Forex - Asia Highlights - Thursday, 7 December 2017


 05:29 (GMT) 07 Dec

  [Forex Highlights]

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Asia Highlights - Thursday, 7 December 2017 (0100-VRCB-C01)

US Overview:

Another mostly subdued day saw the USD generally firmer but USD/JPY upside was limited with equities subdued and UST yields lower. USD/CAD saw the biggest move, the BoC statement less hawkish than recent data had led many to expect.

US Highlights:

- US Nov ADP employment +190k as exp.

- US Q3 final productivity 3.0% vs 3.0% prelim and 3.3% exp, final Q3 unit labor costs -0.2% vs 0.5% prelim and 0.2% exp.

- Bank of Canada left rates unchanged as expected, said higher rates likely required over time but will be continue to be cautious.

Currencies:
EUR/USD moving lower as USD bulls tested 1.1800 again to reach a low of 1.1779. Certainly market expectations of 3 Fed hikes next year suggest a rotation higher, but this is likely to have to wait until NFP or potentially the FOMC statement. Seasonal selling of USD also remains a restraint. Nevertheless, price action is coiled for a breakout on EUR/USD rather than fizzling out.

USD/JPY stabilised above 112.00 in Europe, as European equities did not match the scale of the Asian equity correction. Nevertheless, JPY remains underpinned by this profit-taking on riskier assets and is expected to remain a factor into the middle of next week.

GBP moved lower on news reports suggesting that the N Ireland Brexit talks were not progressing and that splits exists in the cabinet. GBP bulls are getting nervous ahead of next week's summit.

SEK rallied on 2 governors suggesting earlier Riksbank rate hikes in 2018, but this failed to last on EURSEK. Worth watching for the Riksbank monetary policy report next week.

CAD was hurt by a less hawkish tone than expected after recent good data, USD/CAD above 1.28 after the BoC statement. The lack of a timing hint also hurt. Even so, the statement was broadly similar to October and is consistent with BOC hikes in 2018.

Asia FX and News:
- Australia trade balance shrinks in October due to export
- A total of 49 countries violated United Nations sanctions on North Korea to varying degrees between March 2014 and September 2017, the Institute for Science and International Security said. -CNN
- North Korea: US threats make war unavoidable on Korean peninsula - KCNA
- Japan manufacturers' mood steady in positive sign for BOJ tankan: Reuters Tankan
- Arabs, Europe, U.N. reject Trump's recognition of Jerusalem as Israeli capital -Reuters
- China's banks need more capital after credit boom, IMF Says -BBG
- Lawmakers' Plans to Overhaul Fannie and Freddie Come Into Focus -BBG
- Jean-Claude Juncker 'fears Theresa May's Government will collapse next week without Brexit deal' -Telegraph
- A poor showing from Australia trade data (only amounted to 7.5% of estimated), weighed on the Southern hemisphere pair. NZD leads the loser chart, down 0.4% towards next support at 0.6840. Aussie held up slightly better, still above session lows at 0.7542. BOJ Kuroda's speech delivered the expected, sees USD/JPY kept close to 112.40. Strong rebound in Nikkei after a 2% fall yesterday lending some support to USD/JPY. Cable stays offered on the lack of positive progress from Brexit talks as time passes by. EUR/USD little changed from where New York closes with German talks and NFP ahead. USD/CAD edge higher but kept in check by previous session high at 1.2807, despite oil showing some demand.

Nikkei and JGB:
Nikkei +1.11%, JGB 10yr at 0.062%

Data:

AU: AIG Construction PMI (Nov) 57.5 (Prev: 53.2)

AU: Trade Balance (Oct) 105 AUD mn (Mkt: 1400 Prev: 1604R)

JP: Leading Indicator (Prelim) (Oct) 106.1(Mkt: 106.1 Prev: 106.4)

Still To Be Released -

Data:

05:30 GMT - NL: CPI (Nov) % m/m (Prev: 0.1)

05:30 GMT - NL: CPI (Nov) % y/y (Prev: 1.3)

05:30 GMT - NL: HICP (Nov) % m/m (Prev: 0.2)

05:30 GMT - NL: HICP (Nov) % y/y (Mkt: 1.4 Prev: 1.3)

06:45 GMT - CH: Unemployment (sa) (Nov) % (Mkt: 3.1 Prev: 3.1)

07:00 GMT - DE: Industrial Production (Oct) % m/m (Mkt: 0.9 Prev: -1.6)

07:00 GMT - DE: Industrial Production (Oct) % y/y (Mkt: 4.3 Prev: 3.6)

07:00 GMT - NO: Industrial Production (Oct) % y/y (Prev: 1.2)

07:00 GMT - NO: Industrial Production (sa) (Oct) % m/m (Prev: -0.5)

07:00 GMT - NO: Industrial Production, Manufacturing (nsa) (Oct) % y/y (Prev: 12.3)

07:00 GMT - NO: Industrial Production, Manufacturing (sa) (Oct) % m/m (Mkt: 0.7 Prev: 2.6)

07:45 GMT - FR: Trade Balance (Oct) EUR bn (Mkt: -4.675 Prev: -4.669)

08:30 GMT - UK: Halifax House Price Index (Nov) % 3m y/y (Mkt: 3.9 Prev: 4.5)

08:30 GMT - UK: Halifax House Price Index (Nov) % m/m (Mkt: 0.2 Prev: 0.3)

08:30 GMT - SE: Average House Prices (Nov) mn (Prev: 2.917)

09:00 GMT - IT: Unemployment (Q3) % q/q (Mkt: 11.2 Prev: 11.2)

10:00 GMT - EU: GDP (SA) (Final) (Q3) 4cast: 0.6% q/q (Mkt: 0.6 Prev: 0.6)

10:00 GMT - EU: GDP (SA) (Final) (Q3) 4cast: 2.5% y/y (Mkt: 2.5 Prev: 2.5)

10:00 GMT - GR: Unemployment (Sep) % (Prev: 20.6)

13:30 GMT - CA: Building permits (Oct) % m/m (Mkt: 1 Prev: 3.8)

13:30 GMT - US: Initial Claims (43071) k (Mkt: 240 Prev: 238)

15:00 GMT - CA: Ivey PMI (Nov) (Mkt: 62.5 Prev: 63.8)

20:00 GMT - US: Consumer Credit (Oct) USD bn (Mkt: 17 Prev: 20.83)

23:50 GMT - JP: Bank Lending Data (Ex trusts) (Nov) % y/y (Prev: 2.8)

23:50 GMT - JP: GDP (Final) (Q3) % q/q ann (Mkt: 1.5 Prev: 1.4)

Events & Auctions

03:35 GMT - JP: 3mth Bills Auction

03:45 GMT - JP: 30yr Bond Auction

07:00 GMT - SE: Riksbank's Floden Speaks in Stockholm

09:00 GMT - SE: Riksbank's Skingsley Speaks in Paris

09:30 GMT - ES: Bond Auction

09:50 GMT - FR: Bond Auction

10:30 GMT - UK: 1.5% 2047 Bond Auction

10:50 GMT - FR: I/L Bond Auction

15:00 GMT - EU: ECB's Draghi Speaks in Frankfurt


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