Forex - Asia Open - Overnight Highlights


 23:54 (GMT) 25 Aug

  [Forex Highlights]

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Asia Overnight Highlights - 26 Aug 2019

MAJORS

FX Highlights:

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

The Bloomberg dollar spot index traded heavily in Friday's after Powell's comments as he highlighted global risks and said the Fed would act as appropriate - seen as code for locking in a September cut.

China announced retaliatory tariffs on U.S. products and Trump announced further retaliatory measures to that, escalating trade war concerns. Risk aversion saw a pick up in early Asian hours as a result. There were further erratic remarks over the weekend.

USD/JPY slid below 105 to YTD lows of 104.46. AUD/JPY was sold off to lows of 69.967 in early Asian hours this morning.

EUR/USD rose to 1.1140+ levels on USD weakness. GBP saw some mild correction to the euro after Thursday's recovery, as markets remained unconvinced that Johnson's meetings with Merkel and Macron changed anything substantive on the Brexit issue. Anti-EU MPs also created some doubt that any deal would get through the House of Commons by indicating that a removal of the backstop would not be enough to convince them to vote for a deal.

Data/Events Highlights:

- China announces retaliatory tariffs of $75 billion worth of U.S. goods to take effect on Sept 1 and Dec 15

- Trump vows to respond to China's tariff retaliation. Adds we don't need China and frankly would be far better off without them'. US companies ordered to find alternatives to China including bringing companies home

- Powell - economy in a favourable place close to Fed goals. 3 weeks since the last meeting have been 'eventful' with new tariffs, more evidence of global slowdown and geopolitical risks like hard Brexit

- Fed's Bullard: -50bp will be robustly debated in Sep; inverted yield curve, global slowdown, moving inflation to target faster cited as reasons to ease

- Fed's Mester - would say leaves rates were are, but very attuned to downside risks

- Fed's Kaplan - do not see this as a rate cutting cycle. Monetary policy not causing slowdown, yield curve
- US Jul New Home Sales 635k from sharply upward revised 728k

- UK's Johnson - deal not going to be a cinch, people 'shouldn't hold their breath'.

- VIX index: 19.87 (+19.12%)

- Gold Spot: $1,546.77/oz (+1.30%)

- ICE Brent front contract: $58.46 ($-0.88)

- Nymex WTI front contract: $53.16 ($-1.01)

- Reuters/Jefferies Commodities Index: 168.61 (-1.00%)

- 10y UST: 1.535% (-8bp) (Asia morning)

- DJI: 25,628.90 (-2.37%); S&P: 2,847.11 (-2.59%); Nasdaq: 7,751.77 (-3.00%)

Data/Events Ahead:

In the U.S., we expect a 1.5% increase in Jul durable goods orders but a 0.2% decline ex transport.

In Germany, we envisage some consolidation in the headline and component parts of the Ifo survey in the upcoming August numbers. Indeed, the headline is seen rising 0.3 point to 96.0, this making little inroad into the 1.8-point slump witnessed in July, that being the largest in a four-month run of declines that pulled the overall figure to the lowest since 2014.

EMERGING ASIA

FX Highlights:

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

Asian currencies posted mixed performances on Friday. CNH (-0.59%) led the losses by a wide margin on escalation of trade war late into Friday, while KRW (-0.27%), CNY (-0.17%) and SGD (-0.11%) also remained weak. THB (+0.27%), INR (+0.21%) and IDR (+0.14%) were however seen in gains against the USD.

USD/CNH rose to fresh highs at 7.1926 earlier on Monday after closing the NY session at 7.1315 on Trump's retaliatory measures in the trade war. Eyes now on the psychological 7.2000. USD/CNY closed Friday near record highs of 7.0992 and will likely surge further to 7.1500+ levels at the open on Monday. 1Y NDFs broke above 7.2000 into the close on Friday and extended gains to 7.2512 early this morning.

USD/SGD remained resilient on Friday despite US/China escalations, closing the NY session at 1.3868 but surged early this morning to 1.3900+ handle printing over 2-year highs of 1.3925. Break of key 1.3900 handle brings our attention to 1.3950 but we wait for further trade announcements.

USD/IDR 1M NDFs saw gains to 14350+ in Friday's NY session following Trump's actions on China spelling a bout of risk aversion. Onshore spot traded heavily on Friday, slipping towards 14200 from 14240-levels earlier in the day. Pair may target the 14360 resistance in the week ahead as risk aversion jumps on trade war escalation.

USD/INR 1M NDFs defied market trends to move downwards on Friday to sub-72 levels as FinMin announced a slew of measures to support the economy. Onshore spot printed YTD highs of 72.0475 earlier on Friday but retreated lower to 71.700-levels as reports of fiscal measures started coming in. Upside bias is likely to be intact given tough external conditions, but a break of 72.050 resistance is needed to put the focus on 72.200.

Data/Events Highlights:

Singapore's inflation came in below expectations, at 0.4% y/y in July from 0.6% in June. This was weighed down by core inflation which was only 0.8% y/y.

Data/Events Ahead:

Singapore's July industrial production is expected to remain in negative territory.

HK's July trade balance is also due.

DATA RELEASES DUE TODAY

05:00 GMT / 13:00 SGT - JP: Leading Indicator (June F) [Prev: 93.3]

05:00 GMT / 13:00 SGT - SG: Industrial Production (sa) (Jul) [Mkt: -2.8, Prev: 1.2]

05:00 GMT / 13:00 SGT - SG: Industrial Production (Jul) 4cast: -4.4 % y/y [Mkt: -5.6, Prev: -6.9]

08:30 GMT / 16:30 SGT - HK: Imports (Jul) [Prev: -7.5]

08:30 GMT / 16:30 SGT - HK: Exports (Jul) [Prev: -9]

08:30 GMT / 16:30 SGT - HK: Trade Balance (Jul) [Prev: -55.2]

12:30 GMT / 20:30 SGT - US: Durable Ex Transportation (Jul P) 4cast: -0.2 [Mkt: 0.1, Prev: 1]

12:30 GMT / 20:30 SGT - US: Durable Goods Orders (Jul P) 4cast: 1.5 [Mkt: 1.1, Prev: 1.9]

EVENTS & AUCTIONS

No key events scheduled


Forex - Philippines Flows: USD/PHP still in consolidation ahead of Jackson Hole


 02:52 (GMT) 23 Aug

 [Forex Flows]

USD/PHP traded in a tight range between 52.300 -52.400 at last look. Peso eked out modest gains of 0.2% against dollar during the week. Markets are on the sidelines ahead of Jackson Hole symposium and Fed Chairman Powell's speech on Friday. The pair is seen in consolidation between support at 52.070 and resistance at 52.450 for now, waiting for catalysts. 1M NDFs were steady at 52.400 at last look. PSEi extended drop, down by 1.15% at last look.


Forex - China Flows: CNH still looking to weaken, even as PBOC fixing signals at currency support


 02:18 (GMT) 22 Aug

 [Forex Flows] [Central Banks]

USD/CNH has continued on a bid tone since the NY session. This is despite Fed minutes arguing for aggressive easing. Pair was last up to 7.0729. 7.1124 resistance is still far although possible to reach in the coming days. A move below 7.0411 support may result in some profit taking.

PBoC fixed mid-point at 7.0490 vs. previous close of 7.0633. This still signalled at some support for currency despite higher than previous days. USD/CNY gapped higher and stayed elevated, last at 7.0673. Attention is now at psychological 7.1000 big figure resistance given recent trends. 1Y NDF last at 7.1396.


Forex - Asia Open - Overnight Highlights


 00:00 (GMT) 20 Aug

 [Forex Highlights]

Asia Overnight Highlights - 20 Aug 2019

MAJORS
The USD was net little changed through the European morning, but there was some cross movement, with the EUR making gains against the JPY and GBP initially although GBP was later back to flat too. Some euro support at least still lingering from German government statement last week indicating a willingness to increase Budget spending in the case of a recession. Slight late dollar lift from Rosengren comments however, although nothing new from this current hawk. JPY weakness looks based on a generally better risk tone with equities up and yields up helped by hopes of stimulus from China and Germany. Initial GBP weakness had no clear trigger but after a strong recovery in the second half of last week, the lack of progress from opposition parties in preventing a no-deal Brexit has reduced optimism.

Data Overnight:
Eurozone CPI was slightly weaker than expected in July, up 1.0% y/y against a market expectation of a 1.1% rise. The current account was also below expectations, at EUR18.4bn in June, down from 30.2bn in May.

Data Ahead:
RBA minutes of August policy meeting due, in which RBA stayed pat. In Canada, we expect a 2.0% decline in Jun manufacturing shipments.

- VIX index: 16.88 (-8.61%)

- Gold Spot: $1,495.69/oz (-0.02%)

- ICE Brent front contract: $59.74 (+$1.10)

- Nymex WTI front contract: $56.11 ($-0.10)

- Reuters/Jefferies Commodities Index: 170.78 (+0.22%)

- 10y UST: 1.606% (+5bp) (Asia morning)

- DJI: 26,135.79 (+0.96%); S&P: 2,923.65 (+1.21%); Nasdaq: 8,002.81 (+1.35%)

EMERGING ASIA

FX Highlights:

A mixed day for Asian currencies, and sentiment continued to be driven by trade headlines. The U.S. decision to extend temporary sales permit to Huawei for 90 days provided some relief, and next deadline will be Nov 19. President Trump continued to urge a 100 basis point rate cut by the Fed.
USD/CNH reached a high of 7.0768 overnight and further gains were capped. Pair was seen steady at around 7.0700 into early Asian hours on Tuesday. Upside pressure eased slightly on Huawei-induced trade optimism, eyes on 7.0000 level. USD/CNY traded with a modest upside bias on Monday. We think that a break of the 7.0000-7.0500 range will likely trigger further movements either way. 1Y NDFs consolidated at 7.1350.

USD/SGD pushed to a high of 1.3870 overnight and was last seen holding onto the gains into Asian hours on Tuesday. Pair may edge lower and eye the 1.3833 support next. If broken, will turn our attention to the 1.3806 support.

USD/IDR rebounded to 14240 after some sideway movements at 14200 earlier. We expect the pair to continue to be range bound ahead of key catalysts this week, the FOMC meeting minutes on Wednesday and BI decision on Thursday. Consensus is now split between a rate cut and an unchanged rate by BI. A rate cut by BI may see the pair may test further upside at 14360. 1M NDFs still held onto overnight gains, and were last seen 14350.

USD/INR traded with a bid tone on Monday. Rupee was slightly stronger on the open amid an improved risk tone from the seemingly more conciliatory tone on the US-China trade battle, but soon reversed gains. Pair closed at 71.4425. The pair is likely to consolidate on the 71 handle, with risk sentiment likely the key driver. 1M NDFs were steady at 72.000 handle as Asian session started.

Data/Events Highlights:

Hong Kong's unemployment rate edged up to 2.9% in July from 2.8% prior, while composite interest rate was at 0.94% in July, down from 0.95% prior.
Thailand's economy has slowed down as expected in Q2. GDP expanded by only 2.3% y/y in the second quarter, the lowest level since 2014. Trade tensions and strong Thai Baht have hit the country's exports, weighing down growth.

Data/Events Ahead:

A quiet data calendar in Asia in the day ahead, with only July Hong Kong composite CPI due.

DATA RELEASES DUE TODAY

- 08:30 GMT / 16:30 SGT - HK: CPI (Jul) [Mkt: 3, Prev: 3.3]

- 12:30 GMT / 20:30 SGT - CA: Manufacturing sales (Jun) 4cast:-2 % m/m [Mkt: -1.5, Prev: 1.6]

EVENTS & AUCTIONS

03:35 GMT / 11:35 SGT - JP: 20yr Bonds Auction

09:30 GMT / 17:30 SGT - EU: ECB Main Refinancing Operation Result

09:30 GMT / 17:30 SGT - UK: 2028 0.125% Index Linked Treasury Gilt

12:30 GMT / 20:30 SGT - US: Philly Fed issues nonmanufacturing business outlook survey for August


Forex - Asia Open - Overnight Highlights


 00:00 (GMT) 20 Aug

 [Forex Highlights]

Asia Overnight Highlights - 20 Aug 2019

MAJORS
The USD was net little changed through the European morning, but there was some cross movement, with the EUR making gains against the JPY and GBP initially although GBP was later back to flat too. Some euro support at least still lingering from German government statement last week indicating a willingness to increase Budget spending in the case of a recession. Slight late dollar lift from Rosengren comments however, although nothing new from this current hawk. JPY weakness looks based on a generally better risk tone with equities up and yields up helped by hopes of stimulus from China and Germany. Initial GBP weakness had no clear trigger but after a strong recovery in the second half of last week, the lack of progress from opposition parties in preventing a no-deal Brexit has reduced optimism.

Data Overnight:
Eurozone CPI was slightly weaker than expected in July, up 1.0% y/y against a market expectation of a 1.1% rise. The current account was also below expectations, at EUR18.4bn in June, down from 30.2bn in May.

Data Ahead:
RBA minutes of August policy meeting due, in which RBA stayed pat. In Canada, we expect a 2.0% decline in Jun manufacturing shipments.

- VIX index: 16.88 (-8.61%)

- Gold Spot: $1,495.69/oz (-0.02%)

- ICE Brent front contract: $59.74 (+$1.10)

- Nymex WTI front contract: $56.11 ($-0.10)

- Reuters/Jefferies Commodities Index: 170.78 (+0.22%)

- 10y UST: 1.606% (+5bp) (Asia morning)

- DJI: 26,135.79 (+0.96%); S&P: 2,923.65 (+1.21%); Nasdaq: 8,002.81 (+1.35%)

EMERGING ASIA

FX Highlights:

A mixed day for Asian currencies, and sentiment continued to be driven by trade headlines. The U.S. decision to extend temporary sales permit to Huawei for 90 days provided some relief, and next deadline will be Nov 19. President Trump continued to urge a 100 basis point rate cut by the Fed.
USD/CNH reached a high of 7.0768 overnight and further gains were capped. Pair was seen steady at around 7.0700 into early Asian hours on Tuesday. Upside pressure eased slightly on Huawei-induced trade optimism, eyes on 7.0000 level. USD/CNY traded with a modest upside bias on Monday. We think that a break of the 7.0000-7.0500 range will likely trigger further movements either way. 1Y NDFs consolidated at 7.1350.

USD/SGD pushed to a high of 1.3870 overnight and was last seen holding onto the gains into Asian hours on Tuesday. Pair may edge lower and eye the 1.3833 support next. If broken, will turn our attention to the 1.3806 support.

USD/IDR rebounded to 14240 after some sideway movements at 14200 earlier. We expect the pair to continue to be range bound ahead of key catalysts this week, the FOMC meeting minutes on Wednesday and BI decision on Thursday. Consensus is now split between a rate cut and an unchanged rate by BI. A rate cut by BI may see the pair may test further upside at 14360. 1M NDFs still held onto overnight gains, and were last seen 14350.

USD/INR traded with a bid tone on Monday. Rupee was slightly stronger on the open amid an improved risk tone from the seemingly more conciliatory tone on the US-China trade battle, but soon reversed gains. Pair closed at 71.4425. The pair is likely to consolidate on the 71 handle, with risk sentiment likely the key driver. 1M NDFs were steady at 72.000 handle as Asian session started.

Data/Events Highlights:

Hong Kong's unemployment rate edged up to 2.9% in July from 2.8% prior, while composite interest rate was at 0.94% in July, down from 0.95% prior.
Thailand's economy has slowed down as expected in Q2. GDP expanded by only 2.3% y/y in the second quarter, the lowest level since 2014. Trade tensions and strong Thai Baht have hit the country's exports, weighing down growth.

Data/Events Ahead:

A quiet data calendar in Asia in the day ahead, with only July Hong Kong composite CPI due.

DATA RELEASES DUE TODAY

- 08:30 GMT / 16:30 SGT - HK: CPI (Jul) [Mkt: 3, Prev: 3.3]

- 12:30 GMT / 20:30 SGT - CA: Manufacturing sales (Jun) 4cast:-2 % m/m [Mkt: -1.5, Prev: 1.6]

EVENTS & AUCTIONS

03:35 GMT / 11:35 SGT - JP: 20yr Bonds Auction

09:30 GMT / 17:30 SGT - EU: ECB Main Refinancing Operation Result

09:30 GMT / 17:30 SGT - UK: 2028 0.125% Index Linked Treasury Gilt

12:30 GMT / 20:30 SGT - US: Philly Fed issues nonmanufacturing business outlook survey for August


Forex - Asia Open - Overnight Highlights


 00:00 (GMT) 20 Aug

 [Forex Highlights]

Asia Overnight Highlights - 20 Aug 2019

MAJORS
The USD was net little changed through the European morning, but there was some cross movement, with the EUR making gains against the JPY and GBP initially although GBP was later back to flat too. Some euro support at least still lingering from German government statement last week indicating a willingness to increase Budget spending in the case of a recession. Slight late dollar lift from Rosengren comments however, although nothing new from this current hawk. JPY weakness looks based on a generally better risk tone with equities up and yields up helped by hopes of stimulus from China and Germany. Initial GBP weakness had no clear trigger but after a strong recovery in the second half of last week, the lack of progress from opposition parties in preventing a no-deal Brexit has reduced optimism.

Data Overnight:
Eurozone CPI was slightly weaker than expected in July, up 1.0% y/y against a market expectation of a 1.1% rise. The current account was also below expectations, at EUR18.4bn in June, down from 30.2bn in May.

Data Ahead:
RBA minutes of August policy meeting due, in which RBA stayed pat. In Canada, we expect a 2.0% decline in Jun manufacturing shipments.

- VIX index: 16.88 (-8.61%)

- Gold Spot: $1,495.69/oz (-0.02%)

- ICE Brent front contract: $59.74 (+$1.10)

- Nymex WTI front contract: $56.11 ($-0.10)

- Reuters/Jefferies Commodities Index: 170.78 (+0.22%)

- 10y UST: 1.606% (+5bp) (Asia morning)

- DJI: 26,135.79 (+0.96%); S&P: 2,923.65 (+1.21%); Nasdaq: 8,002.81 (+1.35%)

EMERGING ASIA

FX Highlights:

A mixed day for Asian currencies, and sentiment continued to be driven by trade headlines. The U.S. decision to extend temporary sales permit to Huawei for 90 days provided some relief, and next deadline will be Nov 19. President Trump continued to urge a 100 basis point rate cut by the Fed.
USD/CNH reached a high of 7.0768 overnight and further gains were capped. Pair was seen steady at around 7.0700 into early Asian hours on Tuesday. Upside pressure eased slightly on Huawei-induced trade optimism, eyes on 7.0000 level. USD/CNY traded with a modest upside bias on Monday. We think that a break of the 7.0000-7.0500 range will likely trigger further movements either way. 1Y NDFs consolidated at 7.1350.

USD/SGD pushed to a high of 1.3870 overnight and was last seen holding onto the gains into Asian hours on Tuesday. Pair may edge lower and eye the 1.3833 support next. If broken, will turn our attention to the 1.3806 support.

USD/IDR rebounded to 14240 after some sideway movements at 14200 earlier. We expect the pair to continue to be range bound ahead of key catalysts this week, the FOMC meeting minutes on Wednesday and BI decision on Thursday. Consensus is now split between a rate cut and an unchanged rate by BI. A rate cut by BI may see the pair may test further upside at 14360. 1M NDFs still held onto overnight gains, and were last seen 14350.

USD/INR traded with a bid tone on Monday. Rupee was slightly stronger on the open amid an improved risk tone from the seemingly more conciliatory tone on the US-China trade battle, but soon reversed gains. Pair closed at 71.4425. The pair is likely to consolidate on the 71 handle, with risk sentiment likely the key driver. 1M NDFs were steady at 72.000 handle as Asian session started.

Data/Events Highlights:

Hong Kong's unemployment rate edged up to 2.9% in July from 2.8% prior, while composite interest rate was at 0.94% in July, down from 0.95% prior.
Thailand's economy has slowed down as expected in Q2. GDP expanded by only 2.3% y/y in the second quarter, the lowest level since 2014. Trade tensions and strong Thai Baht have hit the country's exports, weighing down growth.

Data/Events Ahead:

A quiet data calendar in Asia in the day ahead, with only July Hong Kong composite CPI due.

DATA RELEASES DUE TODAY

- 08:30 GMT / 16:30 SGT - HK: CPI (Jul) [Mkt: 3, Prev: 3.3]

- 12:30 GMT / 20:30 SGT - CA: Manufacturing sales (Jun) 4cast:-2 % m/m [Mkt: -1.5, Prev: 1.6]

EVENTS & AUCTIONS

03:35 GMT / 11:35 SGT - JP: 20yr Bonds Auction

09:30 GMT / 17:30 SGT - EU: ECB Main Refinancing Operation Result

09:30 GMT / 17:30 SGT - UK: 2028 0.125% Index Linked Treasury Gilt

12:30 GMT / 20:30 SGT - US: Philly Fed issues nonmanufacturing business outlook survey for August


Forex - Asia Open - Overnight Highlights


 00:00 (GMT) 20 Aug

 [Forex Highlights]

Asia Overnight Highlights - 20 Aug 2019

MAJORS
The USD was net little changed through the European morning, but there was some cross movement, with the EUR making gains against the JPY and GBP initially although GBP was later back to flat too. Some euro support at least still lingering from German government statement last week indicating a willingness to increase Budget spending in the case of a recession. Slight late dollar lift from Rosengren comments however, although nothing new from this current hawk. JPY weakness looks based on a generally better risk tone with equities up and yields up helped by hopes of stimulus from China and Germany. Initial GBP weakness had no clear trigger but after a strong recovery in the second half of last week, the lack of progress from opposition parties in preventing a no-deal Brexit has reduced optimism.

Data Overnight:
Eurozone CPI was slightly weaker than expected in July, up 1.0% y/y against a market expectation of a 1.1% rise. The current account was also below expectations, at EUR18.4bn in June, down from 30.2bn in May.

Data Ahead:
RBA minutes of August policy meeting due, in which RBA stayed pat. In Canada, we expect a 2.0% decline in Jun manufacturing shipments.

- VIX index: 16.88 (-8.61%)

- Gold Spot: $1,495.69/oz (-0.02%)

- ICE Brent front contract: $59.74 (+$1.10)

- Nymex WTI front contract: $56.11 ($-0.10)

- Reuters/Jefferies Commodities Index: 170.78 (+0.22%)

- 10y UST: 1.606% (+5bp) (Asia morning)

- DJI: 26,135.79 (+0.96%); S&P: 2,923.65 (+1.21%); Nasdaq: 8,002.81 (+1.35%)

EMERGING ASIA

FX Highlights:

A mixed day for Asian currencies, and sentiment continued to be driven by trade headlines. The U.S. decision to extend temporary sales permit to Huawei for 90 days provided some relief, and next deadline will be Nov 19. President Trump continued to urge a 100 basis point rate cut by the Fed.
USD/CNH reached a high of 7.0768 overnight and further gains were capped. Pair was seen steady at around 7.0700 into early Asian hours on Tuesday. Upside pressure eased slightly on Huawei-induced trade optimism, eyes on 7.0000 level. USD/CNY traded with a modest upside bias on Monday. We think that a break of the 7.0000-7.0500 range will likely trigger further movements either way. 1Y NDFs consolidated at 7.1350.

USD/SGD pushed to a high of 1.3870 overnight and was last seen holding onto the gains into Asian hours on Tuesday. Pair may edge lower and eye the 1.3833 support next. If broken, will turn our attention to the 1.3806 support.

USD/IDR rebounded to 14240 after some sideway movements at 14200 earlier. We expect the pair to continue to be range bound ahead of key catalysts this week, the FOMC meeting minutes on Wednesday and BI decision on Thursday. Consensus is now split between a rate cut and an unchanged rate by BI. A rate cut by BI may see the pair may test further upside at 14360. 1M NDFs still held onto overnight gains, and were last seen 14350.

USD/INR traded with a bid tone on Monday. Rupee was slightly stronger on the open amid an improved risk tone from the seemingly more conciliatory tone on the US-China trade battle, but soon reversed gains. Pair closed at 71.4425. The pair is likely to consolidate on the 71 handle, with risk sentiment likely the key driver. 1M NDFs were steady at 72.000 handle as Asian session started.

Data/Events Highlights:

Hong Kong's unemployment rate edged up to 2.9% in July from 2.8% prior, while composite interest rate was at 0.94% in July, down from 0.95% prior.
Thailand's economy has slowed down as expected in Q2. GDP expanded by only 2.3% y/y in the second quarter, the lowest level since 2014. Trade tensions and strong Thai Baht have hit the country's exports, weighing down growth.

Data/Events Ahead:

A quiet data calendar in Asia in the day ahead, with only July Hong Kong composite CPI due.

DATA RELEASES DUE TODAY

- 08:30 GMT / 16:30 SGT - HK: CPI (Jul) [Mkt: 3, Prev: 3.3]

- 12:30 GMT / 20:30 SGT - CA: Manufacturing sales (Jun) 4cast:-2 % m/m [Mkt: -1.5, Prev: 1.6]

EVENTS & AUCTIONS

03:35 GMT / 11:35 SGT - JP: 20yr Bonds Auction

09:30 GMT / 17:30 SGT - EU: ECB Main Refinancing Operation Result

09:30 GMT / 17:30 SGT - UK: 2028 0.125% Index Linked Treasury Gilt

12:30 GMT / 20:30 SGT - US: Philly Fed issues nonmanufacturing business outlook survey for August


Forex - Asia Open - Overnight Highlights


 00:00 (GMT) 20 Aug

 [Forex Highlights]

Asia Overnight Highlights - 20 Aug 2019

MAJORS
The USD was net little changed through the European morning, but there was some cross movement, with the EUR making gains against the JPY and GBP initially although GBP was later back to flat too. Some euro support at least still lingering from German government statement last week indicating a willingness to increase Budget spending in the case of a recession. Slight late dollar lift from Rosengren comments however, although nothing new from this current hawk. JPY weakness looks based on a generally better risk tone with equities up and yields up helped by hopes of stimulus from China and Germany. Initial GBP weakness had no clear trigger but after a strong recovery in the second half of last week, the lack of progress from opposition parties in preventing a no-deal Brexit has reduced optimism.

Data Overnight:
Eurozone CPI was slightly weaker than expected in July, up 1.0% y/y against a market expectation of a 1.1% rise. The current account was also below expectations, at EUR18.4bn in June, down from 30.2bn in May.

Data Ahead:
RBA minutes of August policy meeting due, in which RBA stayed pat. In Canada, we expect a 2.0% decline in Jun manufacturing shipments.

- VIX index: 16.88 (-8.61%)

- Gold Spot: $1,495.69/oz (-0.02%)

- ICE Brent front contract: $59.74 (+$1.10)

- Nymex WTI front contract: $56.11 ($-0.10)

- Reuters/Jefferies Commodities Index: 170.78 (+0.22%)

- 10y UST: 1.606% (+5bp) (Asia morning)

- DJI: 26,135.79 (+0.96%); S&P: 2,923.65 (+1.21%); Nasdaq: 8,002.81 (+1.35%)

EMERGING ASIA

FX Highlights:

A mixed day for Asian currencies, and sentiment continued to be driven by trade headlines. The U.S. decision to extend temporary sales permit to Huawei for 90 days provided some relief, and next deadline will be Nov 19. President Trump continued to urge a 100 basis point rate cut by the Fed.
USD/CNH reached a high of 7.0768 overnight and further gains were capped. Pair was seen steady at around 7.0700 into early Asian hours on Tuesday. Upside pressure eased slightly on Huawei-induced trade optimism, eyes on 7.0000 level. USD/CNY traded with a modest upside bias on Monday. We think that a break of the 7.0000-7.0500 range will likely trigger further movements either way. 1Y NDFs consolidated at 7.1350.

USD/SGD pushed to a high of 1.3870 overnight and was last seen holding onto the gains into Asian hours on Tuesday. Pair may edge lower and eye the 1.3833 support next. If broken, will turn our attention to the 1.3806 support.

USD/IDR rebounded to 14240 after some sideway movements at 14200 earlier. We expect the pair to continue to be range bound ahead of key catalysts this week, the FOMC meeting minutes on Wednesday and BI decision on Thursday. Consensus is now split between a rate cut and an unchanged rate by BI. A rate cut by BI may see the pair may test further upside at 14360. 1M NDFs still held onto overnight gains, and were last seen 14350.

USD/INR traded with a bid tone on Monday. Rupee was slightly stronger on the open amid an improved risk tone from the seemingly more conciliatory tone on the US-China trade battle, but soon reversed gains. Pair closed at 71.4425. The pair is likely to consolidate on the 71 handle, with risk sentiment likely the key driver. 1M NDFs were steady at 72.000 handle as Asian session started.

Data/Events Highlights:

Hong Kong's unemployment rate edged up to 2.9% in July from 2.8% prior, while composite interest rate was at 0.94% in July, down from 0.95% prior.
Thailand's economy has slowed down as expected in Q2. GDP expanded by only 2.3% y/y in the second quarter, the lowest level since 2014. Trade tensions and strong Thai Baht have hit the country's exports, weighing down growth.

Data/Events Ahead:

A quiet data calendar in Asia in the day ahead, with only July Hong Kong composite CPI due.

DATA RELEASES DUE TODAY

- 08:30 GMT / 16:30 SGT - HK: CPI (Jul) [Mkt: 3, Prev: 3.3]

- 12:30 GMT / 20:30 SGT - CA: Manufacturing sales (Jun) 4cast:-2 % m/m [Mkt: -1.5, Prev: 1.6]

EVENTS & AUCTIONS

03:35 GMT / 11:35 SGT - JP: 20yr Bonds Auction

09:30 GMT / 17:30 SGT - EU: ECB Main Refinancing Operation Result

09:30 GMT / 17:30 SGT - UK: 2028 0.125% Index Linked Treasury Gilt

12:30 GMT / 20:30 SGT - US: Philly Fed issues nonmanufacturing business outlook survey for August


Forex - Asia Open - Overnight Highlights


 00:05 (GMT) 19 Aug

 [Forex Highlights]

Asia Overnight Highlights - 19 Aug 2019

MAJORS

The USD made modest gains through the European morning, picking up ground against the EUR and JPY while falling slightly against the GBP, while commodity currencies also made modest gains in a more risk positive market, the CAD extending its move in North America. USD/JPY could not clear 106.50 however.

Risk appetite was supported in Asia by some comments from China's state planner indicating it will roll out a plan to support consumption, and in the European afternoon by a report Der Speigel that Germany would allow the budget to go into deficit in the event of a recession. This saw EUR/USD rise back to around 1.11 but the impact was modest, with no imminent action to prevent recession implied. GBP gains probably owed more to short covering than news, although there was some increase in hopes that a "no deal" Brexit could be blocked as opposition parties continued to discuss potential methods.
Data Overnight:

Aug's preliminary Michigan CSI of 92.1 is down more sharply than expected from Jul's 98.4, the dip looking similar to that in Jan which followed steeper equity declines in Dec of 2018. Jul US housing starts fell 4.0% to1191k, contrasting an 8.8% increase in permits to 1336k.
Data Ahead:
On Monday, the balance of payment data is likely to show a softening in June. Final inflation estimates are also released, with flash estimates pointing at headline inflation declining to 1.1% y/y in July from 1.3% in June and core inflation also easing by a similar degree from 1.1% in June to 0.9% in July.

- VIX index: 18.47 (-12.80%)

- Gold Spot: $1,510.00/oz (-0.22%)

- ICE Brent front contract: $58.90 (+$0.26)

- Nymex WTI front contract: $55.09 (+$0.22)

- Reuters/Jefferies Commodities Index: 170.41 (+0.22%)

- 10y UST: 1.554% (+3bp) (Asia morning)

- DJI: 25,886.01 (+1.20%); S&P: 2,888.68 (+1.44%); Nasdaq: 7,895.99 (+1.67%)

EMERGING ASIA

FX Highlights:

Majority of the Asian currencies were in the red against the dollar throughout the week, as risk-off sentiments remained strong after the Treasury bond markets sent a recession signal. Risk off sentiments are likely to remain strong on Monday, as Trump indicates that a trade deal is still not yet imminent. He added that the Hong Kong protests posed difficulty to a resolution between U.S. and China due to concerns by U.S. lawmakers. In addition, as the temporary 90-day reprieve to allow U.S. companies to do businesses with Huawei expires on 19 August, all eyes will be on the U.S. on its next move. Trump continued to label Huawei as a "national security threat" and signaled that the U.S. might not have any business dealings with Huawei at all. Focus for the week, will be on the FOMC minutes on 21 August.

USD/CNH was relatively stable around 7.0500 on Friday. China's data was weak in July, with industrial production and retail sales below market expectations. USD/CNH will likely test the 7.0615 resistance at some stage. Support is at 6.9932. USD/CNY traded in a tight range as well on Friday, between 7.0350 and 7.0464. For USD/CNY, it has since moved on a bid tone, last at 7.0420. We think that a break of the 7.0000-7.0500 range will likely trigger further movements either way. A 7.0700 resistance is key to further upsides. 1Y NDF dipped to 7.1043 at last look.

USD/SGD slipped from just below the 1.3900 big figure on Friday to around 1.3840. We expect risk off sentiments to remain strong. Pair may re-eye the 1.3907 high again. If broken, will turn our attention to the 1.3915 resistance next. Singapore's Prime Minister Lee Hsien Loong acknowledged in his National Day Rally address that Singapore's economic growth had slowed significantly this year, however, stated that there was no need for economic stimulus measures at the moment. Retirement and re-employment ages would gradually be raised by 2030.

USD/IDR dipped lower on Friday to 14220. Focus for the week will be on Bank Indonesia (BI) policy rate decision, and consensus is now split between a rate cut or an unchanged rate. Global headwinds seem to be escalating and we expect BI to cut the 7 Day Reverse Repo Rate again to 5.50% to provide support to the economy. A rate cut may see the pair test further upside at 14360. 1M NDFs dipped to an intra-day low at 14265, before rising to just below 14300 at last look.

USD/INR slipped lower from 71.47 to 71.04 on Friday, before recovering some of the losses towards the end of the session to 71.15. USD/INR should continue to be supported by general risk aversion, geopolitical tension and RBI easing expectations, upside is likelier than a fall back below 71. 1M NDFs dipped lower to 71.42 at last look.

Data/Events Highlights:

Malaysia's GDP unexpectedly grew much faster in Q2 (4.9% y/y) compared to Q1 (4.5%). In our view, currency weakness, alongside domestic fundamentals, partially helped with the performance. Exports of goods and services grew 0.1% y/y, while imports fell 2.1%. This helped Malaysia with some net export contribution to GDP growth. Singapore's Non-oil Domestic Exports (NODX) and electronics exports data were stronger than expected but remained in sharp contraction in July, at -11.2% y/y and -24.2% y/y respectively. Recent trends may prompt the Monetary Authority of Singapore (MAS) to ease policy settings. We continue to monitor currently-fluid trends before committing to an easing call for October.

Data/Events Ahead:

Hong Kong Monetary Authority (HKMA)'s Composite Interest Rate will be released on Monday. Thailand's Q2 GDP will be released on Monday as well and we expect a slip to 2.4% y/y in Q2 from 2.8% y/y in Q1. This will be followed by Hong Kong's unemployment rate for July.

DATA RELEASES DUE TODAY

- 23:01 GMT / 07:01 SGT - UK: Rightmove House Price Index (Aug) [Prev: -0.2]

- 23:50 GMT / 07:50 SGT - JP: Imports (Jul) 4cast:-3.9 % y/y [Mkt: -2.3, Prev: -5.2]

- 23:50 GMT / 07:50 SGT - JP: Exports (Jul) 4cast:-3.1 % y/y [Mkt: -2.3, Prev: -6.6]

- 23:50 GMT / 07:50 SGT - JP: Trade Balance (nsa) (Jul) 4cast:-164 JPY bn [Mkt: -210, Prev: 589.6]

- 23:50 GMT / 07:50 SGT - JP: Trade Balance (sa) (Jul) [Mkt: -241.3, Prev: -14.4]

- 02:30 GMT / 10:30 SGT - TH: GDP (Q2) 4cast:2.4 % y/y [Mkt: 2.3, Prev: 2.8]

- 05:30 GMT / 13:30 SGT - JP: Tokyo Department Store (Jul) [Prev: -1.3]

- 08:00 GMT / 16:00 SGT - EU: Current Account (sa) (Jun) [Prev: 29.7]

- 09:00 GMT / 17:00 SGT - EU: HICP - Core (Jul F) [Prev: 0.9]

- 09:00 GMT / 17:00 SGT - EU: CPI (Jul F) [Mkt: 1.1, Prev: 1.3]

EVENTS & AUCTIONS

03:30 GMT / 11:30 SGT - JP: 12mth Bills Auction

15:30 GMT / 23:30 SGT - US: 3mth Bills Auction (USD 45bln)

15:30 GMT / 23:30 SGT - US: 6mth Bills Auction (USD 42bln)


Forex - Hong Kong Chart Hang Seng Index Update: Decline stalled, turning into consolidation


 01:54 (GMT) 16 Aug

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Forex - Asia Open - Overnight Highlights


 00:29 (GMT) 12 Aug

 [Forex Highlights]

Asia Overnight Highlights - 12 Aug 2019

MAJORS

FX Highlights:

The USD has recovered after a temporary dip last Friday. USD/JPY saw a low of 105.25 but EUR/USD saw only modest gains to around 1.1220, Italian political risks persisting. A report that a Trump remark on not doing business with Huawei referred only to the Federal government saw equities and the USD move off the lows.
EUR/CHF kept to a tight range near 1.09. The NOK managed a modest recovery after stronger than expected CPI data, and the SEK also rallied, though the EUR corrected some of its losses against both later.
USD/CAD bounced to 1.3274 on a decline in Canadian employment, but with wages firmer and oil up the bounce was fully erased. The equity slide saw a modest bounce to around 1.3245 before slipping back near 1.32. AUD was subdued, with AUD/CAD unable to hold above .90.

Data/Events Highlights:

- US Jul PPI +0.2% as exp, ex food and energy -0.1% vs +0.2% exp.

- Canada Jul employment -24.2k vs +15k exp, unemployment rose to 5.7% from 5.5% vs 5.5% exp, hourly wages to 4.5% yr/yr from 3.6% vs 3.8% exp.

- Japan's economy grew 1.8% q/q SAAR and 0.4% q/q in Q2 according to advance estimates. This performance is modest but not too bad compared to that of Q1. This bettered market expectations. Growth was supported by domestic demand even though export growth was weak.

-Q2 UK GDP unexpectedly fell by 0.2%, below market expectations of no change. The decline was due primarily to weakness in manufacturing output, which itself likely reflected destocking after the inventory build in Q1 which anticipated Brexit.

- VIX index: 17.97 (+6.27%)

- Gold Spot: $1,499.36/oz (+0.47%)

- ICE Brent front contract: $58.21 ($-0.32)

- Nymex WTI front contract: $54.21 ($-0.29)

- Reuters/Jefferies Commodities Index: 172.09 (+1.04%)

- 10y UST: 1.745% (+3bp) (Asia morning)

- DJI: 26,287.44 (-0.34%); S&P: 2,918.65 (-0.66%); Nasdaq: 7,959.14 (-1.00%)

Data/Events Ahead:

A quiet day ahead in terms of data releases.

EMERGING ASIA

FX Highlights:

Asian currencies had a cautious start to the new week. Signs of further escalation of US-China trade war still weighed on markets. Currency movements in the region are limited as several markets are closed for holiday.

USD/CNH was consolidative around 7.1000 as the new week started. Trade concerns still weighed on markets. Although unlikely for now, a breach of the 7.1400 high on 6 August could prompt further move towards the 7.2000 big figure. 1Y NDFs eased slightly to 7.1400 at last look. Markets have priced chances of no trade deal and are now stabilising on China policy consistency. For USD/CNY, a move above 7.0500 big figure will next have markets testing 7.0670 resistance.

USD/SGD extended gains after the new week started, and was seen at a high of 1.3880. Trade actions taken by both U.S. and China, along with the Fed's decision, will continue to drive future price action. Focus for the week ahead will be on Singapore's Q2 GDP final print on Tuesday. We expect Q2 GDP to be revised down to 0.0% y/y from 0.1% y/y. Break of 1.3873 resistance turn our attention to the 1.3889 resistance next.

USD/IDR 1M NDFs rebounded slightly to 14300 Friday night, and was seen lower to 14283 at last look. The onshore spot inched lower to 14200 last Friday. For USD/IDR, 14122 support likely to hold and some vulnerability towards 14360 resistance should persist.

Onshore USD/INR recovered somewhat after hitting a low of 70.450 last Friday, and closed at 70.800. Pair will likely continue to be affected by US-China trade tensions and domestic Kashmir volatility. Pair will need to lift above 71.000 to resume upmove.1M NDFs still held onto gains, and were trading at 70.320 into Asia hours on Monday.

Data/Events Highlights:

A bad set for China price data last Friday. Inflation climbed further to 2.8% y/y even as market expectations were for some stability. This also meant 0.4% m/m increase (we were expecting none). Food inflation remains a major concern - it climbed a staggering 9.1% y/y in July. Meanwhile PPI fell 0.3% y/y, the first since August 2016. This is bad for factory profits. Malaysia industrial production eased slightly to 3.9% y/y in June from 4.0% y/y prior. India industrial production also came in weaker in June, at 2.0% y/y from 4.6% y/y in May.

Data/Events Ahead:

No key data releases due in the day ahead as several markets are closed for holiday.

DATA RELEASES DUE TODAY

- 18:00 GMT / 02:00 SGT - US: Monthly Budget Statement (Jul) [Mkt: -111, Prev: -8.5]

- 23:50 GMT / 07:50 SGT - JP: PPI (Jul) [Mkt: 0.1, Prev: -0.5]

- 23:50 GMT / 07:50 SGT - JP: PPI (Jul) [Mkt: -0.5, Prev: -0.1]

EVENTS & AUCTIONS

- IN/PH: Market Holiday - Eid al-Adha

-MY/ SG: Market Holiday - Hari Raya Haji

-TH: Market Holiday - Queen Mother's Birthday

15:30 GMT / 23:30 SGT - US: 3mth Bills Auction (USD 42bln)

15:30 GMT / 23:30 SGT - US: 6mth Bills Auction (USD 42bln)

22:00 GMT / 06:00 SGT - AU: RBA's Kent speaks in Sydney


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