Forex - Asia Highlights - Friday, 18 May 2018


 04:20 (GMT) 18 May

  [Forex Highlights]

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Asia Highlights - Friday, 18 May 2018 (0100-ZRKP-C01)

US Overview:

Thursday was a quiet day with the USD slightly firmer with long end UST yields up but front end yields slipping, as did equities.

US Highlights:

- US initial claims rose to 222k from 211k vs 215k exp.

- US May Philly Fed rose to 34.4 from 23.2 vs 21.0 exp.

- Fed's Kaplan said at or beyond full employment.

- Fed's Kashkari saw low wage growth as a big conundrum.

Currencies:
After a quiet European morning EUR/USD tried the downside from very early N.American hours, but while rising USD yields did encourage another dip through the big Fib level at1.1790 it failed to match Wednesday's 1.1761 low. Bounces have not extended very far, the pair staying close to 1.1800.

The higher yields did manage to lift USD/JPY through 110.50 but the run more a slow walk and falling a long way short of testing the depth of offers at 111.00, 110.85 the high.

GBP reversed the overnight rally as Downing Street debunked the Telegraph story on extended membership of the Customs Union. EUR/GBP reversed the dip through .8725 and GBP/JPY failed to regain 150.00 despite a softer JPY generally. A modest GBP recovery was halted when it was reported the EU had brushed off a pitch from UK PM May on a customs plan.

USD/CHF has spent most of the session on the 1.00 handle but the recent highs at 1.0056 remain out of reach.

Commodity currencies have leaked some ground but USD/CAD comfortably below that much watched 50 day MA (now at 1.2824). Cautious optimism on NAFTA from Canadian PM Trudeau had no impact. AUD/USD is not totally secure on .75 but holding clear of the much travelled .7480 level. The NZD remains poor relation with AUD/NZD holding over 1.09.

EUR/SEK and EUR/NOK are both off recent lows but well within current ranges.

Asia FX and News:
-China Said to Offer Trump $200 Billion Cut in U.S. Trade Deficit ~ BBG
-Trump Urges To Expand Agriculture Trade with China ~ Daily
-Trump Nafta Negotiator Says Nations `Nowhere Near Close to Deal' ~ BBG
-Haven't Decided Action on U.S. Metals Tariffs, Japan's Seko Says ~ BBG
-Japan's Inflation Slows amid Rising Calls for Delay in BOJ Exit ~ BBG
-China Commerce Ministry says to terminate anti-dumping, anti-subsidy investigations on U.S. sorghum ~ Reuters
- US10yr yield on the climb but USD stays flat. USD/JPY facing offers at 111 as yen remains soft with CPI on the weaker side though with US-China trade talks in Washington still in the background. EUR/USD steadies at 1.18, while Cable picks 1.351 to stick to. NZD climbs to the top of the G10 pile, NZD/USD getting off the US session low. AUD/NZD giving 1.09 a test and held. AUD/USD pinned to 0.7510 while AUD/JPY looks to break the neckline of an inverted head-and-shoulder pattern. CAD was given a slight knock as US Nafta negotiator Lighthizer said they are nowhere near close to a deal, but 50 day MA keeps the rise in check on USD/CAD.

Data:

JP: CPI Core (Nation) (Apr) 0.6% y/y (Mkt: 0.7 Prev: 1.1)

JP: Natl CPI Ex Fresh Food, Energy (Apr) 0.4% y/y (Mkt: 0.4 Prev: 0.5)

Still To Be Released:

Data:

06:00 GMT - DE: PPI (Apr) % m/m (Mkt: 0.3 Prev: 0.1)

06:00 GMT - DE: PPI (Apr) % y/y (Mkt: 1.8 Prev: 1.9)

06:00 GMT - DE: Wholesale Price Index (Apr) % m/m (Prev: 0)

06:00 GMT - DE: Wholesale Price Index (Apr) % y/y (Prev: 1.2)

08:00 GMT - EU: Current Account (nsa) (Mar) EUR bn (Prev: 22.7)

08:00 GMT - EU: Current Account (sa) (Mar) EUR bn (Prev: 35.1)

08:00 GMT - IT: Current Account (Mar) EUR mn (Prev: 839)

09:00 GMT - EU: Trade Balance (nsa) (Mar) EUR bn (Prev: 18.9)

09:00 GMT - EU: Trade Balance (sa) (Mar) EUR bn (Mkt: 21 Prev: 21)

12:30 GMT - CA: CPI (Apr) 4cast: 0.3% m/m (Mkt: 0.3 Prev: 0.3)

12:30 GMT - CA: CPI (Apr) 4cast: 2.2% y/y (Mkt: 2.3 Prev: 2.3)

12:30 GMT - CA: Retail Sales (Mar) 4cast: 0.2% m/m (Mkt: 0.3 Prev: 0.4)

12:30 GMT - CA: Retail Sales (ex Auto) (Mar) 4cast: -0.1% m/m (Mkt: 0.5 Prev: 0)

13:00 GMT - BE: BNB Consumer Confidence (May) (Prev: 2)

Events & Auctions:

03:30 GMT - JP: 3mth Bills Auction

07:00 GMT - US: Fed's Mester Speaks in Frankfurt

07:30 GMT - PT: Bank of Portugal's Costa Speaks in Lisbon

10:00 GMT - UK: 182-Day Bills Auction (GBP 1.5bn)

10:00 GMT - UK: 28-Day Bills Auction (GBP 500m)

10:00 GMT - UK: 91-Day Bills Auction (GBP 1bn)

13:15 GMT - US: Fed's Brainard Speaks in New York

13:15 GMT - US: Fed's Kaplan Speaks in Richardson, Texas


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