Forex - Asia Close Highlights


 08:47 (GMT) 09 Nov

  [Forex Highlights]

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Asia Close Highlights (0101-FVVJ-C01)

09 November 2018

Regional Backdrop:

The week's gains were erased for most Asian currencies after the FOMC meeting saw to a strengthened dollar. The biggest losses came from Asia's largest economies: CNY (-1.76%), CNH (-1.46%) and INR (-1.32%). Continued monetary policy accommodation in Malaysia, South Korea and Thailand left MYR (-0.74%), KRW (-0.63%) exposed while SGD (-0.18%) was relatively sheltered by recent policy tightening from MAS. TWD almost back to square one, with no overall change throughout the week and HKD (0.29%) managed to steal some gains. Central bank meetings in Indonesia and Philippines are due in the week ahead, and uncertainty over monetary policy tightening benefited PHP (1.20%) and IDR (1.78%).

This week, USD/CNH halted the upside momentum at the start, but the bias started to creep in again towards the end. Pair started being range bound at around the 6.9100-6.9200 handle, last up to 6.9424. USD/CNY was in a bid tone during the week as PBOC fixings came within 1 big figure of our forecasted numbers. Pair last elevated close to the 6.9500 handle.

USD/SGD consolidated on the downside throughout most of the week until the FOMC meeting brought bulls back into the fray. Pair has broken the 1.3772 resistance and is now exposed to further gains. Key drivers in the week ahead include Singapore's retail sales and non-oil domestic exports numbers due Monday and Friday respectively, as well as US CPI due Wednesday.

USD/IDR onshore spot was seen with a steady downside bias in the week, as the USD momentum faded with the US midterm election results signalling difficulties for President Trump. Pair dropped from near-15000 levels at the start of the week to near 3-month lows of 14473 on Thursday before the upbeat FOMC turned the course slightly by reaffirming expectations for a Fed rate hike in December. Pair was last seen approaching 14700, but possibly kept below through intervention.

USD/INR onshore spot had a short trading week due to the 2-day Deepavali holidays in the week. Pair traded close to the 73 handle at the start of the week as the banking sector worries continued amid the RBI-government spat. Pair caught up on Friday with a lip to 72.6550 but remained in consolidation until last check.

Market Psychology

USD/CNH - Crossing the 6.9303 resistance points towards further momentum upward, next psychological resistance at 6.9500, and then 6.9803. We look to the 6.9500 handle near-term as a key psychological resistance level.

USD/SGD - Expect a test of the 1.3800 figure, although any break above is likely to be short lived.

USD/IDR - Eyes are on the Bank Indonesia decision due in the week ahead. Upside is likely to remain limited with resistance now at 14770/800 area in the meanwhile, but a delay in rate hikes could mean a return towards 15000.

USD/INR - October CPI will be key in the week ahead, although focus remains on the government-RBI banter, which will continue to keep rupee gains in check for now. Eyes remain on the 73 handle, which possibly remains guarded.


Forex - Asia Open - Overnight Highlights


 00:00 (GMT) 07 Nov

 [Forex Highlights]

Asia Overnight Highlights - 07 November 2018

Jiaxin Lu, Ken Loong Hoe

ASIA OUTLOOK

A quiet day was seen awaiting the US midterm election results. The GBP saw some volatility on Brexit headlines, ending firmer.

Majors FX Highlights

FX market sits tight, awaiting for the results of the midterms to roll in. EUR/USD trading around 1.1420. USD/JPY a shade below 113.50, which was tested overnight as yen slips with higher equities. Cable at 1.31, broke the 100dma resistance on Tuesday as chances of a Brexit deal improves. Kiwi jumped higher on a very solid labour report which saw unemployment rate unexpectedly falls to a 10-year low to 3.9%, against expectations of 4.4% in the third quarter. NZD/USD up 70 pips and steady around 0.6730/40. AUD weighed by gains in NZD. AUD/NZD fell out of the 1.08 handle and settles just below 1.075.

Majors Data Highlights

US Sep job openings -284k to 7.009m vs 7.085m exp, but data is still near all-time high. NZ GDT price auction recorded a 2% decline in price. Canadian building permits for Sep increases 0.4%, vs exp. +0.3%. New Zealand unemployment rate for Q3 unexpectedly fell to 3.9% from 4.4%. Employment change for Q3 recorded 2.8% gain y/y from 2.0%y/y. Participation rate also increased, while private wages remains unchanged. Average hourly earnings came in at 1.4%, better than the expected 0.8%.

Swiss reserves are expected to back up evidence from the weekly sight deposit data that recent CHF weakness has not been down to the SNB. RBNZ is expected to hold the Official Cash Rate (OCR) at 1.75percent at its November 8 meeting. The next projected rate hike is still a long way ahead, where we are marking it in Q2 2020.The upcoming meeting will include the release of the Monetary Policy Statement, where we expect few tweaks in the RBNZ economic outlook and projections with risk of upgrades especially after the strong jobs report.

Emerging Asia FX Highlights

USD/Asians were a mixed bag overnight. USD/CNY: 1Y NDFs were almost flat at around 6.9800. PBoC fixed mid-point at 6.9075 vs. previous close of 6.9262. USD/SGD: Pair traded within a narrow range between 1.3740/55 on low volume during Asian session on Tuesday as the Singapore market was closed for holiday. The pair, however, dipped lower to 1.3730 in NY session. USD/IDR: 1M NDFs traded below the 15000 mark, and slipped to 14850 at last look. USD/INR: 1M NDFs traded with a modest bid tone to 73.3000 in NY hours on Tuesday.

Emerging Asia Data Highlights

Philippines inflation remained elevated, beating consensus and our expectations with a 6.7% y/y rise. This remains supported by high food and transport inflation. However a stabilising on m/m inflation shows that inflation may peak soon. In Taiwan, inflation eased more than expected to 1.17% y/y in October from 1.72% prior.

A thin data calendar is seen in the day ahead, with only Taiwan and Philippines trade data due.

OVERNIGHT NEWS HIGHLIGHTS

- US Sep job openings -284k to 7.009m vs 7.085m exp.

- VIX index: 19.91 (-0.25%)

- Gold Spot: $1,227.51/oz (+0.03%)

- ICE Brent front contract: $72.13 ($-1.04)

- Nymex WTI front contract: $61.83 ($-0.38)

- Reuters/Jefferies Commodities Index: 191.21 (-0.71%)

- 10y UST: 3.228% (+3bp) (Asia morning)

- DJI: 25,635.01 (+0.68%); S&P: 2,755.45 (+0.63%); Nasdaq: 7,375.96 (+0.64%)

ASIA NEWS

China: PBOC to Create Equity Finance Tool, Expand Bond Financing Tool. - BBG

India: Indian Metal Tariffs Violate International Trade Rules, WTO Says. - BBG

Indonesia: Watch Indonesian Consumer Stocks, Retailers After Sales Data. - BBG

CURRENCIES

FX markets generally just marked time through Tuesday, light calendars and the US mid-term elections reason enough not to get too involved.

GBP again provided the main interest in Europe, better bid again to start with on hopes of Brexit progress, tripped up late morning as a DUP MP said it 'looks like we are heading for no deal', then back up again as Brexit Minister Raab gave a thumbs up as he left a meeting at the Treasury! Cable has been down to 1.3020 and back up to test 1.3100, though the EUR/GBP low limited to .8711 with UK importers likely poised at .8695, 1.1500 in GBP/EUR terms.

Ranges on hold elsewhere, EUR/USD eased to around 1.1400 in early Europe despite better than expected German orders data, while the German service PMI also rescued a set of generally softer final numbers that saw Italy's service PMI slip to 49.2. We then saw a high at 1.1438 in N.American trade before slipping back to keep 1.1350/1.1450 very much intact.

USD/JPY is also contained by 112.50/113.50, though tested the upper limit helped by equities staging something of a rally after the US open.

The CHF shows no obvious sign of safe haven interest despite the uncertainty surrounding the US vote, EUR/CHF sticking tight to 1.1450.

USD/CAD edged marginally higher while EUR/CAD touched above 1.50 and AUD/CAD tested .9500 with Crude still heavy. AUD and NZD continue in tight formation, NZD not troubled by a 2% fall in the GDT dairy index at the latest auction.

BONDS

USTs slowed to a near halt ahead of the mid-term results as traders sat on their hands. Despite the approach to 10yr supply and the attempt by equities to trade a little firmer, yields remained tightly capped, still with some better long end support showing for bonds. Supply got a solid reception. 2s +1.6bps @ 2.92%, 5s +1.7bps @ 3.05%, 10s +1.0bps @ 3.21%, 30s -0.4bps @ 3.42%.

Agency Spreads: Freddie/Fannie 5s -0.1/-0.3 bps, 10s -0.1/+0.8 bps.

Swap Spreads: 2s -0.61bps, 5s -0.70bps, 10s -0.45bps.

EQUITIES

Equities saw early gains, comments from China bringing some optimism on trade and lifting industrials in particular. A correction from was seen in the afternoon but the indices picked up again into the close.

ASIA CURRENCIES

USD/CNY: 1Y NDFs were almost flat at around 6.9800. PBoC fixed mid-point at 6.9075 vs. previous close of 6.9262. USD/CNY seen relatively stable at 6.9186. USD/CNY is likely to trade within the 6.8700-6.9300 range at the near term.

USD/CNH: the pair traded with a mild bid tone overnight, and was last seen at 6.9230.Focus should turn to China trade and CPI data out later this week. We see the pair trading between the 6.8514-6.9303 range for now, where a move beyond will signal directional motives.

USD/SGD: Pair traded within a narrow range between 1.3740/55 on low volume during Asian session on Tuesday as the Singapore market was closed for holiday. The pair, however, dipped lower to 1.3730 in NY session. We expect short-term consolidation between 1.3703-1.3774.

USD/IDR: 1M NDFs traded below the 15000 mark, and slipped to 14850 at last look. The onshore spot gapped lower to open at 14950 on Tuesday vs. last close of 14975, and traded with an offered tone on Tuesday, last at 14800. We see the 15000 resistance holding for now.

USD/INR: 1M NDFs traded with a modest bid tone to 73.3000 in NY hours on Tuesday. USD/INR gapped lower on Tuesday ahead of Diwali festival, and traded on either side of 73.000.
Eyes remain on the 73 handle, and only break below strong 72.38 support will likely weaken the upside momentum.

DATA RELEASES DUE TODAY

- 01:00 GMT - PH: Exports (Sep) [Mkt: 4.5, Prev: 3.1]

- 01:00 GMT - PH: Imports (Sep) [Mkt: 18.1, Prev: 11]

- 01:00 GMT - PH: Trade Balance (Sep) [Mkt: -3100, Prev: -3513]

- 05:00 GMT - JP: Leading indicator (Sep P) [Mkt: 103.9, Prev: 104.5]

- 08:00 GMT - TW: Exports (Oct) 4cast:3 % y/y [Mkt: 8, Prev: 2.6]

- 08:00 GMT - TW: Imports (Oct) 4cast:6 % y/y [Mkt: 12.6, Prev: 13.9]

- 08:00 GMT - TW: Trade Balance (Oct) 4cast:4.8 USD bn [Mkt: 4.2, Prev: 4.33]

- 08:30 GMT - UK: Halifax House Price Index (Oct) [Mkt: 1.3, Prev: 2.5]

- 08:30 GMT - UK: Halifax House Price Index (Oct) [Mkt: 0.8, Prev: -1.4]

- 10:00 GMT - EU: Retail Sales (Sep) [Mkt: 0.1, Prev: -0.2]

- 10:00 GMT - EU: Retail Sales (Sep) [Mkt: 0.9, Prev: 1.8]

- 15:00 GMT - CA: Ivey PMI (Oct) [Prev: 50.4]

- 20:00 GMT - US: Consumer Credit (Sep) [Mkt: 15, Prev: 20.078]

- 20:00 GMT - NZ: RBNZ Cash Rate Target (43412) [Mkt: 1.75, Prev: 1.75]

- 23:50 GMT - JP: Bank Lending Data (Ex trusts) (Oct) [Prev: 2.3]

- 23:50 GMT - JP: Key Machinery Orders (9th-12th) (Sep) [Mkt: 7.7, Prev: 12.6]

- 23:50 GMT - JP: Key Machinery Orders (9th-12th) (Sep) [Mkt: -9, Prev: 6.8]

EVENTS & AUCTIONS

- US: FOMC Starts its Two-Day Meeting

- IN: Market Holiday - Diwali

- 01:30 GMT - JP: BoJ's Funo Speaks in Tokyo

- 20:00 GMT - NZ: RBNZ OCR Decision and MPS

- 20:45 GMT - NZ: RBNZ's Orr at Parliament Select Committee on Banking

- 23:50 GMT - JP: BoJ Summary of Opinions


Forex - Asia Open - Overnight Highlights


 00:00 (GMT) 07 Nov

 [Forex Highlights]

Asia Overnight Highlights - 07 November 2018

Jiaxin Lu, Ken Loong Hoe

ASIA OUTLOOK

A quiet day was seen awaiting the US midterm election results. The GBP saw some volatility on Brexit headlines, ending firmer.

Majors FX Highlights

FX market sits tight, awaiting for the results of the midterms to roll in. EUR/USD trading around 1.1420. USD/JPY a shade below 113.50, which was tested overnight as yen slips with higher equities. Cable at 1.31, broke the 100dma resistance on Tuesday as chances of a Brexit deal improves. Kiwi jumped higher on a very solid labour report which saw unemployment rate unexpectedly falls to a 10-year low to 3.9%, against expectations of 4.4% in the third quarter. NZD/USD up 70 pips and steady around 0.6730/40. AUD weighed by gains in NZD. AUD/NZD fell out of the 1.08 handle and settles just below 1.075.

Majors Data Highlights

US Sep job openings -284k to 7.009m vs 7.085m exp, but data is still near all-time high. NZ GDT price auction recorded a 2% decline in price. Canadian building permits for Sep increases 0.4%, vs exp. +0.3%. New Zealand unemployment rate for Q3 unexpectedly fell to 3.9% from 4.4%. Employment change for Q3 recorded 2.8% gain y/y from 2.0%y/y. Participation rate also increased, while private wages remains unchanged. Average hourly earnings came in at 1.4%, better than the expected 0.8%.

Swiss reserves are expected to back up evidence from the weekly sight deposit data that recent CHF weakness has not been down to the SNB. RBNZ is expected to hold the Official Cash Rate (OCR) at 1.75percent at its November 8 meeting. The next projected rate hike is still a long way ahead, where we are marking it in Q2 2020.The upcoming meeting will include the release of the Monetary Policy Statement, where we expect few tweaks in the RBNZ economic outlook and projections with risk of upgrades especially after the strong jobs report.

Emerging Asia FX Highlights

USD/Asians were a mixed bag overnight. USD/CNY: 1Y NDFs were almost flat at around 6.9800. PBoC fixed mid-point at 6.9075 vs. previous close of 6.9262. USD/SGD: Pair traded within a narrow range between 1.3740/55 on low volume during Asian session on Tuesday as the Singapore market was closed for holiday. The pair, however, dipped lower to 1.3730 in NY session. USD/IDR: 1M NDFs traded below the 15000 mark, and slipped to 14850 at last look. USD/INR: 1M NDFs traded with a modest bid tone to 73.3000 in NY hours on Tuesday.

Emerging Asia Data Highlights

Philippines inflation remained elevated, beating consensus and our expectations with a 6.7% y/y rise. This remains supported by high food and transport inflation. However a stabilising on m/m inflation shows that inflation may peak soon. In Taiwan, inflation eased more than expected to 1.17% y/y in October from 1.72% prior.

A thin data calendar is seen in the day ahead, with only Taiwan and Philippines trade data due.

OVERNIGHT NEWS HIGHLIGHTS

- US Sep job openings -284k to 7.009m vs 7.085m exp.

- VIX index: 19.91 (-0.25%)

- Gold Spot: $1,227.51/oz (+0.03%)

- ICE Brent front contract: $72.13 ($-1.04)

- Nymex WTI front contract: $61.83 ($-0.38)

- Reuters/Jefferies Commodities Index: 191.21 (-0.71%)

- 10y UST: 3.228% (+3bp) (Asia morning)

- DJI: 25,635.01 (+0.68%); S&P: 2,755.45 (+0.63%); Nasdaq: 7,375.96 (+0.64%)

ASIA NEWS

China: PBOC to Create Equity Finance Tool, Expand Bond Financing Tool. - BBG

India: Indian Metal Tariffs Violate International Trade Rules, WTO Says. - BBG

Indonesia: Watch Indonesian Consumer Stocks, Retailers After Sales Data. - BBG

CURRENCIES

FX markets generally just marked time through Tuesday, light calendars and the US mid-term elections reason enough not to get too involved.

GBP again provided the main interest in Europe, better bid again to start with on hopes of Brexit progress, tripped up late morning as a DUP MP said it 'looks like we are heading for no deal', then back up again as Brexit Minister Raab gave a thumbs up as he left a meeting at the Treasury! Cable has been down to 1.3020 and back up to test 1.3100, though the EUR/GBP low limited to .8711 with UK importers likely poised at .8695, 1.1500 in GBP/EUR terms.

Ranges on hold elsewhere, EUR/USD eased to around 1.1400 in early Europe despite better than expected German orders data, while the German service PMI also rescued a set of generally softer final numbers that saw Italy's service PMI slip to 49.2. We then saw a high at 1.1438 in N.American trade before slipping back to keep 1.1350/1.1450 very much intact.

USD/JPY is also contained by 112.50/113.50, though tested the upper limit helped by equities staging something of a rally after the US open.

The CHF shows no obvious sign of safe haven interest despite the uncertainty surrounding the US vote, EUR/CHF sticking tight to 1.1450.

USD/CAD edged marginally higher while EUR/CAD touched above 1.50 and AUD/CAD tested .9500 with Crude still heavy. AUD and NZD continue in tight formation, NZD not troubled by a 2% fall in the GDT dairy index at the latest auction.

BONDS

USTs slowed to a near halt ahead of the mid-term results as traders sat on their hands. Despite the approach to 10yr supply and the attempt by equities to trade a little firmer, yields remained tightly capped, still with some better long end support showing for bonds. Supply got a solid reception. 2s +1.6bps @ 2.92%, 5s +1.7bps @ 3.05%, 10s +1.0bps @ 3.21%, 30s -0.4bps @ 3.42%.

Agency Spreads: Freddie/Fannie 5s -0.1/-0.3 bps, 10s -0.1/+0.8 bps.

Swap Spreads: 2s -0.61bps, 5s -0.70bps, 10s -0.45bps.

EQUITIES

Equities saw early gains, comments from China bringing some optimism on trade and lifting industrials in particular. A correction from was seen in the afternoon but the indices picked up again into the close.

ASIA CURRENCIES

USD/CNY: 1Y NDFs were almost flat at around 6.9800. PBoC fixed mid-point at 6.9075 vs. previous close of 6.9262. USD/CNY seen relatively stable at 6.9186. USD/CNY is likely to trade within the 6.8700-6.9300 range at the near term.

USD/CNH: the pair traded with a mild bid tone overnight, and was last seen at 6.9230.Focus should turn to China trade and CPI data out later this week. We see the pair trading between the 6.8514-6.9303 range for now, where a move beyond will signal directional motives.

USD/SGD: Pair traded within a narrow range between 1.3740/55 on low volume during Asian session on Tuesday as the Singapore market was closed for holiday. The pair, however, dipped lower to 1.3730 in NY session. We expect short-term consolidation between 1.3703-1.3774.

USD/IDR: 1M NDFs traded below the 15000 mark, and slipped to 14850 at last look. The onshore spot gapped lower to open at 14950 on Tuesday vs. last close of 14975, and traded with an offered tone on Tuesday, last at 14800. We see the 15000 resistance holding for now.

USD/INR: 1M NDFs traded with a modest bid tone to 73.3000 in NY hours on Tuesday. USD/INR gapped lower on Tuesday ahead of Diwali festival, and traded on either side of 73.000.
Eyes remain on the 73 handle, and only break below strong 72.38 support will likely weaken the upside momentum.

DATA RELEASES DUE TODAY

- 01:00 GMT - PH: Exports (Sep) [Mkt: 4.5, Prev: 3.1]

- 01:00 GMT - PH: Imports (Sep) [Mkt: 18.1, Prev: 11]

- 01:00 GMT - PH: Trade Balance (Sep) [Mkt: -3100, Prev: -3513]

- 05:00 GMT - JP: Leading indicator (Sep P) [Mkt: 103.9, Prev: 104.5]

- 08:00 GMT - TW: Exports (Oct) 4cast:3 % y/y [Mkt: 8, Prev: 2.6]

- 08:00 GMT - TW: Imports (Oct) 4cast:6 % y/y [Mkt: 12.6, Prev: 13.9]

- 08:00 GMT - TW: Trade Balance (Oct) 4cast:4.8 USD bn [Mkt: 4.2, Prev: 4.33]

- 08:30 GMT - UK: Halifax House Price Index (Oct) [Mkt: 1.3, Prev: 2.5]

- 08:30 GMT - UK: Halifax House Price Index (Oct) [Mkt: 0.8, Prev: -1.4]

- 10:00 GMT - EU: Retail Sales (Sep) [Mkt: 0.1, Prev: -0.2]

- 10:00 GMT - EU: Retail Sales (Sep) [Mkt: 0.9, Prev: 1.8]

- 15:00 GMT - CA: Ivey PMI (Oct) [Prev: 50.4]

- 20:00 GMT - US: Consumer Credit (Sep) [Mkt: 15, Prev: 20.078]

- 20:00 GMT - NZ: RBNZ Cash Rate Target (43412) [Mkt: 1.75, Prev: 1.75]

- 23:50 GMT - JP: Bank Lending Data (Ex trusts) (Oct) [Prev: 2.3]

- 23:50 GMT - JP: Key Machinery Orders (9th-12th) (Sep) [Mkt: 7.7, Prev: 12.6]

- 23:50 GMT - JP: Key Machinery Orders (9th-12th) (Sep) [Mkt: -9, Prev: 6.8]

EVENTS & AUCTIONS

- US: FOMC Starts its Two-Day Meeting

- IN: Market Holiday - Diwali

- 01:30 GMT - JP: BoJ's Funo Speaks in Tokyo

- 20:00 GMT - NZ: RBNZ OCR Decision and MPS

- 20:45 GMT - NZ: RBNZ's Orr at Parliament Select Committee on Banking

- 23:50 GMT - JP: BoJ Summary of Opinions


Forex - Asia Open - Overnight Highlights


 00:00 (GMT) 07 Nov

 [Forex Highlights]

Asia Overnight Highlights - 07 November 2018

Jiaxin Lu, Ken Loong Hoe

ASIA OUTLOOK

A quiet day was seen awaiting the US midterm election results. The GBP saw some volatility on Brexit headlines, ending firmer.

Majors FX Highlights

FX market sits tight, awaiting for the results of the midterms to roll in. EUR/USD trading around 1.1420. USD/JPY a shade below 113.50, which was tested overnight as yen slips with higher equities. Cable at 1.31, broke the 100dma resistance on Tuesday as chances of a Brexit deal improves. Kiwi jumped higher on a very solid labour report which saw unemployment rate unexpectedly falls to a 10-year low to 3.9%, against expectations of 4.4% in the third quarter. NZD/USD up 70 pips and steady around 0.6730/40. AUD weighed by gains in NZD. AUD/NZD fell out of the 1.08 handle and settles just below 1.075.

Majors Data Highlights

US Sep job openings -284k to 7.009m vs 7.085m exp, but data is still near all-time high. NZ GDT price auction recorded a 2% decline in price. Canadian building permits for Sep increases 0.4%, vs exp. +0.3%. New Zealand unemployment rate for Q3 unexpectedly fell to 3.9% from 4.4%. Employment change for Q3 recorded 2.8% gain y/y from 2.0%y/y. Participation rate also increased, while private wages remains unchanged. Average hourly earnings came in at 1.4%, better than the expected 0.8%.

Swiss reserves are expected to back up evidence from the weekly sight deposit data that recent CHF weakness has not been down to the SNB. RBNZ is expected to hold the Official Cash Rate (OCR) at 1.75percent at its November 8 meeting. The next projected rate hike is still a long way ahead, where we are marking it in Q2 2020.The upcoming meeting will include the release of the Monetary Policy Statement, where we expect few tweaks in the RBNZ economic outlook and projections with risk of upgrades especially after the strong jobs report.

Emerging Asia FX Highlights

USD/Asians were a mixed bag overnight. USD/CNY: 1Y NDFs were almost flat at around 6.9800. PBoC fixed mid-point at 6.9075 vs. previous close of 6.9262. USD/SGD: Pair traded within a narrow range between 1.3740/55 on low volume during Asian session on Tuesday as the Singapore market was closed for holiday. The pair, however, dipped lower to 1.3730 in NY session. USD/IDR: 1M NDFs traded below the 15000 mark, and slipped to 14850 at last look. USD/INR: 1M NDFs traded with a modest bid tone to 73.3000 in NY hours on Tuesday.

Emerging Asia Data Highlights

Philippines inflation remained elevated, beating consensus and our expectations with a 6.7% y/y rise. This remains supported by high food and transport inflation. However a stabilising on m/m inflation shows that inflation may peak soon. In Taiwan, inflation eased more than expected to 1.17% y/y in October from 1.72% prior.

A thin data calendar is seen in the day ahead, with only Taiwan and Philippines trade data due.

OVERNIGHT NEWS HIGHLIGHTS

- US Sep job openings -284k to 7.009m vs 7.085m exp.

- VIX index: 19.91 (-0.25%)

- Gold Spot: $1,227.51/oz (+0.03%)

- ICE Brent front contract: $72.13 ($-1.04)

- Nymex WTI front contract: $61.83 ($-0.38)

- Reuters/Jefferies Commodities Index: 191.21 (-0.71%)

- 10y UST: 3.228% (+3bp) (Asia morning)

- DJI: 25,635.01 (+0.68%); S&P: 2,755.45 (+0.63%); Nasdaq: 7,375.96 (+0.64%)

ASIA NEWS

China: PBOC to Create Equity Finance Tool, Expand Bond Financing Tool. - BBG

India: Indian Metal Tariffs Violate International Trade Rules, WTO Says. - BBG

Indonesia: Watch Indonesian Consumer Stocks, Retailers After Sales Data. - BBG

CURRENCIES

FX markets generally just marked time through Tuesday, light calendars and the US mid-term elections reason enough not to get too involved.

GBP again provided the main interest in Europe, better bid again to start with on hopes of Brexit progress, tripped up late morning as a DUP MP said it 'looks like we are heading for no deal', then back up again as Brexit Minister Raab gave a thumbs up as he left a meeting at the Treasury! Cable has been down to 1.3020 and back up to test 1.3100, though the EUR/GBP low limited to .8711 with UK importers likely poised at .8695, 1.1500 in GBP/EUR terms.

Ranges on hold elsewhere, EUR/USD eased to around 1.1400 in early Europe despite better than expected German orders data, while the German service PMI also rescued a set of generally softer final numbers that saw Italy's service PMI slip to 49.2. We then saw a high at 1.1438 in N.American trade before slipping back to keep 1.1350/1.1450 very much intact.

USD/JPY is also contained by 112.50/113.50, though tested the upper limit helped by equities staging something of a rally after the US open.

The CHF shows no obvious sign of safe haven interest despite the uncertainty surrounding the US vote, EUR/CHF sticking tight to 1.1450.

USD/CAD edged marginally higher while EUR/CAD touched above 1.50 and AUD/CAD tested .9500 with Crude still heavy. AUD and NZD continue in tight formation, NZD not troubled by a 2% fall in the GDT dairy index at the latest auction.

BONDS

USTs slowed to a near halt ahead of the mid-term results as traders sat on their hands. Despite the approach to 10yr supply and the attempt by equities to trade a little firmer, yields remained tightly capped, still with some better long end support showing for bonds. Supply got a solid reception. 2s +1.6bps @ 2.92%, 5s +1.7bps @ 3.05%, 10s +1.0bps @ 3.21%, 30s -0.4bps @ 3.42%.

Agency Spreads: Freddie/Fannie 5s -0.1/-0.3 bps, 10s -0.1/+0.8 bps.

Swap Spreads: 2s -0.61bps, 5s -0.70bps, 10s -0.45bps.

EQUITIES

Equities saw early gains, comments from China bringing some optimism on trade and lifting industrials in particular. A correction from was seen in the afternoon but the indices picked up again into the close.

ASIA CURRENCIES

USD/CNY: 1Y NDFs were almost flat at around 6.9800. PBoC fixed mid-point at 6.9075 vs. previous close of 6.9262. USD/CNY seen relatively stable at 6.9186. USD/CNY is likely to trade within the 6.8700-6.9300 range at the near term.

USD/CNH: the pair traded with a mild bid tone overnight, and was last seen at 6.9230.Focus should turn to China trade and CPI data out later this week. We see the pair trading between the 6.8514-6.9303 range for now, where a move beyond will signal directional motives.

USD/SGD: Pair traded within a narrow range between 1.3740/55 on low volume during Asian session on Tuesday as the Singapore market was closed for holiday. The pair, however, dipped lower to 1.3730 in NY session. We expect short-term consolidation between 1.3703-1.3774.

USD/IDR: 1M NDFs traded below the 15000 mark, and slipped to 14850 at last look. The onshore spot gapped lower to open at 14950 on Tuesday vs. last close of 14975, and traded with an offered tone on Tuesday, last at 14800. We see the 15000 resistance holding for now.

USD/INR: 1M NDFs traded with a modest bid tone to 73.3000 in NY hours on Tuesday. USD/INR gapped lower on Tuesday ahead of Diwali festival, and traded on either side of 73.000.
Eyes remain on the 73 handle, and only break below strong 72.38 support will likely weaken the upside momentum.

DATA RELEASES DUE TODAY

- 01:00 GMT - PH: Exports (Sep) [Mkt: 4.5, Prev: 3.1]

- 01:00 GMT - PH: Imports (Sep) [Mkt: 18.1, Prev: 11]

- 01:00 GMT - PH: Trade Balance (Sep) [Mkt: -3100, Prev: -3513]

- 05:00 GMT - JP: Leading indicator (Sep P) [Mkt: 103.9, Prev: 104.5]

- 08:00 GMT - TW: Exports (Oct) 4cast:3 % y/y [Mkt: 8, Prev: 2.6]

- 08:00 GMT - TW: Imports (Oct) 4cast:6 % y/y [Mkt: 12.6, Prev: 13.9]

- 08:00 GMT - TW: Trade Balance (Oct) 4cast:4.8 USD bn [Mkt: 4.2, Prev: 4.33]

- 08:30 GMT - UK: Halifax House Price Index (Oct) [Mkt: 1.3, Prev: 2.5]

- 08:30 GMT - UK: Halifax House Price Index (Oct) [Mkt: 0.8, Prev: -1.4]

- 10:00 GMT - EU: Retail Sales (Sep) [Mkt: 0.1, Prev: -0.2]

- 10:00 GMT - EU: Retail Sales (Sep) [Mkt: 0.9, Prev: 1.8]

- 15:00 GMT - CA: Ivey PMI (Oct) [Prev: 50.4]

- 20:00 GMT - US: Consumer Credit (Sep) [Mkt: 15, Prev: 20.078]

- 20:00 GMT - NZ: RBNZ Cash Rate Target (43412) [Mkt: 1.75, Prev: 1.75]

- 23:50 GMT - JP: Bank Lending Data (Ex trusts) (Oct) [Prev: 2.3]

- 23:50 GMT - JP: Key Machinery Orders (9th-12th) (Sep) [Mkt: 7.7, Prev: 12.6]

- 23:50 GMT - JP: Key Machinery Orders (9th-12th) (Sep) [Mkt: -9, Prev: 6.8]

EVENTS & AUCTIONS

- US: FOMC Starts its Two-Day Meeting

- IN: Market Holiday - Diwali

- 01:30 GMT - JP: BoJ's Funo Speaks in Tokyo

- 20:00 GMT - NZ: RBNZ OCR Decision and MPS

- 20:45 GMT - NZ: RBNZ's Orr at Parliament Select Committee on Banking

- 23:50 GMT - JP: BoJ Summary of Opinions


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