Forex - GOOD MORNING Latam! (FX HIGHLIGHTS BRL MXN ARS CLP COP PEN)...


 11:24 (GMT) 17 Apr

  [Forex Highlights]

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RECAP CURRENCIES, DATA AND EVENTS

Regional Backdrop

Asian currencies rallied on Wednesday, buoyed by China's strong GDP growth result and improving March numbers. CNH (0.39%) and CNY (0.32%) led the gains, as were SGD (0.13%), TWD (0.08%), KRW (0.08%). These are currencies closely linked to global trade and China growth. In contrast MYR was underperforming with a 0.22% loss against the USD.

News and FX

Asia:

+ China: China Front-Loads Fiscal Expenditure in 2019 Amid Stimulus Push ~ BBG

+ China: Q1 GDP 6.4% y/y (Prev: 6.4); March Retail Sales 8.7% y/y (Prev: 8.2); Industrial Production 8.5% y/y; Fixed Asset Investment YTD 6.3% y/y (Prev: 6.1).

+ Singapore: March NODX -11.7% y/y (Prev: 4.8R); NODX - Electronics -26.7% y/y (Prev: -8.2R)

+ Indonesia: Joko Widodo is leading Prabowo Subainto in early unofficial quick count according to CSIS ~ BBG

+ USD/CNH: USD/CNH saw a sharp move down to 6.6889 from 6.7140 on Wednesday, after being range-bound for months. This was propelled by a strong China GDP print: 6.4% y/y vs. our expectations of 6.2%. March numbers look well supported by official stimulus with industrial production (8.5% y/y) seemingly back to 2017 boom numbers. Retail sales also rebounded. PBoC fixed mid-point at 6.7110 vs. previous close of 6.7128. USD/CNY was down to 6.6917 last. 1Y NDFs similarly followed spot movements down to 6.7269.

Europe

GOOD MORNING Latam! (FX HIGHLIGHTS BRL MXN ARS CLP COP PEN)... (0101-KSMW-C01)

+ FX showed a risk positive bias through the European morning, most obviously in EUR/CHF, which traded above 1.14 for the first time in early February, but EUR/JPY also hit its highest level since early March, and AUD/USD continued to test resistance at 0.72. Sentiment was supported by the strong Chinese data overnight, even though there was little reaction in equity markets.

+ UK CPI data was slightly weaker than expected, with the core rate unchanged at 1.8% in March, and house prices were more clearly weak, up 0.6% y/y in Feb from 1.7% in Jan, the weakest y/y rate since 2012. GBP continued to trade modestly weaker across the board.

+ Eurozone trade and current account data for February attracted little attention. The trade data showed a decline in both exports and imports in February, but the decline in imports was sharper, and the trade surplus increased to 19.5bn in Feb. However, the current account surplus for Feb fell to 27bn from 37bn in Jan. Eurozone CPI was confirmed at 1.4% y/y in March, in line with the provisional release.

Bonds and equities

+ The China data helps keep core under grinding pressure, UST especially as 10s test above 2.6% while the future extends the move below 122-30. In Europe, bunds test the key 0.1% resistance before backing off while gilts likewise test 1.25% before inching off after soft prices data. Semi-core also stays on back foot, while BTPs steady

US DATA

GOOD MORNING Latam! (FX HIGHLIGHTS BRL MXN ARS CLP COP PEN)... (0101-KSMW-C02)

Today, Feb's trade deficit should correct higher to $53.2bn from Jan's narrower $51.1bn. Due later on are Feb wholesale data and the Fed's Beige Book. Dovish Fed voter Bullard is also due to speak.


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