Forex - Asia Open - Overnight Highlights

 23:39 (GMT) 10 Sep

  [Forex Highlights]

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Asia Overnight Highlights - 11 Sept 2019


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

FX Highlights:

The Bloomberg dollar spot index saw modest gains overnight on Tuesday after falling initially against the EUR. A fall in the US job openings for a second straight month underpinned.

USD/JPY edged a touch lower before picking up on a report that China would buy more US agricultural products, though the response to the story was modest, though rising UST yields helped the pair reach 107.60.

GBP/USD led the moves in EUR/USD. The causes of early volatility were unclear, but the stronger than expected earnings data provided support.

SEK and NOK both weakened after softer than expected CPI data reversing recent gains. Swedish CPIF rose 1.3% y/y in August, below the 1.5% expected, while Norwegian core CPI rose 2.1% y/y, below the 2.2% expected.

Canadian housing starts and building permits were both slightly on the strong side of expectations in August, helping CAD gains. USD/CAD reached a low of 1.3129 while AUD/CAD found sellers around 0.9050.

Data/Events Highlights:

- US NFIB small business optimism fell to 103.1 from 104.7 vs 103.5 exp.

- US Jul job openings fell to 7217k from 7248k vs 7331k exp.

- UK average earnings rose 4% y/y including bonuses in the 3 months to July, the largest rise since 2010. But other aspects of the data were less strong, with employment growth slowing and vacancies weakening.

- French industrial production was slightly weaker than expected, rising 0.3% in July. Italian production was also weaker, falling 0.7% m/m.

- VIX index: 15.20 (-0.46%)

- Gold Spot: $1,487.43/oz (+0.11%)

- ICE Brent front contract: $62.38 ($-0.21)

- Nymex WTI front contract: $57.84 (+$0.44)

- Reuters/Jefferies Commodities Index: 174.94 (+0.36%)

- 10y UST: 1.732% (+9bp) (Asia morning)

- DJI: 26,909.43 (+0.28%); S&P: 2,979.39 (+0.03%); Nasdaq: 8,084.16 (-0.04%)

Data/Events Ahead:

US inflation data starts to come in focus. August PPI is due today.


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

FX Highlights:

Majority of the Asian currencies were in the green against the dollar. MYR (+0.19%) led the gains and CNY and CNH were up 0.13% and 0.12% respectively against the dollar amid talks of China deal to buy American agricultural goods. PHP was down 0.23% against the greenback due to a wider trade deficit in July, followed by IDR which fell 0.11%.

USD/CNH saw slips towards the 7.1000 handle on Tuesday amid reports of China's deal to buy agricultural products from the US. Pair however returned to trade around 7.1100+ levels in the NY session amid a firmer US dollar. If 7.1000 psychological support is broken, watch 7.0845 technical support. USD/CNY onshore spot also traded to fresh lows of 7.0980 on Tuesday before closing at 7.1130. We watch for a firmer break below 7.1000 as a key psychological support for USD/CNY. 1Y NDFs likewise fell to 7.1605 lows on Tuesday but rebounded to trade around 7.1700 handle in NY session.

USD/SGD pivoted around the 1.3800 handle on Tuesday, gaining to 1.3813 earlier in the day but sliding to 1.3788 lows subsequently - a level where it has stalled for the last 3 days. If the 1.3777 support is broken, we will turn our attention to the 1.3744 support.

USD/IDR 1M NDFs picked up some traction to trade around 14100 overnight on Tuesday as the USD firmed up on jobs report and prospect of a China deal. Onshore spot traded to fresh MTD lows of 14028 on Tuesday but firmed up slightly to 14050 into the close. Strong support at 14025 should contain the slide in the pair and return to 14100+ levels remains likely on any reports of trade talks delay.

USD/INR 1M NDFs traded higher to 72.200+ levels earlier on Tuesday, printing highs at 72.350. Onshore markets remained closed on Tuesday or a local holiday. The downside below 72 remains shallow amid domestic headwinds. We do not see any risk to the 71.375 support.

Data/Events Highlights:

China's inflation remains elevated at 2.8% y/y in August, unchanged from July. PPI dipped further to -0.8% y/y in August from -0.3% prior.

Philippines' exports eked out modest gains of 3.5% y/y in July, and imports saw smaller declines of 4.2% y/y in July. That translated into a wider trade deficit of USD3393mn in July.

Data/Events Ahead:

Malaysia's July industrial production is on watch on Wednesday after few months of upbeat readings.


04:00 GMT / 12:00 SGT - MY: Industrial Production (Jul) 4cast: 3.5% y/y [Mkt: 3.1, Prev: 3.9]

12:30 GMT / 20:30 SGT - US: PPI (Aug) 4cast: 0% m/m [Mkt: 0, Prev: 0.2]

12:30 GMT / 20:30 SGT - US: PPI (ex Food & Energy) (Aug) 4cast: 0.2% m/m [Mkt: 0.2, Prev: -0.1]

14:00 GMT / 22:00 SGT - US: Wholesale Inventories (Jul F) [Mkt: 0.2, Prev: 0.2]

23:01 GMT / 07:01 SGT - UK: RICS Housing Survey (Aug) [Mkt: -10, Prev: -9]

23:50 GMT / 07:50 SGT - JP: PPI (Aug) [Mkt: -0.2, Prev: 0]

23:50 GMT / 07:50 SGT - JP: PPI (Aug) [Mkt: -0.2, Prev: -0.6]

23:50 GMT / 07:50 SGT - JP: Core Machine orders (Jul) 4cast: -2.5% y/y [Mkt: -9, Prev: 12.5]u


03:35 GMT / 11:35 SGT - JP: 5yr Bonds Auction

17:00 GMT / 01:00 SGT - US: 10yr Notes Auction (USD 24bln)u

Forex - India Flows: Rupee gains further despite higher oil

 05:09 (GMT) 09 Sep

 [Forex Flows]

USD/INR onshore spot traded with an offered tone at the start of the new week, slipping to fresh MTD lows of 71.530 in early trading from previous close of 71.720. A downbeat NFP print on Friday weighed on the dollar, and further China stimulus measures are supporting Asian currencies this morning. Meanwhile, hopes of further fiscal stimulus from FinMin Sitaraman kept the rupee in gains despite higher oil prices. Support at 71.375 is coming into view, break of which will open the doors for further correction to the 71 handle. 1M NDFs saw a rebound to 72+ levels earlier in the day, but were last seen back below the big figure. SENSEX in modest gains of over 0.3% at last check.

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