Forex - Asia Open - Overnight Highlights

 00:06 (GMT) 17 May

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

Asia Overnight Highlights - 17 May 2019

Majors FX Highlights

Dollar made broad based gains during NY hours following upbeat U.S. economic data, which drew investors into U.S. equities. Fall in initial jobless claims, along with strong Philadelphia Fed business outlook, higher housing starts and building permits led to a positive shift in momentum away from the strained bilateral relations between the U.S. and China. Dollar climbed to a 97.882 high since early May from the 97.500 handle.

The Eurozone trade balance increased more than expected in Mar to 22.5bn from 17.9bn in Feb. EUR/USD's high came at 1.1225 but US data took it back below 1.1200. A fall to 1.1770 followed after Italian League leader Salvini threatened to "tear up" European rules that restricted Italy. Pair subsequently traded around the 1.1175 level.

USD/JPY's equity-fueled rally failed to break above the 110.00 level and was hovering above 109.80 at last look.

USD/CAD reversed its losses from the European morning following dollar strength, rebounding from 1.3400 to 1.3467 at last look. This was despite gains in oil, positive Canadian manufacturing shipments data and BoC's Poloz sounding cautiously positive after the BoC released its Financial System review.

GBP remained the weakest of the majors, with EUR/GBP hitting 0.8749, the pair's highest level since Feb 19. Concerns are growing about the possibility of May resigning if she fails to pass the Withdrawal Bill in early June, as most believe is overwhelmingly likely.

Data highlights:

- US Apr housing starts +5.7% to 1235k vs 1209k exp., permits +0.6% to 1296k vs 1289k exp.

- US May Philly Fed manufacturing index rose to 16.6 from 8.5 vs 9.0 exp.

- US Initial Claims fell to 212k from 228k from 220k exp.

- Fed's Brainard and Kashkari expressed support for allowing inflation to move above 2%.

- VIX index: 15.29 (-7.00%)

- Gold Spot: $1,286.26/oz (-0.03%)

- ICE Brent front contract: $72.62 (+$0.85)

- Nymex WTI front contract: $63.14 (+$0.27)

- Reuters/Jefferies Commodities Index: 182.32 (+0.92%)

- 10y UST: 2.394% (+2bp) (Asia morning)

- DJI: 25,862.68 (+0.84%); S&P: 2,876.32 (+0.89%); Nasdaq: 7,898.05 (+0.97%)

Data Ahead:

A relatively quiet Friday, which will see the release of the Eurozone CPI for April. Markets are expecting a slight slip to 2.4% y/y in April from 2.7% y/y in March. In the United States, May preliminary Michigan Consumer Sentiment Index data will be released, where markets are expecting a fall to 97.1 from 97.2 previously. April's leading index will be released as well and a slip to 0.2% is widely expected. New York Fed President Williams will meet with local community and business leaders in New York, while Bank of England's Brazier will be speaking in London.

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

Emerging Asia FX Highlights

Asian currencies climbed higher overnight after strong U.S. economic data, which boosted the dollar and equities. USD/CNH rose to 6.9329 from 6.9100 level after Thursday's Asia close. 1Y NDFs was lifted to an intra-day high at 6.9715 from 6.9450. USD/SGD climbed 43 pips from around 1.3687 to 1.3730 at last look. USD/IDR 1M NDFs rose to 14571 at last look from 14521 at the beginning of NY hours. USD/INR 1M NDFs reversed Thursday's loss, rising from an intra-day low at 70.33 to an intra-day high at 70.67.

Emerging Asia Data Highlights

Bank Indonesia (BI) kept policy rates unchanged again at 6.00% at the May meeting, in-line with our expectations. Despite BI mentioning that the monetary policy stance is "neutral and cautious", we see no clear tints of dovishness in the bank's language. Next, Malaysia's GDP growth slowed slightly to 4.5% y/y from 4.7% prior, but was better than consensus expectations at 4.3% y/y. This was dragged by a slowdown in mining and construction. Services remained a support growing 6.4% y/y. Current account surplus was better than expected.

Hong Kong Monetary Authority (HKMA) will be releasing its composite interest rate. Singapore's NODX and Electronics are expected to see an improvement from March but still fall by 4.6% y/y and 20% y/y in April. Hong Kong's final Q1 GDP print will cap off the busy week.


- n/a GMT - JP: Tokyo Department Store (17th - 22nd) (Apr) 4cast: % y/y (Mkt: Prev: 0.6)

- 00:30 GMT - SG: NODX (Apr) 4cast: -4.6% y/y (Mkt: Prev: -11.7)

- 00:30 GMT - SG: NODX - Electronics (Apr) 4cast: -20% y/y (Mkt: Prev: -26.7)

- 04:30 GMT - JP: METI Tertiary activity index (Mar) 4cast: % m/m (Mkt: 0.1 Prev: -0.6)

- 09:00 GMT - EU: CPI (Apr) 4cast: % m/m (Mkt: 0.7 Prev: 1)

- 09:00 GMT - EU: CPI (Apr F) 4cast: %y/y (Mkt: 1.7 Prev: 1.4)

- 09:00 GMT - EU: HICP - Core (Apr F) 4cast: % y/y (Mkt: 1.2 Prev: 1.2)

- 14:00 GMT - US: Leading Indicator (Apr) [Mkt: 0.2, Prev: 0.4]

- 14:00 GMT - US: Univ of Mich Sentiment (May P) 4cast: index (Mkt: 97.7 Prev: 97.2)


- 03:30 GMT - JP: 3mth Bills Auction

- 10:00 GMT - UK: 28-Day Bills Auction (GBP 0.5bn)

- 10:00 GMT - UK: 91-Day Bills Auction (GBP 1bn)

- 12:00 GMT - UK: BoE's Brazier speaks in London

- 16:15 GMT - US: Fed's Williams speaks in New York

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