Forex - Asia Highlights - Friday, 08 Nov 2019


 06:11 (GMT) 08 Nov

  [Forex Highlights]

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Asia Highlights - Friday, 08 Nov 2019 (0101-PRFZ-C01)

Asia Highlights, 08 Nov 2019

US Overview:

The key story was a Chinese Commerce Ministry announcement that the US and China had agreed to a phased reduction in tariffs, seeing UST yields surge while equities and the USD advanced, particularly versus the JPY.

US Highlights:

- US initial claims fell to 211k from 219k vs 215k exp.

- China's Commerce Ministry said US and China agreed to lift tariffs in phases though Reuters later reported some internal US opposition.

Currencies:

After China's Commerce ministry said that the US and China have agreed to a phased reduction in tariffs JPY crosses were the big advancers in the European morning. After dipping in Asia on fears that a deal might be delayed, EUR/JPY traded saw highs above 121, though in the North American session, surging UST yields saw the USD gain broader based strength.

EUR/USD, after peaking at 1.1091, saw lows below 1.1050. Sep Eurozone production was slightly weaker than expected, falling 0.6% and EU forecasts for growth were cut for both 2019 and 2020.

USD/JPY pushed up 50 pips on the Chinese announcement, extending to near 109.50 after Bloomberg reported a US official confirming the story, before a late correction as Reuters reported some internal US opposition to a deal.

Commodity currencies benefited from trade optimism, AUD/USD in particular, moving above .69 on both the Chinese announcement and the apparent US confirmation, with a modest dip back below in between. EUR/NOK pushed well below 10.10 helped by stronger than expected Norwegian production.

The Bank of England MPC split 7-2 in favor of no change in rates, with Haskel and Saunders voting for a cut due to a deteriorating labor market. GBP fell as markets increased their pricing for a 2020 cut, but GBP/USD held support at 1.28 and a EUR/GBP bounce above .8650 was brief.

Asia FX and News:

Michael Bloomberg is preparing to enter the Democratic presidential race. - NYT

China's exports decreased 0.9% in dollar terms in October from a year earlier, while imports dropped by 6.4%. That left a trade surplus of $42.81 billion for the month. - BBG

Fed Bostic says he would probably have dissented against an interest-rate cut at the last meeting of the central bank's policy-setting committee in favor of keeping rates on hold.

RBA reinforced that the economy has emerged from its soft patch, while forecasting no acceleration in wage growth and core inflation barely reaching the bottom of its target in its quarterly update of the economic outlook. - BBG

Japan's household spending in September up by 9.5% y/y.

Japanese PM Abe called for stimulus measures to support the economy as it recovers from typhoon destruction and takes the strain from an October sales tax hike.

AUD/USD was the only big mover in Asia on Friday as it slipped to 0.6876 lows from 0.6900 following RBA's statement of monetary policy highlighting poor wage growth trends. Concerns regarding roll-back of tariffs also remained after some reported US opposition overnight despite some assurance from a White House aide in the morning. USD/JPY was a notch lower at 109.25 from 109.41 earlier. Cable still supported above 1.2800 while EUR/USD pivoted around 1.1050. USD/CAD modestly higher to 1.3187 from 1.3172 on oil price drop.

Nikkei and JGBs:

Nikkei +0.09%, JGB 10yr yield at -0.055%

Data:

23:30 GMT - JP: Household spending (Sep) 9.5% y/y (Mkt: 7.0 Prev: 1.0)

23:30 GMT - JP: Labor Cash Earnings (Sep) 0.8% y/y (Mkt: 0.1 Prev: -0.1)

00:30 GMT - AU: Home Loans (Sep) 3.6% m/m (Mkt: 1 Prev: 2.0R)

05:00 GMT - JP: Leading Indicator (Sep P) 92.2 (Mkt: 92.2 Prev: 91.9)

05:30 GMT - NL: Manufacturing Production (Sep) 1.7% m/m (Prev: 0.5R)

05:30 GMT - NL: Manufacturing Production (Sep) 1.2% y/y (Prev: -1.3R)

Still To Be Released -

06:45 GMT - CH: Unemployment (sa) (Oct) % (Mkt: 2.3 Prev: 2.3)

07:00 GMT - DE: Trade Balance (Sep) EUR bn (Mkt: 19.5 Prev: 16.4)

07:00 GMT - DE: Current Account (nsa) (Sep) EUR bn (Mkt: 19.1 Prev: 16.9)

07:45 GMT - FR: Manufacturing Production (Sep) % m/m (Mkt: 0.2 Prev: -0.8)

07:45 GMT - FR: Manufacturing Production (Sep) % y/y (Mkt: 0.1 Prev: -1.6)

07:45 GMT - FR: Trade Balance (Sep) EUR bn (Mkt: -4964 Prev: -5019)

07:45 GMT - FR: Current Account Balance (Sep) EUR bn (Prev: -2.5)

10:00 GMT - GR: HICP (Oct) % y/y (Prev: 0.2)

13:15 GMT - CA: Housing Starts (Oct) 4cast: 235k (Mkt: 220 Prev: 221.2)

13:30 GMT - CA: Unemployment (Oct) 4cast: 5.5% (Mkt: 5.5 Prev: 5.5)

13:30 GMT - CA: Employment (Oct) 4cast: 10 k (Mkt: 15 Prev: 53.7)

13:30 GMT - CA: Building permits (Sep) % m/m (Mkt: -2 Prev: 6.1)

15:00 GMT - US: Univ of Mich Sentiment (Nov P) (Mkt: 95 Prev: 95.5)

15:00 GMT - US: Wholesale Inventories (Sep F) % m/m (Mkt: -0.3 Prev: -0.3)

Events

00:00 GMT - EU: Ecofin

00:00 GMT - UK: UK sovereign debt to be rated by Moody's

00:10 GMT - US: Fed's Bostic speaks in New York on monetary policy

00:30 GMT - AU: RBA Statement on Monetary Policy

16:45 GMT - US: Fed's Daly speaks on climate change

18:30 GMT - CA: BoC's Beaudry speaks


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