight Highlights


 23:51 (GMT) 14 Jan

 [Forex Highlights]

Asia Overnight Highlights - 15 Jan 2020

MAJORS

FX Highlights

The Bloomberg dollar spot index edged a little firmer in a quiet European morning, gaining ground against the EUR, CAD and GBP but moving little against the JPY. The movement in North America was however in the opposite direction. A soft US CPI got little response but may have weighed on USD sentiment.

USD/JPY was never very far from 110 but fell to the day's lows on a report that US tariffs on China would persist through the election.

GBP/USD outperformed pushing above 1.30 while EUR/USD failed to fully erase earlier losses that bottomed a little above 1.11. Early in the session EUR/GBP broke the December high, but fell back after that, though the bund/gilt spread narrowed to its lowest level since May 2018.

Early weakness in equities coincided with USD gains against the riskier currencies, but did not persist. USD/CAD fully reversed early gains but AUD/CAD held above .90.

Data/Events Highlights:

- US Dec CPI +0.2% vs 0.3% exp, ex food and energy +0.1% vs 0.2% exp.

- VIX index: 12.39 (+0.57%)

- Gold Spot: $1,548.84/oz (+0.16%)

- ICE Brent front contract: $64.49 (+$0.29)

- Nymex WTI front contract: $58.20 ($-0.03)

- Reuters/Jefferies Commodities Index: 183.64 (+0.35%)

- 10y UST: 1.811% (-3bp) (Asia morning)

- DJI: 28,939.67 (+0.11%); S&P: 3,283.15 (-0.15%); Nasdaq: 9,251.33 (-0.24%)

Data/Events Ahead:

U.S. Dec PPI on Wednesday should see 0.3% gains both overall and ex food and energy, the core rate correcting from a below trend Nov.

Insight on manufacturing will come from Jan's Empire State today.

Eurozone November industrial production is expected to rise by 0.4% m/m but still be some 0.1% q/q lower compared to the three months ending in August. On the same day, November trade balance data will be released.

We anticipate no further fall in the UK CPI inflation rate in December, instead once again staying at 1.5% y/y, still a 3-year low, but further consolidating the drop from 2%-plus seen since the middle of last year.

EMERGING ASIA

FX Highlights:

A mixed day for Asian currencies on Tuesday following the announcement of the U.S. Treasury currency manipulator list, which were largely in favour to Asia. PHP reopened for trading on Tuesday, after markets closed due to Taal volcanic eruption on Monday. PHP was the biggest winner, up 0.30% against the dollar as pair caught up with the gains seen in Asia emerging markets. CNY was up 0.13%, as U.S. removed China's label as a currency manipulator. TWD was up 0.12% against the dollar. Meanwhile, both MYR and THB were down 0.25% and 0.19% respectively against the greenback.

USD/CNH traded mostly below 6.8900 overnight but upside pressures to 6.9000 returned in early Asian hours on Wednesday following a report that China tariffs will stay until the US Nov elections. Further downside toward six-month lows of 6.8600 levels remains likely, ahead of the trade deal and Lunar New Year. USD/CNY onshore spot also remained depressed below 6.9000 on Tuesday as trade deal optimism persisted and sentiment was boosted by China being de-labeled as a currency manipulator. Fresh 5-month lows of 6.8661 were printed. More downside bias expected after yuan's removal from the currency manipulator list, with eyes now on next support at 6.8320 for USD/CNY. 1Y NDFs saw sharp gains early this morning to 6.9802 at last look after trading below 6.9700 in NY.

USD/SGD reversed gains from the European session to trade below 1.3470 in NY but upside pressures returned in early Asian hours on Wednesday and pair touched 1.3480 highs at last check. Return of the tariff thread weighed on Asian currencies again as reports suggested US will keep tariffs on China until the November elections and phase 2 talks. Support level of 1.3444 still holds, with resistance at 1.3510. A downward momentum could bring the pair to the lows of 1.3300.

USD/IDR 1M NDFs saw gains to 13720+ levels in late NY hours from sub-13680 levels seen in Tuesday's Asian session. USD/IDR onshore spot gapped lower again on Tuesday to open at 13655 from previous close of 13673 and traded horizontally around 13650 in the morning. Trade optimism and US treasury relief underpinned. Meanwhile, BI's non-intervention and UAE's investment are further boosting rupiah sentiment. Pair however reversed slightly higher to 13680 into the close. Supports seen at 13645 and 13600, but we believe the doors to 13500 are now open if positive trade sentiment is sustained.

USD/INR 1M NDFs traded higher to 71.150+ levels in late Asian hours on Tuesday and traded mostly sideways thereafter. USD/INR onshore spot gapped lower again to open at 70.740 on Tuesday from previous close of 70.860 amid further improvement in sentiment after US Treasury removed China's labeling as a currency manipulator. However gains in the rupee could not catch up with Asian peers and pair traded back above 70.900 in the afternoon given the surge in headline inflation to over 5-year highs in December. Food price gains underpinned the surge in inflation, and this will likely delay any further easing by the RBI. We maintain our view that break below the 71 handle will likely remain temporary given a host of domestic challenges.

Data/Events Highlights:

China's December exports and imports both came in stronger-than-expected. Exports rose 7.6% y/y in December after four consecutive months of contraction, while imports climbed 16.3% y/y from 0.3% y/y in November partly due to base effects.

India's December WPI also came in stronger than expected at 2.59% y/y from 0.58% y/y previously.

Data/Events Ahead:

December trade data for both India and Indonesia is due in Asia today, and we expect narrower trade deficits for both.

DATA RELEASES DUE TODAY

PH: Overseas Remittances (Nov) 4cast: 3.5% y/y [Mkt: 4, Prev: 8]

PH: Overseas Remittances (Nov) 4cast: 2.407USD bn [Mkt: 2.436, Prev: 2.671]

IN: Exports (Dec) 4cast: -3% y/y [Prev: -0.3]

IN: Imports (Dec) 4cast: -9% y/y [Prev: -12.7]

IN: Trade Balance (Dec) 4cast: -10.224USD bn [Mkt: -11.6, Prev: -12.12]

23:50 GMT / 07:50 SGT - JP: M2 Money Supply (Dec) [Prev: 2.8]

04:00 GMT / 12:00 SGT - ID: Exports (Dec) 4cast: -3.3% y/y [Mkt: -2.2, Prev: -5.67]

04:00 GMT / 12:00 SGT - ID: Imports (Dec) 4cast: -7% y/y [Mkt: -5, Prev: -9.24]

04:00 GMT / 12:00 SGT - ID: Trade Balance (Dec) 4cast: -430USD mn [Mkt: -430, Prev: -1330]

09:30 GMT / 17:30 SGT - UK: CPI (Dec) [Mkt: 0.2, Prev: 0.2]

09:30 GMT / 17:30 SGT - UK: Output Prices Core (unadj.) (Dec) [Mkt: 0, Prev: -0.2]

09:30 GMT / 17:30 SGT - UK: Input Prices (nsa) (Dec) [Mkt: 0.2, Prev: -0.3]

09:30 GMT / 17:30 SGT - UK: CPI (Dec) 4cast: 1.5% y/y [Mkt: 1.5, Prev: 1.5]

09:30 GMT / 17:30 SGT - UK: Output Prices (unadj.) (Dec) [Mkt: 1, Prev: 0.5]

09:30 GMT / 17:30 SGT - UK: Input Prices (nsa) (Dec) [Mkt: -0.9, Prev: -2.7]

09:30 GMT / 17:30 SGT - UK: Retail Sales (inc Auto Fuel) (Dec) 4cast: 0.5% m/m [Mkt: 0.6, Prev: -0.6]

09:30 GMT / 17:30 SGT - UK: Retail Sales (ex Auto Fuel) (Dec) [Mkt: 0.8, Prev: -0.6]

09:30 GMT / 17:30 SGT - UK: Retail Sales (ex Auto Fuel) (Dec) [Mkt: 3, Prev: 0.8]

09:30 GMT / 17:30 SGT - UK: Retail Sales (inc Auto Fuel) (Dec) [Mkt: 2.7, Prev: 1]

10:00 GMT / 18:00 SGT - EU: Trade Balance (sa) (Nov) [Mkt: 22, Prev: 24.5]

10:00 GMT / 18:00 SGT - EU: Industrial production (Nov) [Mkt: -1, Prev: -2.2]

13:30 GMT / 21:30 SGT - US: PPI (ex Food & Energy) (Dec) 4cast: 0.3% m/m [Mkt: 0.2, Prev: -0.2]

13:30 GMT / 21:30 SGT - US: PPI (Dec) 4cast: 0.3% m/m [Mkt: 0.2, Prev: 0]

13:30 GMT / 21:30 SGT - US: Empire State Survey (Jan) [Mkt: 3.6, Prev: 3.5]

14:00 GMT / 22:00 SGT - CA: Existing Home Sales (Dec) [Prev: 0.6]

23:50 GMT / 07:50 SGT - JP: PPI (Dec) [Mkt: 0.1, Prev: 0.2]

23:50 GMT / 07:50 SGT - JP: PPI (Dec) [Mkt: 0.5, Prev: 0.1]

23:50 GMT / 07:50 SGT - JP: Core Machine orders (Nov) 4cast: -7.5% y/y [Mkt: -5.4, Prev: -6.1]

EVENTS & AUCTIONS

00:30 GMT / 08:30 SGT - JP: BoJ's Kuroda Speaks at Branch Managers' Meeting

08:40 GMT / 16:40 SGT - UK: BoE's Saunders Speaks in Bangor, Northern Ireland

16:00 GMT / 00:00 SGT - US: Fed's Harker speaks in New York

17:00 GMT / 01:00 SGT - US: Fed's Kaplan speaks in New York

19:00 GMT / 03:00 SGT - US: Fed Releases Beige Book


Forex - China Dec Exports 7.6% y/y (Prev: -1.3 Mkt: 2.9 4CAST: 3.2)


 03:26 (GMT) 14 Jan

 [Economic Data]

Please view the story for more information...


Forex - Malaysia Flows: USD/MYR testing 4.0800 support, November's industrial production surprised on the upside


 04:21 (GMT) 10 Jan

 [Forex Flows]

USD/MYR opened flat at 4.0880 on Friday, before dipping to 4.0810, closing in on the 4.0800 support. Ringgit strengthened amid easing risk-off sentiments and stronger than expected Malaysia's industrial production. Industrial production surprised on the upside as it rose to 2.0% y/y in November from 0.3% y/y in October. A break below the 4.0800 support will shift our attention to the 4.0730 and 4.0700 support next. 1M NDFs were trading at 4.0846 at last look. KLCi was down 0.23% at last sight.


Forex - Asia Open - Overnight Highlights


 23:46 (GMT) 07 Jan

 [Forex Highlights]

Asia Overnight Highlights - 08 Jan 2020

MAJORS

FX Highlights

The Bloomberg dollar spot index was bid on Tuesday with US non-manufacturing PMI rising a little more than the market expected.

USD/JPY reached as high as 108.62 in NY but fell sharply to 108.10 levels in early Asian hours amid reports of 5-6 rocket attacks on US forces in Iraq - some of which were reported to be untrue.

AUD weakness continued into the overnight session, and looks to be a continuation of the reaction to the weak job ads data in Tuesday's Asian session.

EUR/GBP dipped to 0.8470 in early European trading, without an obvious trigger, following on from Monday's GBP strength, and a bounce back above .85 was sold. The UK budget date was announced as March 11, a little later than most had expected.

Data/Events Highlights:

- US Nov trade deficit fell to $43.1bn from $46.9bn vs $43.6bn exp.

- US Dec ISM non-manufacturing rose to 55.0 from 53.9 vs 5.5 exp.

- US Nov factory orders -0.7% vs -0.8% exp.

- Eurozone HICP inflation rose to 1.3% y/y in December from 1.0% y/y in November, reaching its highest level since June after spending five months at or below 1.0%. Retail sales showed a strong recovery, rising 1.0% in November after the 0.3% decline in October.

- VIX index: 13.79 (-0.43%)

- Gold Spot: $1,580.12/oz (+0.37%)

- ICE Brent front contract: $68.27 ($-0.64)

- Nymex WTI front contract: $63.13 (+$0.43)

- Reuters/Jefferies Commodities Index: 186.93 (-0.25%)

- 10y UST: 1.818% (+1bp) (Asia morning)

- DJI: 28,583.68 (-0.42%); S&P: 3,237.18 (-0.28%); Nasdaq: 9,068.58 (-0.03%)

Data/Events Ahead:

U.S. ADP private sector employment data for Dec is due today. We expect a rise of 165k, slightly underperforming payrolls but a significant improvement from a sharp underperformance in Nov. Nov consumer credit data will also be released.

Japan's labor cash earnings data is likely to remain weak in November, with consensus expecting a minor decline of 0.2% y/y.

The European Commission will release the December values for the confidence and sentiment indicators, the latter likely to consolidate the jump from October's cycle-low.

German November factory orders are expected to fall further by 0.5% m/m and by 5.3% y/y. This follows a 0.4% m/m fall in October driven by sharp contraction in domestic orders more than offsetting the solid growth in foreign orders.

EMERGING ASIA

FX Highlights:

Most Asian currencies recorded gains against the USD on Tuesday as risk aversion abated with no further escalations in U.S.-Iran tensions until yesterday. Investors focused back on the phase 1 trade deal which is expected to be signed on January 15, and KRW (+0.48%) and IDR (+0.48%) led the gains. CNY (+0.44%) and CNH (+0.38%) was also up against the US dollar. PHP (+0.36%) was comforted by a rise in December inflation to 2.5% y/y. MYR (+0.28%), INR (+0.15%) and TWD (+0.09%) also recorded modest gains.

USD/CNH traded with an offered tone on Tuesday in the Asian session and printed lows of 6.9293 from earlier levels of 6.9700 but later traded sideways around 6.9450 in NY. Escalation of the Middle East tensions will however keep gains in Asian currencies in check - unless all proved false. We expect pair to return to 6.9700+ levels. USD/CNY onshore spot printed fresh 5-month lows of 6.9315 on Tuesday breaking the long term support at 6.9495. Eyes on the psychological hurdle at 6.9000 but upside pressures may return as geopolitical tensions return. 1Y NDFs also slid lower to 7.0045 in the European hours and later consolidated just below 7.0200 in NY.

USD/SGD was offered to lows of 1.3477 in the European hours on Tuesday amid some improvement in risk sentiment but pair reversed gears to return higher in NY above the 1.3500 handle. Pair last seen testing resistance at 1.3515 as escalations were seen in the US-Iran situation early this morning. Break of 1.3510 resistance likely on cards as geopolitical tensions return. Pair may however return to a bearish trajectory, and may eye the 1.3444 support and 1.3400 big figure when things cool down.

USD/IDR 1M NDFs reversed the dip seen to 13902 in Tuesday's Asian session and traded sideways around 13940 in NY - still lower than 14000 levels seen on Monday. USD/IDR onshore spot gapped lower to open at 13934 on Tuesday from previous close of 13944 and traded below 13900 into the noon. Pair printed intraday lows of 13878 at close amid an improvement in risk sentiment. Strong support at 13865 may be a risk but will likely hold for now as geopolitical tensions return. Pair may reverse higher to 13950 levels if reports of Iran's attacks on US military bases are true.

USD/INR 1M NDFs traded with a steady upside bias on Tuesday and rose from lows of 71.900 in Asia to 72.200-levels in NY. USD/INR onshore spot gapped lower to reverse back below the 72 handle on Tuesday - opening at 71.760 and sliding to lows of 71.690. Softening in oil prices as markets discounted the Middle East tensions helped in a recovery of the INR, and reports also suggested a cut in spending to contain the fiscal deficit. Pair however returned to 71.800-levels in the afternoon as weak advance GDP growth estimate of 5% for FY20 was reported. We still have our eyes on the upside for the pair, and we believe another test of the 72 handle remains likely if risk sentiment deteriorates.

Data/Events Highlights:

Philippines inflation accelerated again in December to 2.5% y/y, as base effects continue to wear off.

Data/Events Ahead:

Quiet day ahead in emerging Asia in data terms.

DATA RELEASES DUE TODAY

00:30 GMT / 08:30 SGT - AU: Building approvals (Nov) [Mkt: -11.7, Prev: -8.1]

10:00 GMT / 18:00 SGT - EU: Economic Confidence (Dec) [Mkt: 101.5, Prev: 101.3]

10:00 GMT / 18:00 SGT - EU: Consumer Confidence (Dec Final) [Prev: -8.1]

13:15 GMT / 21:15 SGT - US: ADP Employment Survey (Dec) 4cast: 165k [Mkt: 160, Prev: 67]

20:00 GMT / 04:00 SGT - US: Consumer Credit (Nov) [Mkt: 15.8, Prev: 18.908]

EVENTS & AUCTIONS

18:00 GMT / 02:00 SGT - US: 10 year notes auction


Forex - Asia Open - Overnight Highlights


 23:54 (GMT) 01 Jan

 [Forex Highlights]

Asia Overnight Highlights - 02 Jan 2020

MAJORS

FX Highlights

Year-end flows continue to count against the USD in thin conditions amid improved investor confidence in global growth prospects and the phase 1 US-China trade deal which is expected to be signed on Jan 15. A USD bounce could be seen in early 2020, as flows normalize. Even so, sentiment is negative towards the USD based on easing trading tensions and a sense that the USD is overvalued.

USD/JPY slipped marginally below 108.50 before a modest correction with the help of Trump tweeting that the phase 1 trade deal with China would be signed on Jan 15. EUR/USD peaked at 1.1239. GBP/USD outperformed, teaching 1.3283 as EUR/GBP came close to .8450.

EUR/JPY and EUR/CHF stabilized after Monday's rally for the two safe haven currencies. The commodity currencies firmed, particularly the CAD, USD/CAD falling below 1.30 despite US data having generally looked stronger than Canadian over recent weeks. Middle East tensions may be supporting the CAD even if the oil price saw little response.

Data/Events Highlights:

- US Dec consumer confidence 126.5 vs 126.8 in Nov and 128.5 exp.

- Trump stated will sign phase 1 trade deal with China on Jan 15.

- VIX index: 13.78 (-7.02%)

- Gold Spot: $1,519.66/oz (+0.16%)

- ICE Brent front contract: $66.00 ($-0.67)

- Nymex WTI front contract: $61.50 (+$0.44)

- Reuters/Jefferies Commodities Index: 185.79 (-0.57%)

- 10y UST: 1.918% (0bp) (Asia morning)

- DJI: 28,538.44 (+0.27%); S&P: 3,230.78 (+0.29%); Nasdaq: 8,972.60 (+0.30%)

Data/Events Ahead:

In the US today, we see weekly initial claims and final Dec Markit manufacturing PMI.

Eurozone Markit should confirm the flash December reading of the manufacturing PMI of 45.9.

German manufacturing PMI is also out today. We expect a confirmation of the flash reading showing a fresh decline in manufacturing PMI, down to 43.4 (44.1 in Nov), implying a larger fall in industrial output.

UK final Manufacturing PMI data will be interesting to see if the innovative flash suffer the large revisions seen last time around - NB the flash December reading was down 1.5 points to a four-month low of 47.4.

EMERGING ASIA

FX Highlights:

Most Asian currencies were in gains against the USD on Tuesday as the dollar was on a backfoot amid improved confidence over global growth prospects and the US-China phase 1 trade deal. IDR (+0.43%) led the pack, followed by MYR (+0.39%), CNY (+0.34%), CNH (+0.27%) and SGD (+0.26%).

USD/CNH saw a sharp fall from 6.9850-levels to trade mostly below 6.9650 in Tuesday's NY session. Trade was muted on Wednesday despite the announcement of a 50bps cut in RRR by the PBoC effective 6 January 2020. Sustained downside bias could bring the pair lower to its next support at 6.9518. Eyes now on December Caixin manufacturing PMI due today. USD/CNY likewise saw a bearish bias on Tuesday and broke below 6.9600 to 2.5-week lows of 6.9590 before a slight recovery back just above the level. Downside bias still holds, with the support level at 6.9570. 1Y NDFs plummeted to sub-7.0400 levels on Tuesday and were choppy on Wednesday without a clear bias.

USD/SGD saw lows of 1.3445 on Tuesday in the NY session amid a weaker USD helping Asian currencies to gain. Pair returned to slightly above 1.3450 in early Asian hours this morning and will likely remain mixed ahead of the Q4 GDP release at 00:00 GMT. Following the break of the 1.3503 strong support, downside potential exists for the pair to re-test 2019 low at 1.3444.

USD/IDR 1M NDFs were seen below 13880 in Tuesday's overnight session from 13945 highs earlier in the day as the USD was on a backfoot. USD/IDR onshore spot also traded with an offered tone to fresh 18-month lows of 13866 on Tuesday amid improved trade deal and global growth sentiment. Pressures remains on the downside, and break of the key 13890 support has opened the doors to 13840 and 13802 support levels.

USD/INR 1M NDFs traded in consolidation around 71.500 levels on Tuesday and Wednesday despite improved risk sentiment. USD/INR onshore spot likewise has remained in range into the new year, closing last at 71.2225 and with the upside limited at 71.400. Break of 71.295 resistance exposes next resistance at 71.355 but we believe the upmove may remain subtle as global risk sentiment improves.

Data/Events Highlights:

The PBoC announced a cut of 50bps in RRR effective January 6th.

South Korea's exports remained in the red in December, but came in slightly better than expected at -5.2% y/y. Imports were also in mild red at -0.7% y/y which brought the trade balance to a smaller $2017 million.

Data/Events Ahead:

A bunch of data due in Asia today. Singapore's Q4 GDP should be released first, and we expect a slight uptick to 0.7% y/y.

China's December Caixin manufacturing PMI will also be closely watched.

Dec inflation prints for Indonesia and Thailand will also be released in the Asian morning.

India's December manufacturing PMI is due later in the day, along with Hong Kong's November retail sales.

DATA RELEASES DUE TODAY

00:00 GMT / 08:00 SGT - SG: GDP (4Q A) 4cast: 0.7% y/y [Mkt: 1, Prev: 0.5]

00:00 GMT / 08:00 SGT - SG: GDP Annual (2019) 4cast: 0.6% y/y [Mkt: 0.8, Prev: 3.1]

01:45 GMT / 09:45 SGT - CN: Caixin Manufacturing PMI (Dec) 4cast: 52 [Mkt: 51.5, Prev: 51.8]

03:30 GMT / 11:30 SGT - TH: CPI (Dec) 4cast: 0.6% y/y [Mkt: 0.6, Prev: 0.21]

03:30 GMT / 11:30 SGT - TH: CPI Core (Dec) 4cast: 0.5% y/y [Mkt: 0.5, Prev: 0.47]

04:00 GMT / 12:00 SGT - ID: CPI (Dec) 4cast: 2.9% y/y [Prev: 3]

05:00 GMT / 13:00 SGT - IN: PMI Manufacturing (Dec) 4cast: 50.8 [Prev: 51.2]

05:30 GMT / 13:30 SGT - AU: Commodity Index (Dec) [Prev: 115.9]

09:00 GMT / 17:00 SGT - EU: Manufacturing PMI (Dec Final) [Prev: 45.9]

09:30 GMT / 17:30 SGT - UK: CIPS / Markit Manufacturing PMI (Dec Final) [Prev: 47.4]

13:30 GMT / 21:30 SGT - US: Initial Claims (Dec 28) [Prev: 222]

14:45 GMT / 22:45 SGT - US: Markit Manufacturing PMI (Dec F) [Prev: 52.5]

EVENTS & AUCTIONS

No Key Events Scheduled


Forex - Asia Open - Overnight Highlights


 00:15 (GMT) 31 Dec

 [Forex Highlights]

Asia Overnight Highlights - 31 Dec 2019

MAJORS

FX Highlights

USD had a soft tone entering European trading, EUR/USD touching above 1.12 and USD/JPY touching below 109.00 though neither extending much further. Profit taking in equities weighed on the USD. The USD move is also being impacted by the growing view that the USD will likely lose ground in 2020, given the overvaluation of the USD and uncertainty surrounding the US election.

As equities came under some pressure, CHF and JPY performed well across the board, but especially against the USD. The economic data and news failed to provide direction, despite the U.S. trade deficit coming in lower and reports that a China delegation will come to Washington on Saturday January 4.

GBP consolidated gains in Monday's trading. GBP has gained ground over the holiday period across the board. A feeling that the pre-Christmas sell got overdone is one factor. Additionally, a more mixed view is emerging on the trade negotiations with the EU. While the majority are concerned that insufficient time exists to get a trade deal by Dec 2020, a growing minority see a Canada style deal being done and the UK economy being boosted by post-election optimism and fiscal stimulation.

Data/Events Highlights:

- US Nov advance goods trade deficit fell to $63.2bn from $66.8bn vs $68.7bn exp.

- US Dec Chicago PMI rose to 48.9 from 46.3 vs 47.9 exp.

- US Nov pending home sales +1.2% vs 1.4% exp.

- VIX index: 14.82 (+10.35%)

- Gold Spot: $1,515.30/oz (+0.01%)

- ICE Brent front contract: $66.67 ($-0.20)

- Nymex WTI front contract: $61.67 ($-0.01)

- Reuters/Jefferies Commodities Index: 186.85 (-0.18%)

- 10y UST: 1.879% (+0bp) (Asia morning)

- DJI: 28,462.14 (-0.64%); S&P: 3,221.29 (-0.58%); Nasdaq: 8,945.99 (-0.67%)

Data/Events Ahead:

Tuesday December 31 sees US Oct house price data from FHFA and S&P Case-Shiller. Dec consumer confidence follows, with other surveys hinting at improvement.

EMERGING ASIA

FX Highlights:

All the Asian currencies were largely unchanged on Monday as 2019 drew to a close. However, news of Chinese Vice Premier Liu He visiting U.S. to sign the "phase 1" trade deal may spur a rise in risk-on sentiments.

USD/CNH spot saw a slide lower on Monday Asian morning to a two-week low of 6.9751, as risk-on sentiment underpinned following the PBoC's announcement on Saturday that banks should use the recently introduced loan prime rate as the pricing reference for loans starting January 2020. However, pair rebounded to 6.9850 during late Monday NY hours. Following the break of the 6.9800 support for USD/CNH, downside bias could bring the pair lower to its next support at 6.9518. Eyes now on December official manufacturing PMI and non-manufacturing PMI due on later in the day. USD/CNY dipped to 6.9811, before rebounding back to 6.9865 at last look. Downside bias still holds, with the support level at 6.9570. 1Y NDFs plummeted to 7.0500 on Monday, but was trading relatively steadily around the 7.0550 at last look.

USD/SGD broke below the six-month low of 1.3503 during Asian Monday morning. Continuous risk-on sentiment underpinned despite generally quiet markets. Pair slipped lower to 1.3483 at last look. Following the break of the 1.3503 strong support, downside potential exists for the pair to re-test January's low at 1.3444.

USD/IDR 1M NDFs traded lower to around 13930 on Monday and was last seen at 13940. Rupiah eked out further gains as Monday, risk sentiment supported by trade hopes. USD/IDR opened a notch lower at 13945 on Monday, and traded around 13925 after. Trade deal still seen on track as China Commerce ministry says China and US still going through the necessary procedures, maintaining close communication on signing the deal. That should support Asian currencies into the new year. Pressures on the downside, and we eye on support at 13900 level. 1M NDFs eased to 13970 at last look.

USD/INR 1M NDFs were relatively stable around 71.56 on Monday, last seen at 71.55. USD/INR traded relatively steadily on Monday on either side of 71.3500. Meanwhile, dollar extended its down leg for a third day due to year-end selloff, and risk sentiment remained supported as the phase-one trade deal seem on track. Break of 71.295 resistance exposes next resistance at 71.355.

Data/Events Highlights:

Hong Kong November trade numbers were better than expected, however, they still remained weak. Exports and imports fell by 1.4% y/y and 5.8% respectively, resulting in a trade balance of HKD -26.2 bn. South Korea's December CPI beat market expectations (0.6% y/y) as it ticked higher to 0.7% y/y from 0.2% y/y.

Data/Events Ahead:

China's PMI numbers will be out early Tuesday. We expect non-manufacturing PMI to edge up to 54.8 in Dec from 54.40 prior, similarly, manufacturing PMI is likely to tick up to 50.4 in Dec from 50.20 prior.

DATA RELEASES DUE TODAY

23:50 GMT / 07:50 SGT - JP: Bank Lending Data (Ex trusts) (Dec) [Prev: 2.3]

00:30 GMT / 08:30 SGT - AU: Private Sector Credit (Nov) [Mkt: 0.2, Prev: 0.1]

01:00 GMT / 09:00 SGT - CN: Non-manufacturing PMI (Dec) 4cast: 54.8 [Mkt: 54.4, Prev: 54.4]

01:00 GMT / 09:00 SGT - CN: Manufacturing PMI (Dec) 4cast: 50.4 [Mkt: 50, Prev: 50.2]

13:00 GMT / 21:00 SGT - US: S&P Case-Shiller Home Price (Oct) [Prev: 2.1]

15:00 GMT / 23:00 SGT - US: FHFA House Price Index (Oct) [Prev: 0.6]

15:00 GMT / 23:00 SGT - US: Consumer Confidence (Dec) [Mkt: 128, Prev: 125.5]

EVENTS & AUCTIONS

No Key Events Scheduled


Forex - Asia Open - Overnight Highlights


 23:22 (GMT) 26 Dec

 [Forex Highlights]

Asia Overnight Highlights - 27 Dec 2019

MAJORS

FX Highlights

Quiet markets likely to persist even as most Asian centers come back on Friday. Commodity strength into year-end alongside the generally firm risk tone still helping to keep commodity FX trending up.

The USD weakened as a result, led by gains in NZD but with recoveries in NOK and CAD and pushes into the highs for AUD.

USD/JPY still pressing the recent ceiling with S&P eking new highs

Data/Events Highlights:

- US Initial Claims fall to 222k from 235k, in line with mkt

- VIX index: 12.65 (-0.16%)

- Gold Spot: $1,512.70/oz (+0.08%)

- ICE Brent front contract: $67.99 (+$0.79)

- Nymex WTI front contract: $61.68 (+$0.57)

- Reuters/Jefferies Commodities Index: 186.68 (+0.62%)

- 10y UST: 1.894% (-1bp) (Asia morning)

- DJI: 28,621.39 (+0.37%); S&P: 3,239.91 (+0.51%); Nasdaq: 9,022.39 (+0.78%)

Data/Events Ahead:

Japan's November unemployment rate will be due, which we expect a no change at 2.4%. Retail sales are likely to remain weak in November due to the impact of sales tax hike. We expect to see a further decline of 4.1% y/y in November following a sharp drop in October. Meanwhile, industrial production are seen in contraction of 4.8% y/y in November. Tokyo CPI, a leading indicator for national CPI, will be out today as well.

EMERGING ASIA

FX Highlights:

Most Asian currencies saw gains against the greenback on Thursday amid improved risk sentiment with China seen to be stabilizing following the phase 1 trade deal. Gains were led by CNH (+0.18%), KRW (+0.16%), CNY (+0.15%) and IDR (+0.15%). But most pairs still remained pivoted around key figures. Only INR and PHP saw mild losses.

USD/CNH was seen slightly below the 7 handle on Thursday and traded on either side of 6.9950. Support level of 6.9895 still holds, while resistance level is at 7.0087 for now. USD/CNY onshore spot in contrast was a notch higher but still range bound, and closed at 6.9980. Support level of 6.9570 for USD/CNY is still in view, and we expect resistance at 7.0128. 1Y NDFs were still flatlined at 7.0700 in Thursday's NY session.

USD/SGD was seen with a downside bias on Thursday as risk sentiment improved further after China confirmed talks were ongoing with the US for signing ceremony of the phase 1 trade deal. Pair was seen at fresh over 1-week lows of 1.3537. Pair may retest the support of 1.3530 and a break of this handle will further extend the fall from its September high. On the other side, resistance is now at 1.3569.

USD/IDR 1M NDFs were also seen with a bearish bias on Thursday amid improved prospects of US-China phase 1 trade deal signing in January. Pair slid below 13980 from near 14000 levels earlier. The onshore spot USD/IDR remained weak as the markets opened after a 2-day holiday, and was seen sliding to lows of 13950 again into the close. Break of 13950 support will put the focus on 13900 but stronger support is seen at 13890.

USD/INR 1M NDFs was still seen with a bullish bias rising back to 71.500 levels on Thursday as domestic issues underpinned. The onshore pair USD/INR was seen below 71.250 earlier on Thursday but regained a bid tone later and rose to 71.3575 highs later in the day. Higher crude oil prices also underpinned. Focus likely to be on the upside with a break of 71.295 resistance. We believe any move below 70.500 will likely continue to see buyers.

Data/Events Highlights:

Singapore's IP fell by 9.3% y/y in November, coming in weaker than market expectations of -0.8% and was a deterioration from +3.6% y/y in October. The return to contraction in electronics, by a 20.9% y/y drop in November compared to a growth of 0.9% y/y in the prior month meanwhile dented hopes of a bottoming out in the manufacturing sector.

Data/Events Ahead:

China's industrial profits for November are due in the Asian morning hours.

DATA RELEASES DUE TODAY

23:30 GMT / 07:30 SGT - JP: Job-to-Applicant Ratio (Nov) [Mkt: 1.57, Prev: 1.57]

23:30 GMT / 07:30 SGT - JP: Unemployment (Nov) 4cast: 2.4% [Mkt: 2.4, Prev: 2.4]

23:50 GMT / 07:50 SGT - JP: Industrial Production (Nov P) [Mkt: -1.5, Prev: -4.5]

23:50 GMT / 07:50 SGT - JP: Industrial Production (Nov P) 4cast: 4.8% y/y [Mkt: -8.8, Prev: -7.7]

23:50 GMT / 07:50 SGT - JP: Retail Sales (Nov) [Mkt: 5.4, Prev: -14.4]

23:50 GMT / 07:50 SGT - JP: Retail Sales (Nov) 4cast: 4.1% y/y [Mkt: -1.4, Prev: -7.1]

EVENTS & AUCTIONS

No Key Events Scheduled


Forex - Asia Open - Overnight Highlights


 23:50 (GMT) 25 Dec

 [Forex Highlights]

Asia Overnight Highlights - 26 Dec 2019

MAJORS

FX Highlights

Quiet markets with Hong Kong, Australia and New Zealand away on Thursday as well. Pretty much pancake flat across the board in the majors and no real prospect of that changing today.

China finally commented on the phase 1 trade deal and said they are in close communication with US on the signing ceremony.

Cable stuck around 1.3000 and EUR/USD still below 1.1100. USD/JPY just below 109.50.

AUD/USD around 0.6920 and NZD/USD inching slightly higher to 0.6645.

Data/Events Highlights:

- VIX index: 12.67 (+0.48%)

- Gold Spot: $1,498.40/oz (-0.10%)

- ICE Brent front contract: $67.20 (+$0.81)

- Nymex WTI front contract: $61.24 (+$0.13)

- Reuters/Jefferies Commodities Index: 185.53 (+0.58%)

- 10y UST: 1.900% (0bp) (Asia morning)

- DJI: 28,515.45 (-0.13%); S&P: 3,223.38 (-0.02%); Nasdaq: 8,952.88 (+0.08%)

Data/Events Ahead:

In the US, weekly initial claims are due today. This series is often volatile around holidays.

EMERGING ASIA

FX Highlights:

Most Asian currencies remained subdued on Tuesday ahead of the Christmas holiday. Mild gains of 0.15% were see in MYR against the USD, followed by TWD, CNH, CNY and KRW. Only INR (-0.12%) remained in red as domestic issues underpinned.

USD/CNH stayed around the 7 handle on Tues/Wed amid quiet global holiday markets even as the China markets remain open. Support level of 6.9895 still holds, while resistance level is at 7.0087 for now. USD/CNY onshore spot was however seen trading with a downside bias, sliding to lows of 6.9818 on Wednesday. Support level of 6.9570 for USD/CNY is still in view, and we expect support around 6.9570 and resistance at 7.0128. 1Y NDFs were slightly lower at 7.0600 but rebounded to 7.0700 subsequently.

USD/SGD flatlined at 1.3550 on Wednesday and into the Thursday morning Asian hours. Thin holiday momentum underpinned, and the pair is likely to trade between support 1.3540 and resistance 1.3615.

USD/IDR 1M NDFs traded slightly higher to 14000 handle from 13990 earlier on Wednesday. The onshore markets were closed on Tues and Wed for Christmas holidays. We expect a soft momentum into the open today and lows of 13965 are unlikely to be re-tested.

USD/INR 1M NDFs maintained a bullish bias despite the quiet global markets, and were seen at 71.550 levels in early Asian hours this morning from sub-71.450 levels on Wednesday. The onshore pair remained supported above the 71 handle on Tuesday, and printed fresh over 2-week highs of 71.295. We believe any move below 70.500 will likely continue to see buyers.

Data/Events Highlights:

No key data was reported in Asia on Tues/Wed.

Data/Events Ahead:

Singapore's November industrial production is due today in Asian hours.

DATA RELEASES DUE TODAY

05:00 GMT / 13:00 SGT - JP: Construction Orders (Nov) [Prev: 6.4]

05:00 GMT / 13:00 SGT - JP: Housing starts (Nov) [Mkt: -8.1, Prev: -7.4]

05:00 GMT / 13:00 SGT - JP: Housing starts (Ann.) (Nov) [Mkt: 0.882, Prev: 0.879]

05:00 GMT / 13:00 SGT - SG: Industrial Production (sa) (Nov) [Mkt: -0.3, Prev: 3.4]

05:00 GMT / 13:00 SGT - SG: Industrial Production (Nov) [Mkt: -0.4, Prev: 4]

13:30 GMT / 21:30 SGT - US: Initial Claims (Dec 21) [Prev: 234]

23:30 GMT / 07:30 SGT - JP: Job-to-Applicant Ratio (Nov) [Mkt: 1.57, Prev: 1.57]

23:30 GMT / 07:30 SGT - JP: Unemployment (Nov) 4cast: 2.4% [Mkt: 2.4, Prev: 2.4]

23:50 GMT / 07:50 SGT - JP: Industrial Production (Nov P) [Mkt: -1.5, Prev: -4.5]

23:50 GMT / 07:50 SGT - JP: Industrial Production (Nov P) 4cast: 4.8% y/y [Mkt: -8.8, Prev: -7.7]

23:50 GMT / 07:50 SGT - JP: Retail Sales (Nov) [Mkt: 5.4, Prev: -14.4]

23:50 GMT / 07:50 SGT - JP: Retail Sales (Nov) 4cast: 4.1% y/y [Mkt: -1.4, Prev: -7.1]

EVENTS & AUCTIONS

23:50 GMT / 07:50 SGT - JP: BoJ Summary of Opions


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