Forex - Asia Open - Overnight Highlights

 23:43 (GMT) 10 Jan

  [Forex Highlights]

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Asia Open - Overnight Highlights (0100-KDJP-C01)

Asia Overnight Highlights - 11 January 2017

Charu Chanana


Oil was the big story as it slumped again on high production and investor concerns. Gold prices jumped, and focus now on Trump's press conference.

Majors FX Highlights

The dollar index was seen dipping below 101.600 in the Asian session on Tuesday before recovering into Europe, although a mild weakness was seen again at NY open, the index closed above 102.00. That was significant volatility for a day with limited data and central bank speakers, although Fed Lacker, a key proponent of higher interest rates, announced his retirement in October. Focus today will be any headlines about further details on Trump's fiscal policy from the press conference before he takes office on Jan 20. EUR/USD retreated to fall below 1.0560 into the close of overnight session, with eyes now on 1.0550 at last check. French presidential candidate Macron said that euro may not exist in 10 years, pressing for reforms. GBP/USD remained relatively resilient in the day, trading close to 1.2150 levels and was last seen inching up above 1.2170. USD/JPY was bid up to 116.34 just as New York opened but it ran into offers, slipping down to 115.26 before a bounce to 116.00 subsequently. CAD balanced between a softer USD and another drop in the crude price. AUD/USD recovered most of the ground lost on the retail sales data while the NZD came under some early pressure which the much reduced carry advantage is unable to stave off. NOK and SEK both a little weaker after softer than expected Norwegian inflation but both in familiar territory vs EUR and against each other. EUR/CHF looks solid on the 1.07 handle now but with no rush even to try above 1.0750.

Majors Data Highlights

Dec's NFIB small optimism index at 105.8 versus 98.4 surged by 7.5% after a 3.7% Nov gain to take the index to its highest since Dec 2004.

A quirt day is seen ahead in the US on the data front, although headlines should be taken by Trump's Press Conference before he takes office on Jan 20. Only data of note is UK's industrial production which should rebound by 0.8% m/m after the 1.3% fall in October as temporary oilfield closures are reversed. That should lift the y/y to 0.5% from -1.2%. Manufacturing should match the 0.8% m/m gain (+0.7% y/y from -0.5%). November's trade balance will be released at the same time, with NIESR's Q4 GDP estimate due later.

Emerging Asia FX Highlights

USD/Asians mostly saw a consolidative tone despite volatilities in the dollar index ahead of Trump's press conference. USD/CNY 1Y NDFs were seen above 7.2100 in early trading on Tuesday but slid to a low of 7.1820 into the close of Asia before bouncing back up to near 7.2000-levels in NY. USD/SGD continued to trade on either side of 1.4360 in NY, and USD/IDR 1M NDFs were seen consolidating around 13340 in NY trading hours. Only USD/INR 1M NDFs rallied in NY, picking up pace from a low of 68.2000 to edge to a high of 68.6100 at last look.

Emerging Asia Data Highlights

China's producer prices surged past expectations to more than five-year highs in December as prices of coal and other raw materials soared, while consumer inflation remained subdued. The producer price index (PPI) jumped 5.5 per cent in December from a year earlier, the most since Sept 2011, compared with a 3.3 per cent increase in November. A quiet day is seen ahead in Asia.


- US Dec NFIB Small Business Optimism 105.8 from 98.4 vs Mkt 99.5, a 12 year high

- US Nov Final Wholesale Inventories 1.0% m/m from 0.9 advance.

- VIX index: 11.49 (-0.61%)

- Gold Spot: $1,187.24/oz (-0.04%)

- ICE Brent front contract: $53.64 ($-1.30)

- Nymex WTI front contract: $50.86 (+$0.04)

- Reuters/Jefferies Commodities Index: 191.14 (+0.28%)

- 10y UST: 2.376% (+1bp) (Asia morning)

- DJI: 19,855.53 (-0.16%); S&P: 2,268.90 (0.00%); Nasdaq: 5,551.82 (+0.36%)


- China: China's economy may grow about 6.7% in 2016, NDRC says. - BBG

- Indonesia: Two main problems in Indonesia that may hamper economic growth would be poverty and inequality, President Joko Widodo speaks at anniversary of ruling party PDI- P in Jakarta. - BBG

- India: Modi says India shifting from informal economy to formal economy. - BBG

Asia Open - Overnight Highlights (0100-KDJP-C03)


- No great progress either way on EUR/USD as a lack of data keeps trade quiet ahead of Trump's press conference on Wednesday. 1.0650 still likely to find some stops but that proving a step too far just now.

- GBP still an easier sell with EUR/GBP having a run higher to .8763 in the European a.m., while GBP/JPY interest also reported but with nothing specific. EUR/GBP is back below .87 into the close but don't expect any great GBP recovery ahead of production data on Wednesday.

- USD/JPY is finding buyers well clear of 115 but upside limited too as the DJIA continues to fight shy of 20k. All the talk of GBP/JPY interest might see some focus on a possible break of 140.00.


Very narrow trade with limited incentives & modest volumes. Softer oil briefly supportive. 3yr auction goes well and leaves shorter dates mildly better, curve fraction steeper into longer supply, but really little net change. 2s +0.8bps @ 1.19%, 5s +0.6bps @ 1.88%, 10s +1.3bps @ 2.38%, 30s +1.3bps @ 2.97%.


Nasdaq still leading things, still stretching new highs, with health care also on a bullish run, but morning gains struggled to hold. Earnings season approaches and the obvious near-term focus.

Asia Open - Overnight Highlights (0100-KDJP-C02)


USD/CNY: 1Y NDFs were seen above 7.2100 in early trading on Tuesday but slid to a low of 7.1820 into the close of Asia before bouncing back up to near 7.2000-levels in NY. Another lower midpoint fixing of 6.9234 vs. yesterday's close of 6.9330 resulted in a gap lower at the open, with onshore spot opening at 6.9280. Further downside was seen subsequently and the pair printed a low of 6.9215 towards the close. Authorities should continue to guard gains ahead of the key 6.9500 handle in onshore spot.

USD/CNH: Pair was seen inching higher again to break above the 6.9000 handle, and a high of 6.9129 was printed. The CNY/CNH spread has now narrowed to about 2 big figures as we had expected.

USD/SGD: Pair continued to trade on either side of 1.4360 in NY, with limited traction seen ahead of President Trump's press conference scheduled for later today. Upside potential is still seen. A break above 1.4400 still remains on the cards before the end of the week, but any large moves remain unlikely ahead of Trump's press conference.

USD/IDR: 1M NDFs were seen consolidating around 13340 in NY trading hours. Onshore spot gapped lower to open at 13335 vs. last close of 13365 and slid below 13320 in early trading as the dollar index gave up some gains. A break below support level at 13300 was seen subsequently to a near 1-month low of 13285, although strong bids brought the pair back above the support level. Break of support level at 13300 relieves some upside pressures, although any large moves remain unlikely ahead Trump's press conference later in the week. Any gains towards 13500 are likely to remain guarded by the central bank.

USD/INR: 1M NDFs rallied in NY, picking up pace from a low of 68.2000 to edge to a high of 68.6100 at last look. Onshore spot gapped lower to open at 68.0800 vs. last close of 68.2050 and a slight slip below the 68 handle to a low of 67.9900 was also seen as the dollar index gave up some gains. Bids just below the level however brought the pair quickly above it, and gains towards 68.2000 were seen at last check. 68 remains the key level to watch, and we do not expect the pair to deviate too much from the handle ahead of Trump's press conference and Dec CPI release scheduled for later this week.


- 04:00 GMT - MY: Industrial Production (Nov) [Mkt: 5.5, Prev: 4.2]

- 05:00 GMT - JP: Leading indicator (Prelim) (Nov) [Mkt: 102.6, Prev: 100.8]

- 09:30 GMT - UK: Construction Output (sa) (Nov) [Mkt: 0.2, Prev: -0.6]

- 09:30 GMT - UK: Construction Output (sa) (Nov) [Mkt: 2, Prev: 0.6]

- 09:30 GMT - UK: Industrial Production (Nov) 4cast:0.8 % m/m [Mkt: 1, Prev: -1.3]

- 09:30 GMT - UK: Industrial Production (Nov) 4cast:0.5 % y/y [Mkt: 0.7, Prev: -1.1]

- 09:30 GMT - UK: Manufacturing Production (Nov) 4cast:0.8 % m/m [Mkt: 0.5, Prev: -0.9]

- 09:30 GMT - UK: Manufacturing Production (Nov) 4cast:0.7 % y/y [Mkt: 0.4, Prev: -0.4]

- 09:30 GMT - UK: Trade Balance (Non-EU) (Nov) [Mkt: -3.5, Prev: -1.598]

- 09:30 GMT - UK: Visible Trade Balance (World) (Nov) [Mkt: -11.15, Prev: -9.7]

- 15:00 GMT - UK: NIESR GDP Est. (Dec) [Mkt: 0.5, Prev: 0.4]

- 23:50 GMT - JP: Bank Lending Data (Dec) [Prev: 2.4]

- 23:50 GMT - JP: Current Account (Nov) [Mkt: 1481.8, Prev: 1719.9]


- 03:45 GMT - JP: 30y JGB auction

- 10:45 GMT - EU: EU's Juncker Speaks in Valletta

- 14:15 GMT - UK: BoE's Carney Testifies to Lawmakers

- 18:00 GMT - US: 10y notes reopening - USD 20.00 Bn (Act)

Forex - Singapore Flows: USD/SGD; Minister Yaacob squashes talk of presidential bid

 02:19 (GMT) 09 Jan

 [Forex Flows]

The New Paper: Cabinet minister Yaacob Ibrahim has ruled himself out of the upcoming presidential election, which will be reserved for Malay candidates. In an interview with Malay newspaper Berita Minggu published yesterday, the Minister for Communications and Information said he does not see himself running for president and is happy in his current role. Dr Yaacob, 61, has been touted as a potential candidate for the presidential election that must be held by August. He is one of several Malay individuals who meet the eligibility criteria based on public sector experience. He acknowledged that he was initially "very uneasy" with the idea of a reserved election, but noted it is necessary for all Singaporeans, as a reminder that this is a multiracial nation. On the international front, he is worried about the shift in attention from global problems such as climate change and poverty to "petty politics, hatred politics, misogynistic ideas like what Donald Trump is peddling".

USD/SGD rallied overnight on Friday to break back above 1.4380 as the dollar index registered gains following a strong jobs report which kept up rate hike expectations for 2017. The bounce was extended further above 1.4400 this morning, with pair printing a high of 1.4411 until last look. More upside potential is seen, and eyes remain on the 1.4500 handle. SGD NEER last seen 0.26% below the midpoint. STI eying 8th Dec high of 2980.77, up by nearly 0.4% at last check. CC

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