Forex - Asia Open - Overnight Highlights


 23:50 (GMT) 22 Jul

  [Forex Highlights]

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Asia Overnight Highlights - 23 Jul 2019

MAJORS

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

FX Highlights:

The Bloomberg dollar traded with a mild upside bias on Monday as ranges remained tight. The index stayed below 97.300 as Fed officials entered the quiet period ahead of the July 30-31 FOMC meeting.

GBP saw some weakness in the European morning, though EUR/GBP peaked at .90. While there was no obvious trigger, the resignation of foreign office minister Alan Duncan coming after most of the decline in GBP, the expectation of more ministerial resignations this week after the expected announcement of Boris Johnson as the new Prime Minister is enough to create some nerves in GBP after the rally in the second half of last week. While GBP saw some recovery in North America, Cable was unable to hold above 1.25.

USD/JPY settled marginally below 108 while EUR/USD kept to a very tight range above 1.12.

USD/CAD moved above the 1.31 level as wholesale trade data for May came out weaker than expected, falling 1.8% m/m. This was despite modest gains in oil. AUD/CAD remains below .9250.

EUR/CHF touched below 1.10 with eyes on Thursday's ECB meeting but USD/CHF held above .98.

Data/Events Highlights:

- Canada May wholesale sales -1.8% vs +0.5% exp.

- US Jun Chicago Fed National Activity Index -0.02 vs +0.08 exp.

- VIX index: 13.53 (-6.37%)

- Gold Spot: $1,423.80/oz (-0.08%)

- ICE Brent front contract: $63.26 (+$0.79)

- Nymex WTI front contract: $56.14 ($-0.08)

- Reuters/Jefferies Commodities Index: 178.55 (-0.02%)

- 10y UST: 2.046% (-1bp) (Asia morning)

- DJI: 27,171.90 (+0.07%); S&P: 2,985.03 (+0.28%); Nasdaq: 8,204.14 (+0.71%)

Data/Events Ahead:

U.S. existing home sales should fall by 0.7% to 5.30m after a stronger May. Richmond Fed survey and FHFA house price index is also due.

European Commission will release the July consumer confidence. So far this year, the indicator has been fairly stable in a narrow range between -6.5 and -7.4.

ECB will release the euro area Bank Lending Survey for Q2, with banks' expectations about Q3 lending activity.

Japan's final print of June machine tool orders data will be out.

The new Tory leader should be announced on Tuesday, the question being whether the likely winner, Boris Johnson, will face an immediate vote of confidence in his government from parliament which is scheduled to go into summer recess on Thursday.

EMERGING ASIA

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

FX Highlights:

Most Asian currencies slid against the USD at the start of the week as traders scaled back bets for a half-point rate cut by the Federal Reserve this month. KRW (-0.33%) led the losses with 20-day exports data showing another challenging month for Asia in trade terms. INR (-0.17%) was also in losses amid the central bank chief turning less dovish than before. THB (-0.20%) and TWD (-0.12%) also declined.

USD/CNH was little changed on Monday, although it edged up to 6.8844 towards the close of NY. Markets appear to be fatigued from US-China trade news and HK updates. We continue to see pair within the range of 6.8600-6.9000. 1Y NDFs traded with a slight bid tone to touch 6.9240 in late NY/early Asian hours but slid back towards 6.9200 handle in Asia this morning. USD/CNY remained in range, seen between 6.8768 - 8828 on Monday. For USD/CNY, momentum remains limited, and should cap pair mostly within 6.8650-6.8900 range.

USD/SGD was choppy around the 1.3600 handle on Monday amid no clear market news and watch on June CPI due today. Pair edged to highs of 1.3618 but slid back lower to drop below the 1.3600 big figure before returning to 1.3610 at last look. Over the weekend, MTI warned of downgrades to GDP forecast. Market expectations of MAS easing also growing in recent days. With pair reaching the top of the 1.355-1.362 band, watch for further breakthrough and the resistance level of 1.3626.

USD/IDR 1M NDFs saw some gains to 14010+ but these were not sustained and pair retuned to 14000 handle later amid narrow range trading. Onshore spot was unable to break below the strong support at 13890 on Friday and gapped higher to open the week at 13945 from previous close of 13938. Pair edged higher to 13960+ levels as Fed officials tried to calm investors about a steep rate cut probabilities. Pair however slid back to opening levels around 13940 into the close. Expect range trading between 13890 and 14000 unless Fed or trade war situation develops further.

USD/INR 1M NDFs touched 69.300-levels but subsequently traded around 69.200. Onshore spot broke above the 69 handle on Monday to print fresh near 3-week highs of 69.060 as RBI Governor Das signalled that further rate cuts will be dependent on data and avoided the extent of dovishness that he has displayed before. Shadow banking risks also returned to the forefront. Pair traded on either side of the 69 handle thereafter but slid to lows of 68.890 into the close. A clear break of the 69 handle will open the doors to 69.200.

Data/Events Highlights:

Thailand's June customs exports were less bad than expected, down 2.15% y/y, while imports disappointed at -9.47% y/y bringing the trade surplus to $3212 mn.

Data/Events Ahead:

Singapore's June CPI release will be closely watched today as best for MAS easing are picking up.

Taiwan's June IP is also due.

DATA RELEASES DUE TODAY

05:00 GMT - SG: CPI (Jun) 4cast: 0.9% y/y (Mkt: 0.8 Prev: 0.9)

05:30 GMT - JP: Tokyo Department Store (Jun) % y/y (Prev: -1.6)

08:00 GMT - TW: Industrial Output (Jun) % y/y (Mkt: -0.2 Prev: -3.05)

13:00 GMT - US: FHFA House Price Index (May) % m/m (Prev: 0.4)

14:00 GMT - US: Existing Home Sales (Jun) 4cast: 5.3mn (Mkt: 5.35 Prev: 5.34)

14:00 GMT - EU: Consumer Sentiment (Jul A) (Mkt: -7.2 Prev: -7.2)

22:45 GMT - NZ: Trade Balance (Jun) NZD mn (Mkt: 100 Prev: 264)

EVENTS & AUCTIONS

- 03:35 GMT - JP: 40yr Bond Auction

- 09:30 GMT - EU: ECB Main Refinancing Operation Result

- 09:30 GMT - UK: 2029 0.875% Bonds Auction(GBP 2.75bln)

- 17:00 GMT - US: 2yr Notes Auction (USD 40bln)


Forex - Malaysia Flows: Ringgit stable as CPI eyed this week


 02:45 (GMT) 22 Jul

 [Forex Flows]

USD/MYR moved slightly higher to 4.1170 this morning after opening flat at 4.1120 but traded quietly despite upside pressures from Fed commentators trying to curb expectations of a 50bps cut and weak South Korea export data this morning signaling another month of export weakness for Asia. Pair however eyed the foreign reserve data due later today and the June CPI due on Wednesday to gauge BNM stance. Resistance at 4.120 will only come into view upon strong oil move lower or worsening trade situation. Expect 4.1040 support to be threatened. 1M NDFs traded higher to 4.1100 from lows of 4.1023 on Friday. KLCi was down by 0.26% at last sight.


Forex - Indonesia Flows: Rupiah to target fresh YTD highs


 02:19 (GMT) 19 Jul

 [Forex Flows]

USD/IDR onshore spot gapped lower to open at 13928 on Friday after last close of 13960 and dipped to 13900-levels in early trading after BI announced a rate cut on Thursday, while still remaining prudent and avoiding excessive dovishness. The USD also softened overnight as Fed comments pointed towards further dovishness. Pair is likely to eye the YTD low at 13895 although the strong support at 13840 will still likely hold amid considerable global headwinds. 1M NDFs meanwhile were offered to lows of 13950 this morning from 14000+ levels seen at earlier in the week. JKSE up close to 0.6% as BI rate cut aids sentiment.


Forex - Chart USD/KRW Update: Pressure returning towards downside


 00:19 (GMT) 19 Jul

 [Forex Charts]

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Forex - Philippines Flows: USD/PHP edging back to 51.000 level


 03:02 (GMT) 18 Jul

 [Forex Flows]

USD/PHP bounced back above 51.000 level, however, the pair still faced some resistance on the upside and edged lower to 51.050 at last look. A lift above 51.155 hurdle is likely to boost rebound. The dollar index slid after IMF said that the dollar was overvalued based on near-term economic fundamentals. 1M NDFs dipped lower to 51.100 after a choppy overnight session. The Philippines stock market started to stabilize after retreating from a peak on Tuesday. PSEi was last seen in mild gains of 0.23% at last look, still below 8300 mark.


Forex - Hong Kong Chart Hang Seng Index Update: Back in consolidation


 01:40 (GMT) 17 Jul

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