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.


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