Forex - Asia Close Highlights


 08:51 (GMT) 29 Nov

  [Forex Highlights]

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Asia Close Highlights (0101-PWVC-C01)

29 Nov 2019

Charu Chanana, Jiaxin Lu, Defa Zhao

Regional Backdrop:

Majority of the Asian currencies weakened against the dollar during the week as the dollar strengthened amid a strong Q3's GDP showing. Initial trade optimism was pared towards the end of the week, after Trump's signed the Bill in support of the Hong Kong protestors, risking possible retaliation from China. JPY was the biggest loser, down 0.80% against the dollar. Other currencies saw modest losses against the dollar as well: KRW (-0.21%), SGD (-0.19%), INR (-0.17%), THB (-0.15%), IDR (-0.15%) and MYR (-0.08%). CNH and CNY were the only winners, up 0.18% and 0.16% respectively against the greenback. TWD, PHP and HKD were relatively stable.

USD/CNH continued to be driven by trade headlines. Trade optimism at the start of the week spurred modest gains in offshore yuan, USD/CNH slipped to a low of 7.0091 on Tuesday. Market sentiment was subsequently dampened by the decision of US President Trump to sign Hong Kong Human Rights and Democracy Act, and USD/CNH edged up to 7.0350 at last look.

USD/CNY was largely range bound during the week. Pair traded mostly between 7.0217 -7.0358 amid trade jitters. 1Y NDFs tested the low of 7.0855 on Wednesday, and traded higher to 7.1050 thereafter.

USD/SGD traded with an upside bias across the week amid strength in the dollar. Pair extended its gains from around 1.3640 at the beginning of the week to 1.3671 on Friday, a fresh high since mid-October. Dollar strengthened after U.S's Q3 GDP beat expectations. Risk aversion rose as well after Trump has signed the human rights Bill in support for the Hong Kong protestors. Meanwhile, Singapore's October CPI remained weak and slipped further to 0.4% y/y from 0.5% y/y in September. However, Singapore's October industrial production beat market expectations and rose to 4.0% y/y from a revised 0.7% y/y in September.

USD/IDR onshore spot started the week lower amid U.S./China trade deal optimism, and intraweek lows of 14078 were printed on Tuesday. Risk aversion however picked up later in the week following President Trump's signing of the HK bill which may likely instigate China and spoil the trade talks. Pair was however capped at 14100 initially, possibly stalled by authorities, but broke above on Friday to test the 14115 resistance as we had expected.

USD/INR onshore spot traded in v-shaped pattern on Tuesday, seeing a bearish bias first to slip to 3-week lows of 71.295 amid expectations of reforms from the Modi government following announcements of divestments. U.S/China trade talks however still kept investors jittery and the slowdown expected in Q3 GDP data on Friday boosted risk aversion and brought the pair back to 71.800 levels at last look on Friday.

Market Psychology

USD/CNH - Quiet markets still mean no change to our view that the pair will remain within 7.0000-7.1000 near-term. For USD/CNY, Further gains is likely to be capped, the pair may target support at 7.0197.

USD/SGD - Eyes will be on the 1.3700 big figure as dollar continues to strength. If broken, we will turn our attention to the 1.3721 resistance.

USD/IDR - Gains above 14115 will be tough unless trade talks see a real deterioration, in which case 14150 is likely to cap.

USD/INR - Pair is likely to face continued upside pressures amid domestic and external volatilities, and the 72 level may be eyed again.


Forex - Indonesia Flows: USD/IDR still capped at 14100


 02:41 (GMT) 29 Nov

 [Forex Flows]

USD/IDR onshore spot gapped a notch lower to open at 14090 from previous close of 14093 but moved towards 14100 again, and was possibly capped by authorities again. US/China trade talks are at risk again after President Trump signed the HK bill, and fiscal deficit at home is also seeing risks of slippage as government attempts to support growth. No risk is seen to 14050 support and upside pressures are likely to return. We continue to see a risk of another move towards 14110 resistance, but expect BI to limit gains above that. 1M NDFs meanwhile continued to trade in consolidation around 14140 this morning again. JKSE up by nearly 0.5% at last check.


Forex - Asia Open - Overnight Highlights


 23:43 (GMT) 27 Nov

 [Forex Highlights]

Asia Overnight Highlights - 28 Nov 2019

MAJORS

FX Highlights:

The Bloomberg dollar spot index was supported by upbeat economic data even as trade news started to get the pair fatigued. A strong initial round of US data (durables, GDP and initial claims) saw EUR/USD dip below 1.10 though subsequent data was less impressive helping the pair to stabilize. Continued optimism on a US-China trade deal pushed USD/JPY above 109.50.

But President Trump signed a bill in late NY/early Asian hours in support of HK protestors which saw risk aversion creep in as well. USD/JPY dropped to 109.35 and AUD/JPY slid from 74.295 highs to 73.913.

The EUR was soft despite better than expected French November consumer confidence data - the strongest since June 2017 and the second strongest since the GFC, though Italian business and consumer confidence were both weaker than expected.

GBP may have benefitted from a perception that Labour's electoral prospects will have been harmed by an interview with leader Corbyn screened on Tuesday night. Gains extended on talk that an upcoming closely watched poll from YouGov MRP would show a comfortable Conservative majority, pushing GBP/USD above 1.29.

Commodity currencies saw some support from strength in equities but eventually the firm USD tone make its mark. An AUD recovery in Europe only corrected losses seen in Asia, and a USD/CAD dip to the lowest level since last week failed to hold.

Data/Events Highlights:

- US Q3 GDP revised to 2.1% from 1.9% vs 1.9% exp.

- US Nov durable goods orders +0.6% vs -0.9% exp, ex transport +0.6% vs +0.1% exp.

- US initial claims fell to 213k from 228k vs 221k exp.

- US Nov Chicago PMI rose to 46.3 from 43.2 vs 47.0 exp.

- US Oct pending home sales -1.7% vs +0.2% exp.

- US Oct personal income 0.0% vs +0.3% exp, spending +0.3% as exp, core PCE prices +0.1% as exp.

- VIX index: 11.75 (+1.82%)

- Gold Spot: $1,457.15/oz (+0.19%)

- ICE Brent front contract: $64.06 ($-0.21)

- Nymex WTI front contract: $58.01 ($-0.10)

- Reuters/Jefferies Commodities Index: 180.35 (-0.42%)

- 10y UST: 1.765% (+2bp) (Asia morning)

- DJI: 28,164.00 (+0.15%); S&P: 3,153.63 (+0.42%); Nasdaq: 8,705.18 (+0.66%)

Data/Events Ahead:

It is the Thanksgiving holiday in the U.S., so a quiet move to the weekend. Equity and bond markets will be closed.

Japan's October retail sales will provide further clue on the impact of sales tax hike. We expect retails sales to fall back by about 7.1% y/y in October after last-minute demand pushed sales higher in September.

Australia's private capital expenditure will also be released.

EMERGING ASIA

FX Highlights:

A mixed day for Asian currencies amid dollar strength and trade optimism. MYR (+0.29%) and INR (+0.20%) were the biggest winners. MYR strengthened following optimism from the Malaysian government on Q4 GDP. INR gained due to sustained hopes of domestic reforms. PHP and CNY were both up 0.20% and 0.07% respectively. However, THB (-0.11%), KRW (-0.10%) and SGD (-0.08%) were in mild losses.

USD/CNH was seen trading on either side of 7.0200 on Wednesday before a surge to 7.0300 levels early this morning after President Trump signed the HK support bill. However, pair remains within the 7.0000-7.1000 range for now. We see this pattern continuing. Onshore spot USD/CNY remained slightly lower on Wednesday and traded around 7.0250 in the day, but may likely target the upper end of recent range at 7.0450. 1Y NDF broke above 7.1000 handle on HK news after trading closer to 7.0950 on Wednesday.

USD/SGD re-tested the upside at 1.3665 resistance on Wednesday but reversed later towards 1.3650. Pair however saw upside pressures early this morning on reports of President Trump signing the HK bill, which may pressures trade talks as well and instigate a response from the Chine side. Pair last seen close to 1.3660. Eyes will be on the 1.3675 resistance. If broken, we will turn our attention to the 1.3721 resistance next.

USD/IDR 1M NDFs traded horizontally around 14140 on Wednesday. USD/IDR onshore spot remained close to Tuesday's close of 14088 in early trading on Wednesday, although some gains to 14103 were seen in the afternoon, with possible BI capping further gains. The continued rhetoric around the U.S./China phase 1 trade deal is helping to revive sentiments, but investors are now fatigued and await real developments. We believe the pair remains fragile amid trade risks and a widening budget deficit at home. Support at 14050 not at risk and upside pressures are likely to return. We continue to see a risk of another move towards 14110 resistance, but expect BI to limit gains above that.

USD/INR 1M NDFs continued to trade with a bearish bias on Wednesday, and slid below 71.500 in late NY. USD/INR onshore spot also saw a bearish bias on Wednesday amid sustained hopes of domestic reforms. Pair broke the 71.545 support into the close on Tuesday and was seen printing fresh 2.5-week lows of 71.2950 in the afternoon. The U.S./China trade talks are also still ongoing, and Q3 2019 GDP growth data will be released at the end of the week - which is likely to show a further slowdown. Next support 71.155 is at risk but the 71 handle should continue to hold amid global trade uncertainties and domestic weakness.

Data/Events Highlights:

Wednesday was quiet in Asia in data terms.

Data/Events Ahead:

Another quiet day in Asia today in data terms, but South Korea's October IP will be released early on Friday - we expect a deceleration of 3.2% y/y from mild gains of 0.4% y/y in the last month.

DATA RELEASES DUE TODAY

23:50 GMT / 07:50 SGT - JP: Retail Sales (Oct) [Mkt: -10.5, Prev: 7.1]

23:50 GMT / 07:50 SGT - JP: Retail Sales (Oct) 4cast: -7.1% y/y [Mkt: -4.3, Prev: 9.1]

00:00 GMT / 08:00 SGT - NZ: ANZ Business Confidence (Nov) [Prev: -42.4]

00:30 GMT / 08:30 SGT - AU: Private Capital Expenditure (Q3) 4cast: -0.2% q/q [Mkt: 0, Prev: -0.5]

09:00 GMT / 17:00 SGT - EU: M3 Money Supply (sa) (Oct) [Mkt: 5.5, Prev: 5.5]

10:00 GMT / 18:00 SGT - EU: Consumer Confidence (Nov Final) [Prev: -7.2]

10:00 GMT / 18:00 SGT - EU: Economic Confidence (Nov) [Mkt: 101, Prev: 100.8]

13:30 GMT / 21:30 SGT - CA: Current Account Balance (Q3) [Mkt: -10, Prev: -6.38]

21:45 GMT / 05:45 SGT - NZ: Building Permits (Oct) [Prev: 7.2]

23:00 GMT / 07:00 SGT - KR: Industrial Production (Oct) 4cast: -3.2% y/y [Mkt: -3.1, Prev: 0.4]

23:30 GMT / 07:30 SGT - JP: Job-to-Applicant Ratio (Oct) [Mkt: 1.56, Prev: 1.57]

23:30 GMT / 07:30 SGT - JP: Unemployment (Oct) 4cast: 2.4% [Mkt: 2.4, Prev: 2.4]

23:50 GMT / 07:50 SGT - JP: Industrial Production (Oct P) [Mkt: -2, Prev: 1.7]

23:50 GMT / 07:50 SGT - JP: Industrial Production (Oct P) 4cast: -2.5% y/y [Mkt: -5.2, Prev: 1.3]

EVENTS & AUCTIONS

- US: Market Holiday - Thanksgiving


Forex - Asia Open - Overnight Highlights


 23:43 (GMT) 27 Nov

 [Forex Highlights]

Asia Overnight Highlights - 28 Nov 2019

MAJORS

FX Highlights:

The Bloomberg dollar spot index was supported by upbeat economic data even as trade news started to get the pair fatigued. A strong initial round of US data (durables, GDP and initial claims) saw EUR/USD dip below 1.10 though subsequent data was less impressive helping the pair to stabilize. Continued optimism on a US-China trade deal pushed USD/JPY above 109.50.

But President Trump signed a bill in late NY/early Asian hours in support of HK protestors which saw risk aversion creep in as well. USD/JPY dropped to 109.35 and AUD/JPY slid from 74.295 highs to 73.913.

The EUR was soft despite better than expected French November consumer confidence data - the strongest since June 2017 and the second strongest since the GFC, though Italian business and consumer confidence were both weaker than expected.

GBP may have benefitted from a perception that Labour's electoral prospects will have been harmed by an interview with leader Corbyn screened on Tuesday night. Gains extended on talk that an upcoming closely watched poll from YouGov MRP would show a comfortable Conservative majority, pushing GBP/USD above 1.29.

Commodity currencies saw some support from strength in equities but eventually the firm USD tone make its mark. An AUD recovery in Europe only corrected losses seen in Asia, and a USD/CAD dip to the lowest level since last week failed to hold.

Data/Events Highlights:

- US Q3 GDP revised to 2.1% from 1.9% vs 1.9% exp.

- US Nov durable goods orders +0.6% vs -0.9% exp, ex transport +0.6% vs +0.1% exp.

- US initial claims fell to 213k from 228k vs 221k exp.

- US Nov Chicago PMI rose to 46.3 from 43.2 vs 47.0 exp.

- US Oct pending home sales -1.7% vs +0.2% exp.

- US Oct personal income 0.0% vs +0.3% exp, spending +0.3% as exp, core PCE prices +0.1% as exp.

- VIX index: 11.75 (+1.82%)

- Gold Spot: $1,457.15/oz (+0.19%)

- ICE Brent front contract: $64.06 ($-0.21)

- Nymex WTI front contract: $58.01 ($-0.10)

- Reuters/Jefferies Commodities Index: 180.35 (-0.42%)

- 10y UST: 1.765% (+2bp) (Asia morning)

- DJI: 28,164.00 (+0.15%); S&P: 3,153.63 (+0.42%); Nasdaq: 8,705.18 (+0.66%)

Data/Events Ahead:

It is the Thanksgiving holiday in the U.S., so a quiet move to the weekend. Equity and bond markets will be closed.

Japan's October retail sales will provide further clue on the impact of sales tax hike. We expect retails sales to fall back by about 7.1% y/y in October after last-minute demand pushed sales higher in September.

Australia's private capital expenditure will also be released.

EMERGING ASIA

FX Highlights:

A mixed day for Asian currencies amid dollar strength and trade optimism. MYR (+0.29%) and INR (+0.20%) were the biggest winners. MYR strengthened following optimism from the Malaysian government on Q4 GDP. INR gained due to sustained hopes of domestic reforms. PHP and CNY were both up 0.20% and 0.07% respectively. However, THB (-0.11%), KRW (-0.10%) and SGD (-0.08%) were in mild losses.

USD/CNH was seen trading on either side of 7.0200 on Wednesday before a surge to 7.0300 levels early this morning after President Trump signed the HK support bill. However, pair remains within the 7.0000-7.1000 range for now. We see this pattern continuing. Onshore spot USD/CNY remained slightly lower on Wednesday and traded around 7.0250 in the day, but may likely target the upper end of recent range at 7.0450. 1Y NDF broke above 7.1000 handle on HK news after trading closer to 7.0950 on Wednesday.

USD/SGD re-tested the upside at 1.3665 resistance on Wednesday but reversed later towards 1.3650. Pair however saw upside pressures early this morning on reports of President Trump signing the HK bill, which may pressures trade talks as well and instigate a response from the Chine side. Pair last seen close to 1.3660. Eyes will be on the 1.3675 resistance. If broken, we will turn our attention to the 1.3721 resistance next.

USD/IDR 1M NDFs traded horizontally around 14140 on Wednesday. USD/IDR onshore spot remained close to Tuesday's close of 14088 in early trading on Wednesday, although some gains to 14103 were seen in the afternoon, with possible BI capping further gains. The continued rhetoric around the U.S./China phase 1 trade deal is helping to revive sentiments, but investors are now fatigued and await real developments. We believe the pair remains fragile amid trade risks and a widening budget deficit at home. Support at 14050 not at risk and upside pressures are likely to return. We continue to see a risk of another move towards 14110 resistance, but expect BI to limit gains above that.

USD/INR 1M NDFs continued to trade with a bearish bias on Wednesday, and slid below 71.500 in late NY. USD/INR onshore spot also saw a bearish bias on Wednesday amid sustained hopes of domestic reforms. Pair broke the 71.545 support into the close on Tuesday and was seen printing fresh 2.5-week lows of 71.2950 in the afternoon. The U.S./China trade talks are also still ongoing, and Q3 2019 GDP growth data will be released at the end of the week - which is likely to show a further slowdown. Next support 71.155 is at risk but the 71 handle should continue to hold amid global trade uncertainties and domestic weakness.

Data/Events Highlights:

Wednesday was quiet in Asia in data terms.

Data/Events Ahead:

Another quiet day in Asia today in data terms, but South Korea's October IP will be released early on Friday - we expect a deceleration of 3.2% y/y from mild gains of 0.4% y/y in the last month.

DATA RELEASES DUE TODAY

23:50 GMT / 07:50 SGT - JP: Retail Sales (Oct) [Mkt: -10.5, Prev: 7.1]

23:50 GMT / 07:50 SGT - JP: Retail Sales (Oct) 4cast: -7.1% y/y [Mkt: -4.3, Prev: 9.1]

00:00 GMT / 08:00 SGT - NZ: ANZ Business Confidence (Nov) [Prev: -42.4]

00:30 GMT / 08:30 SGT - AU: Private Capital Expenditure (Q3) 4cast: -0.2% q/q [Mkt: 0, Prev: -0.5]

09:00 GMT / 17:00 SGT - EU: M3 Money Supply (sa) (Oct) [Mkt: 5.5, Prev: 5.5]

10:00 GMT / 18:00 SGT - EU: Consumer Confidence (Nov Final) [Prev: -7.2]

10:00 GMT / 18:00 SGT - EU: Economic Confidence (Nov) [Mkt: 101, Prev: 100.8]

13:30 GMT / 21:30 SGT - CA: Current Account Balance (Q3) [Mkt: -10, Prev: -6.38]

21:45 GMT / 05:45 SGT - NZ: Building Permits (Oct) [Prev: 7.2]

23:00 GMT / 07:00 SGT - KR: Industrial Production (Oct) 4cast: -3.2% y/y [Mkt: -3.1, Prev: 0.4]

23:30 GMT / 07:30 SGT - JP: Job-to-Applicant Ratio (Oct) [Mkt: 1.56, Prev: 1.57]

23:30 GMT / 07:30 SGT - JP: Unemployment (Oct) 4cast: 2.4% [Mkt: 2.4, Prev: 2.4]

23:50 GMT / 07:50 SGT - JP: Industrial Production (Oct P) [Mkt: -2, Prev: 1.7]

23:50 GMT / 07:50 SGT - JP: Industrial Production (Oct P) 4cast: -2.5% y/y [Mkt: -5.2, Prev: 1.3]

EVENTS & AUCTIONS

- US: Market Holiday - Thanksgiving


Forex - Asia Open - Overnight Highlights


 23:43 (GMT) 27 Nov

 [Forex Highlights]

Asia Overnight Highlights - 28 Nov 2019

MAJORS

FX Highlights:

The Bloomberg dollar spot index was supported by upbeat economic data even as trade news started to get the pair fatigued. A strong initial round of US data (durables, GDP and initial claims) saw EUR/USD dip below 1.10 though subsequent data was less impressive helping the pair to stabilize. Continued optimism on a US-China trade deal pushed USD/JPY above 109.50.

But President Trump signed a bill in late NY/early Asian hours in support of HK protestors which saw risk aversion creep in as well. USD/JPY dropped to 109.35 and AUD/JPY slid from 74.295 highs to 73.913.

The EUR was soft despite better than expected French November consumer confidence data - the strongest since June 2017 and the second strongest since the GFC, though Italian business and consumer confidence were both weaker than expected.

GBP may have benefitted from a perception that Labour's electoral prospects will have been harmed by an interview with leader Corbyn screened on Tuesday night. Gains extended on talk that an upcoming closely watched poll from YouGov MRP would show a comfortable Conservative majority, pushing GBP/USD above 1.29.

Commodity currencies saw some support from strength in equities but eventually the firm USD tone make its mark. An AUD recovery in Europe only corrected losses seen in Asia, and a USD/CAD dip to the lowest level since last week failed to hold.

Data/Events Highlights:

- US Q3 GDP revised to 2.1% from 1.9% vs 1.9% exp.

- US Nov durable goods orders +0.6% vs -0.9% exp, ex transport +0.6% vs +0.1% exp.

- US initial claims fell to 213k from 228k vs 221k exp.

- US Nov Chicago PMI rose to 46.3 from 43.2 vs 47.0 exp.

- US Oct pending home sales -1.7% vs +0.2% exp.

- US Oct personal income 0.0% vs +0.3% exp, spending +0.3% as exp, core PCE prices +0.1% as exp.

- VIX index: 11.75 (+1.82%)

- Gold Spot: $1,457.15/oz (+0.19%)

- ICE Brent front contract: $64.06 ($-0.21)

- Nymex WTI front contract: $58.01 ($-0.10)

- Reuters/Jefferies Commodities Index: 180.35 (-0.42%)

- 10y UST: 1.765% (+2bp) (Asia morning)

- DJI: 28,164.00 (+0.15%); S&P: 3,153.63 (+0.42%); Nasdaq: 8,705.18 (+0.66%)

Data/Events Ahead:

It is the Thanksgiving holiday in the U.S., so a quiet move to the weekend. Equity and bond markets will be closed.

Japan's October retail sales will provide further clue on the impact of sales tax hike. We expect retails sales to fall back by about 7.1% y/y in October after last-minute demand pushed sales higher in September.

Australia's private capital expenditure will also be released.

EMERGING ASIA

FX Highlights:

A mixed day for Asian currencies amid dollar strength and trade optimism. MYR (+0.29%) and INR (+0.20%) were the biggest winners. MYR strengthened following optimism from the Malaysian government on Q4 GDP. INR gained due to sustained hopes of domestic reforms. PHP and CNY were both up 0.20% and 0.07% respectively. However, THB (-0.11%), KRW (-0.10%) and SGD (-0.08%) were in mild losses.

USD/CNH was seen trading on either side of 7.0200 on Wednesday before a surge to 7.0300 levels early this morning after President Trump signed the HK support bill. However, pair remains within the 7.0000-7.1000 range for now. We see this pattern continuing. Onshore spot USD/CNY remained slightly lower on Wednesday and traded around 7.0250 in the day, but may likely target the upper end of recent range at 7.0450. 1Y NDF broke above 7.1000 handle on HK news after trading closer to 7.0950 on Wednesday.

USD/SGD re-tested the upside at 1.3665 resistance on Wednesday but reversed later towards 1.3650. Pair however saw upside pressures early this morning on reports of President Trump signing the HK bill, which may pressures trade talks as well and instigate a response from the Chine side. Pair last seen close to 1.3660. Eyes will be on the 1.3675 resistance. If broken, we will turn our attention to the 1.3721 resistance next.

USD/IDR 1M NDFs traded horizontally around 14140 on Wednesday. USD/IDR onshore spot remained close to Tuesday's close of 14088 in early trading on Wednesday, although some gains to 14103 were seen in the afternoon, with possible BI capping further gains. The continued rhetoric around the U.S./China phase 1 trade deal is helping to revive sentiments, but investors are now fatigued and await real developments. We believe the pair remains fragile amid trade risks and a widening budget deficit at home. Support at 14050 not at risk and upside pressures are likely to return. We continue to see a risk of another move towards 14110 resistance, but expect BI to limit gains above that.

USD/INR 1M NDFs continued to trade with a bearish bias on Wednesday, and slid below 71.500 in late NY. USD/INR onshore spot also saw a bearish bias on Wednesday amid sustained hopes of domestic reforms. Pair broke the 71.545 support into the close on Tuesday and was seen printing fresh 2.5-week lows of 71.2950 in the afternoon. The U.S./China trade talks are also still ongoing, and Q3 2019 GDP growth data will be released at the end of the week - which is likely to show a further slowdown. Next support 71.155 is at risk but the 71 handle should continue to hold amid global trade uncertainties and domestic weakness.

Data/Events Highlights:

Wednesday was quiet in Asia in data terms.

Data/Events Ahead:

Another quiet day in Asia today in data terms, but South Korea's October IP will be released early on Friday - we expect a deceleration of 3.2% y/y from mild gains of 0.4% y/y in the last month.

DATA RELEASES DUE TODAY

23:50 GMT / 07:50 SGT - JP: Retail Sales (Oct) [Mkt: -10.5, Prev: 7.1]

23:50 GMT / 07:50 SGT - JP: Retail Sales (Oct) 4cast: -7.1% y/y [Mkt: -4.3, Prev: 9.1]

00:00 GMT / 08:00 SGT - NZ: ANZ Business Confidence (Nov) [Prev: -42.4]

00:30 GMT / 08:30 SGT - AU: Private Capital Expenditure (Q3) 4cast: -0.2% q/q [Mkt: 0, Prev: -0.5]

09:00 GMT / 17:00 SGT - EU: M3 Money Supply (sa) (Oct) [Mkt: 5.5, Prev: 5.5]

10:00 GMT / 18:00 SGT - EU: Consumer Confidence (Nov Final) [Prev: -7.2]

10:00 GMT / 18:00 SGT - EU: Economic Confidence (Nov) [Mkt: 101, Prev: 100.8]

13:30 GMT / 21:30 SGT - CA: Current Account Balance (Q3) [Mkt: -10, Prev: -6.38]

21:45 GMT / 05:45 SGT - NZ: Building Permits (Oct) [Prev: 7.2]

23:00 GMT / 07:00 SGT - KR: Industrial Production (Oct) 4cast: -3.2% y/y [Mkt: -3.1, Prev: 0.4]

23:30 GMT / 07:30 SGT - JP: Job-to-Applicant Ratio (Oct) [Mkt: 1.56, Prev: 1.57]

23:30 GMT / 07:30 SGT - JP: Unemployment (Oct) 4cast: 2.4% [Mkt: 2.4, Prev: 2.4]

23:50 GMT / 07:50 SGT - JP: Industrial Production (Oct P) [Mkt: -2, Prev: 1.7]

23:50 GMT / 07:50 SGT - JP: Industrial Production (Oct P) 4cast: -2.5% y/y [Mkt: -5.2, Prev: 1.3]

EVENTS & AUCTIONS

- US: Market Holiday - Thanksgiving


Forex - Asia Open - Overnight Highlights


 23:43 (GMT) 27 Nov

 [Forex Highlights]

Asia Overnight Highlights - 28 Nov 2019

MAJORS

FX Highlights:

The Bloomberg dollar spot index was supported by upbeat economic data even as trade news started to get the pair fatigued. A strong initial round of US data (durables, GDP and initial claims) saw EUR/USD dip below 1.10 though subsequent data was less impressive helping the pair to stabilize. Continued optimism on a US-China trade deal pushed USD/JPY above 109.50.

But President Trump signed a bill in late NY/early Asian hours in support of HK protestors which saw risk aversion creep in as well. USD/JPY dropped to 109.35 and AUD/JPY slid from 74.295 highs to 73.913.

The EUR was soft despite better than expected French November consumer confidence data - the strongest since June 2017 and the second strongest since the GFC, though Italian business and consumer confidence were both weaker than expected.

GBP may have benefitted from a perception that Labour's electoral prospects will have been harmed by an interview with leader Corbyn screened on Tuesday night. Gains extended on talk that an upcoming closely watched poll from YouGov MRP would show a comfortable Conservative majority, pushing GBP/USD above 1.29.

Commodity currencies saw some support from strength in equities but eventually the firm USD tone make its mark. An AUD recovery in Europe only corrected losses seen in Asia, and a USD/CAD dip to the lowest level since last week failed to hold.

Data/Events Highlights:

- US Q3 GDP revised to 2.1% from 1.9% vs 1.9% exp.

- US Nov durable goods orders +0.6% vs -0.9% exp, ex transport +0.6% vs +0.1% exp.

- US initial claims fell to 213k from 228k vs 221k exp.

- US Nov Chicago PMI rose to 46.3 from 43.2 vs 47.0 exp.

- US Oct pending home sales -1.7% vs +0.2% exp.

- US Oct personal income 0.0% vs +0.3% exp, spending +0.3% as exp, core PCE prices +0.1% as exp.

- VIX index: 11.75 (+1.82%)

- Gold Spot: $1,457.15/oz (+0.19%)

- ICE Brent front contract: $64.06 ($-0.21)

- Nymex WTI front contract: $58.01 ($-0.10)

- Reuters/Jefferies Commodities Index: 180.35 (-0.42%)

- 10y UST: 1.765% (+2bp) (Asia morning)

- DJI: 28,164.00 (+0.15%); S&P: 3,153.63 (+0.42%); Nasdaq: 8,705.18 (+0.66%)

Data/Events Ahead:

It is the Thanksgiving holiday in the U.S., so a quiet move to the weekend. Equity and bond markets will be closed.

Japan's October retail sales will provide further clue on the impact of sales tax hike. We expect retails sales to fall back by about 7.1% y/y in October after last-minute demand pushed sales higher in September.

Australia's private capital expenditure will also be released.

EMERGING ASIA

FX Highlights:

A mixed day for Asian currencies amid dollar strength and trade optimism. MYR (+0.29%) and INR (+0.20%) were the biggest winners. MYR strengthened following optimism from the Malaysian government on Q4 GDP. INR gained due to sustained hopes of domestic reforms. PHP and CNY were both up 0.20% and 0.07% respectively. However, THB (-0.11%), KRW (-0.10%) and SGD (-0.08%) were in mild losses.

USD/CNH was seen trading on either side of 7.0200 on Wednesday before a surge to 7.0300 levels early this morning after President Trump signed the HK support bill. However, pair remains within the 7.0000-7.1000 range for now. We see this pattern continuing. Onshore spot USD/CNY remained slightly lower on Wednesday and traded around 7.0250 in the day, but may likely target the upper end of recent range at 7.0450. 1Y NDF broke above 7.1000 handle on HK news after trading closer to 7.0950 on Wednesday.

USD/SGD re-tested the upside at 1.3665 resistance on Wednesday but reversed later towards 1.3650. Pair however saw upside pressures early this morning on reports of President Trump signing the HK bill, which may pressures trade talks as well and instigate a response from the Chine side. Pair last seen close to 1.3660. Eyes will be on the 1.3675 resistance. If broken, we will turn our attention to the 1.3721 resistance next.

USD/IDR 1M NDFs traded horizontally around 14140 on Wednesday. USD/IDR onshore spot remained close to Tuesday's close of 14088 in early trading on Wednesday, although some gains to 14103 were seen in the afternoon, with possible BI capping further gains. The continued rhetoric around the U.S./China phase 1 trade deal is helping to revive sentiments, but investors are now fatigued and await real developments. We believe the pair remains fragile amid trade risks and a widening budget deficit at home. Support at 14050 not at risk and upside pressures are likely to return. We continue to see a risk of another move towards 14110 resistance, but expect BI to limit gains above that.

USD/INR 1M NDFs continued to trade with a bearish bias on Wednesday, and slid below 71.500 in late NY. USD/INR onshore spot also saw a bearish bias on Wednesday amid sustained hopes of domestic reforms. Pair broke the 71.545 support into the close on Tuesday and was seen printing fresh 2.5-week lows of 71.2950 in the afternoon. The U.S./China trade talks are also still ongoing, and Q3 2019 GDP growth data will be released at the end of the week - which is likely to show a further slowdown. Next support 71.155 is at risk but the 71 handle should continue to hold amid global trade uncertainties and domestic weakness.

Data/Events Highlights:

Wednesday was quiet in Asia in data terms.

Data/Events Ahead:

Another quiet day in Asia today in data terms, but South Korea's October IP will be released early on Friday - we expect a deceleration of 3.2% y/y from mild gains of 0.4% y/y in the last month.

DATA RELEASES DUE TODAY

23:50 GMT / 07:50 SGT - JP: Retail Sales (Oct) [Mkt: -10.5, Prev: 7.1]

23:50 GMT / 07:50 SGT - JP: Retail Sales (Oct) 4cast: -7.1% y/y [Mkt: -4.3, Prev: 9.1]

00:00 GMT / 08:00 SGT - NZ: ANZ Business Confidence (Nov) [Prev: -42.4]

00:30 GMT / 08:30 SGT - AU: Private Capital Expenditure (Q3) 4cast: -0.2% q/q [Mkt: 0, Prev: -0.5]

09:00 GMT / 17:00 SGT - EU: M3 Money Supply (sa) (Oct) [Mkt: 5.5, Prev: 5.5]

10:00 GMT / 18:00 SGT - EU: Consumer Confidence (Nov Final) [Prev: -7.2]

10:00 GMT / 18:00 SGT - EU: Economic Confidence (Nov) [Mkt: 101, Prev: 100.8]

13:30 GMT / 21:30 SGT - CA: Current Account Balance (Q3) [Mkt: -10, Prev: -6.38]

21:45 GMT / 05:45 SGT - NZ: Building Permits (Oct) [Prev: 7.2]

23:00 GMT / 07:00 SGT - KR: Industrial Production (Oct) 4cast: -3.2% y/y [Mkt: -3.1, Prev: 0.4]

23:30 GMT / 07:30 SGT - JP: Job-to-Applicant Ratio (Oct) [Mkt: 1.56, Prev: 1.57]

23:30 GMT / 07:30 SGT - JP: Unemployment (Oct) 4cast: 2.4% [Mkt: 2.4, Prev: 2.4]

23:50 GMT / 07:50 SGT - JP: Industrial Production (Oct P) [Mkt: -2, Prev: 1.7]

23:50 GMT / 07:50 SGT - JP: Industrial Production (Oct P) 4cast: -2.5% y/y [Mkt: -5.2, Prev: 1.3]

EVENTS & AUCTIONS

- US: Market Holiday - Thanksgiving


Forex - China Flows: USD/CNH not much affected by industrial profits' weak print


 03:32 (GMT) 27 Nov

 [Forex Flows]

USD/CNH saw a low of 7.0091 on Tuesday NY session but now it is back to recovery to 7.0225 last. This stemmed from optimism on US-China trade. A move below the 7.0000 handle will be market moving in our view, shifting attention to the 6.9000+ ranges. China's industrial profits fell 9.9% y/y in October, much weaker than -5.3% in September. This was not significant in shifting USD/CNH

PBoC fixed mid-point at 7.0322 vs. previous close of 7.0349. USD/CNY gapped lower and last at 7.0280. 1Y NDF last at 7.0957.


Forex - Asia Open - Overnight Highlights


 23:46 (GMT) 26 Nov

 [Forex Highlights]

Asia Overnight Highlights - 27 Nov 2019

MAJORS

FX Highlights:

The Bloomberg dollar spot index appeared fatigued of the U.S./China trade news on Tuesday and softened slightly to sub-98.300 levels in NY.

Positive trade sentiment was helped by remarks by White House's Conway, saying the US and China were close to agreeing a phase 1 deal, though sticking points remained. Trump later expressed a similar view. This saw USD/JPY as high as 109.19.

A slow news morning in Europe saw some weakness in GBP, based on the two most recent opinion polls from Kantar and ICM research showing a narrowing in the Conservative lead over Labour, with the ICM poll showing Labour on 34% - the highest since April.

EUR/USD kept to a tight range above 1.10. The German Gfk consumer climate survey was a tick stronger than expected but in line with the stable trend in the second half of the year. US data was on balance stronger than expected, with a narrower trade deficit and stronger than expected new home sales outweighing disappointment on consumer confidence.

AUD/USD saw brief gains on a speech from RBA governor Lowe, who ruled out QE until or unless rates fell to 0.25% from the current 0.75%. While the initial gains of around 20 pips were reversed, commodity currencies gained a positive tone later in the day due to improved trade sentiment, CAD outperforming AUD.

Data/Events Highlights:

- US advance Oct trade deficit fell to $66.5bn from $70.5bn vs $71.0bn exp.

- US Nov consumer confidence fell to 125.5 from 126.1 vs 127.0 exp.

- US Oct new home sales -0.7% to 733k vs 705k exp.

- VIX index: 11.54 (-2.78%)

- Gold Spot: $1,461.78/oz (+0.03%)

- ICE Brent front contract: $64.27 (+$0.62)

- Nymex WTI front contract: $58.22 ($-0.19)

- Reuters/Jefferies Commodities Index: 181.10 (+0.29%)

- 10y UST: 1.741% (-1bp) (Asia morning)

- DJI: 28,121.68 (+0.20%); S&P: 3,140.52 (+0.22%); Nasdaq: 8,647.93 (+0.18%)

Data/Events Ahead:

A bunch of U.S. data is scheduled for release as Thursday is the Thanksgiving holiday - including GDP, jobless claims, durable goods, personal income/spending. We expect a 0.3% decline in Oct durable goods orders with a marginal 0.1% increase ex transport. The preliminary (second) estimate of Q3 GDP is due, and we expect an unrevised 1.9% pace. We also expect a 0.2% increase in Oct's core PCE price index, a 0.3% rise in Oct personal income, and a 0.2% rise in Oct personal spending.

EMERGING ASIA

FX Highlights:

Asian currencies were mixed on Tuesday as dollar continued to strengthen following Fed's Powel optimistic tone on the U.S. economy but trade optimism also persisted. PHP was the biggest loser down 0.26% against the dollar. MYR was down 0.12% as well against the greenback. INR was the biggest winner on the other hand, up 0.33% against the dollar amid gains in domestic equities after the ArcellorMittal's takeover of a steel mill. CNH (+0.24%), THB (+0.07%) and SGD (+0.05%) also remained in gains.

USD/CNH traded mixed on Tuesday, rising to 7.0400+ levels earlier but dropping quickly and sharply to 7.0091 lows in the NY session. However, pair remains within the 7.0000-7.1000 range for now. We see this pattern continuing. Onshore spot USD/CNY similarly rose to intraday highs of 7.0420 in the afternoon before a plunge back to 7.0300-levels into the close - not as deep as the offshore yuan. If trade hope continues to support, USD/CNY may return to trade at 7.0000 level. 1Y NDF printed lows of 7.0874 in Tuesday's NY session and traded horizontally around 7.0925 subsequently.

USD/SGD printed 5-week highs of 1.3667 in late Asian/early European hours on Tuesday but pared all of these gains and was seen back at sub-1.3650 levels in the NY hours. Singapore's October industrial production beat market expectations and rose to 4.0% y/y from a revised 0.7% y/y in September. Following the break above the 1.3664 resistance, we will turn our attention to the 1.3675 resistance next.

USD/IDR 1M NDFs touched highs of 14161 early in the NY session but pared the gains and was seen back at 14130-levels into NY close. USD/IDR onshore spot remained below 14090 mostly on Tuesday after hitting 14100+ levels last week. The improved optimism around the U.S./China phase 1 trade deal is helping to revive sentiments, but we believe the pair is still fragile amid trade risks and a widening budget deficit at home. Support at 14050 not at risk and upside pressures are likely to return. We continue to see a risk of another move towards 14110 resistance, but expect BI to limit gains above that.

USD/INR 1M NDFs traded with a steady downside bias on Tuesday, defying market pressures, and was seen at 71.600 lows in NY. USD/INR onshore spot gapped slightly lower to open at 71.680 on Tuesday from previous close of 71.725 and traded to fresh 2.5-week lows of 71.475 in the afternoon. Optimism around the labor reform is still mixed, but stronger chances could boost the rupee. The U.S./China trade talks are also still ongoing, and Q3 2019 GDP growth data will be released at the end of the week - which is likely to show a further slowdown. Break below the 71.545 support is still looking fragile, and the 71 handle should still hold amid global trade uncertainties and domestic weakness.

Data/Events Highlights:

Singapore's October industrial production beat market expectations and rose to 4.0% y/y from a revised 0.7% y/y in September.

Data/Events Ahead:

No key data is reported in Asia on Wednesday.

DATA RELEASES DUE TODAY

00:30 GMT / 08:30 SGT - AU: Construction Work Done (Q3) 4cast: -1.5% q/q [Mkt: -1, Prev: -3.8]

13:30 GMT / 21:30 SGT - US: GDP Annualized (3Q S) 4cast: 1.9% q/q ann [Mkt: 1.9, Prev: 1.9]

13:30 GMT / 21:30 SGT - US: Initial Claims (Nov 23) [Mkt: 221, Prev: 227]

13:30 GMT / 21:30 SGT - US: Core PCE Price Index (3Q S) 4cast: 2.2% q/q ann [Mkt: 2.2, Prev: 2.2]

13:30 GMT / 21:30 SGT - US: Durable Ex Transportation (Oct P) 4cast: 0.1% m/m [Mkt: 0.1, Prev: -0.4]

13:30 GMT / 21:30 SGT - US: Durable Goods Orders (Oct P) 4cast: -0.3% m/m [Mkt: -0.8, Prev: -1.2]

14:45 GMT / 22:45 SGT - US: Chicago PMI (Nov) [Mkt: 47.1, Prev: 43.2]

15:00 GMT / 23:00 SGT - US: Pending Home Sales (Oct) [Mkt: -0.2, Prev: 1.5]

15:00 GMT / 23:00 SGT - US: Personal spending (Oct) 4cast: 0.2% m/m [Mkt: 0.2, Prev: 0.2]

15:00 GMT / 23:00 SGT - US: Personal income (Oct) 4cast: 0.3% m/m [Mkt: 0.3, Prev: 0.3]

15:00 GMT / 23:00 SGT - US: Core PCE Price Index (Oct) 4cast: 0.2% m/m [Mkt: 0.3, Prev: 0]

23:50 GMT / 07:50 SGT - JP: Retail Sales (Oct) [Mkt: -10.5, Prev: 7.1]

23:50 GMT / 07:50 SGT - JP: Retail Sales (Oct) 4cast: -7.1% y/y [Mkt: -4.3, Prev: 9.1]

EVENTS & AUCTIONS

18:00 GMT / 02:00 SGT - US: 7 year auction

19:00 GMT / 03:00 SGT - US: Fed Beige Book


Forex - Asia Open - Overnight Highlights


 23:46 (GMT) 26 Nov

 [Forex Highlights]

Asia Overnight Highlights - 27 Nov 2019

MAJORS

FX Highlights:

The Bloomberg dollar spot index appeared fatigued of the U.S./China trade news on Tuesday and softened slightly to sub-98.300 levels in NY.

Positive trade sentiment was helped by remarks by White House's Conway, saying the US and China were close to agreeing a phase 1 deal, though sticking points remained. Trump later expressed a similar view. This saw USD/JPY as high as 109.19.

A slow news morning in Europe saw some weakness in GBP, based on the two most recent opinion polls from Kantar and ICM research showing a narrowing in the Conservative lead over Labour, with the ICM poll showing Labour on 34% - the highest since April.

EUR/USD kept to a tight range above 1.10. The German Gfk consumer climate survey was a tick stronger than expected but in line with the stable trend in the second half of the year. US data was on balance stronger than expected, with a narrower trade deficit and stronger than expected new home sales outweighing disappointment on consumer confidence.

AUD/USD saw brief gains on a speech from RBA governor Lowe, who ruled out QE until or unless rates fell to 0.25% from the current 0.75%. While the initial gains of around 20 pips were reversed, commodity currencies gained a positive tone later in the day due to improved trade sentiment, CAD outperforming AUD.

Data/Events Highlights:

- US advance Oct trade deficit fell to $66.5bn from $70.5bn vs $71.0bn exp.

- US Nov consumer confidence fell to 125.5 from 126.1 vs 127.0 exp.

- US Oct new home sales -0.7% to 733k vs 705k exp.

- VIX index: 11.54 (-2.78%)

- Gold Spot: $1,461.78/oz (+0.03%)

- ICE Brent front contract: $64.27 (+$0.62)

- Nymex WTI front contract: $58.22 ($-0.19)

- Reuters/Jefferies Commodities Index: 181.10 (+0.29%)

- 10y UST: 1.741% (-1bp) (Asia morning)

- DJI: 28,121.68 (+0.20%); S&P: 3,140.52 (+0.22%); Nasdaq: 8,647.93 (+0.18%)

Data/Events Ahead:

A bunch of U.S. data is scheduled for release as Thursday is the Thanksgiving holiday - including GDP, jobless claims, durable goods, personal income/spending. We expect a 0.3% decline in Oct durable goods orders with a marginal 0.1% increase ex transport. The preliminary (second) estimate of Q3 GDP is due, and we expect an unrevised 1.9% pace. We also expect a 0.2% increase in Oct's core PCE price index, a 0.3% rise in Oct personal income, and a 0.2% rise in Oct personal spending.

EMERGING ASIA

FX Highlights:

Asian currencies were mixed on Tuesday as dollar continued to strengthen following Fed's Powel optimistic tone on the U.S. economy but trade optimism also persisted. PHP was the biggest loser down 0.26% against the dollar. MYR was down 0.12% as well against the greenback. INR was the biggest winner on the other hand, up 0.33% against the dollar amid gains in domestic equities after the ArcellorMittal's takeover of a steel mill. CNH (+0.24%), THB (+0.07%) and SGD (+0.05%) also remained in gains.

USD/CNH traded mixed on Tuesday, rising to 7.0400+ levels earlier but dropping quickly and sharply to 7.0091 lows in the NY session. However, pair remains within the 7.0000-7.1000 range for now. We see this pattern continuing. Onshore spot USD/CNY similarly rose to intraday highs of 7.0420 in the afternoon before a plunge back to 7.0300-levels into the close - not as deep as the offshore yuan. If trade hope continues to support, USD/CNY may return to trade at 7.0000 level. 1Y NDF printed lows of 7.0874 in Tuesday's NY session and traded horizontally around 7.0925 subsequently.

USD/SGD printed 5-week highs of 1.3667 in late Asian/early European hours on Tuesday but pared all of these gains and was seen back at sub-1.3650 levels in the NY hours. Singapore's October industrial production beat market expectations and rose to 4.0% y/y from a revised 0.7% y/y in September. Following the break above the 1.3664 resistance, we will turn our attention to the 1.3675 resistance next.

USD/IDR 1M NDFs touched highs of 14161 early in the NY session but pared the gains and was seen back at 14130-levels into NY close. USD/IDR onshore spot remained below 14090 mostly on Tuesday after hitting 14100+ levels last week. The improved optimism around the U.S./China phase 1 trade deal is helping to revive sentiments, but we believe the pair is still fragile amid trade risks and a widening budget deficit at home. Support at 14050 not at risk and upside pressures are likely to return. We continue to see a risk of another move towards 14110 resistance, but expect BI to limit gains above that.

USD/INR 1M NDFs traded with a steady downside bias on Tuesday, defying market pressures, and was seen at 71.600 lows in NY. USD/INR onshore spot gapped slightly lower to open at 71.680 on Tuesday from previous close of 71.725 and traded to fresh 2.5-week lows of 71.475 in the afternoon. Optimism around the labor reform is still mixed, but stronger chances could boost the rupee. The U.S./China trade talks are also still ongoing, and Q3 2019 GDP growth data will be released at the end of the week - which is likely to show a further slowdown. Break below the 71.545 support is still looking fragile, and the 71 handle should still hold amid global trade uncertainties and domestic weakness.

Data/Events Highlights:

Singapore's October industrial production beat market expectations and rose to 4.0% y/y from a revised 0.7% y/y in September.

Data/Events Ahead:

No key data is reported in Asia on Wednesday.

DATA RELEASES DUE TODAY

00:30 GMT / 08:30 SGT - AU: Construction Work Done (Q3) 4cast: -1.5% q/q [Mkt: -1, Prev: -3.8]

13:30 GMT / 21:30 SGT - US: GDP Annualized (3Q S) 4cast: 1.9% q/q ann [Mkt: 1.9, Prev: 1.9]

13:30 GMT / 21:30 SGT - US: Initial Claims (Nov 23) [Mkt: 221, Prev: 227]

13:30 GMT / 21:30 SGT - US: Core PCE Price Index (3Q S) 4cast: 2.2% q/q ann [Mkt: 2.2, Prev: 2.2]

13:30 GMT / 21:30 SGT - US: Durable Ex Transportation (Oct P) 4cast: 0.1% m/m [Mkt: 0.1, Prev: -0.4]

13:30 GMT / 21:30 SGT - US: Durable Goods Orders (Oct P) 4cast: -0.3% m/m [Mkt: -0.8, Prev: -1.2]

14:45 GMT / 22:45 SGT - US: Chicago PMI (Nov) [Mkt: 47.1, Prev: 43.2]

15:00 GMT / 23:00 SGT - US: Pending Home Sales (Oct) [Mkt: -0.2, Prev: 1.5]

15:00 GMT / 23:00 SGT - US: Personal spending (Oct) 4cast: 0.2% m/m [Mkt: 0.2, Prev: 0.2]

15:00 GMT / 23:00 SGT - US: Personal income (Oct) 4cast: 0.3% m/m [Mkt: 0.3, Prev: 0.3]

15:00 GMT / 23:00 SGT - US: Core PCE Price Index (Oct) 4cast: 0.2% m/m [Mkt: 0.3, Prev: 0]

23:50 GMT / 07:50 SGT - JP: Retail Sales (Oct) [Mkt: -10.5, Prev: 7.1]

23:50 GMT / 07:50 SGT - JP: Retail Sales (Oct) 4cast: -7.1% y/y [Mkt: -4.3, Prev: 9.1]

EVENTS & AUCTIONS

18:00 GMT / 02:00 SGT - US: 7 year auction

19:00 GMT / 03:00 SGT - US: Fed Beige Book


Forex - Asia Open - Overnight Highlights


 23:46 (GMT) 26 Nov

 [Forex Highlights]

Asia Overnight Highlights - 27 Nov 2019

MAJORS

FX Highlights:

The Bloomberg dollar spot index appeared fatigued of the U.S./China trade news on Tuesday and softened slightly to sub-98.300 levels in NY.

Positive trade sentiment was helped by remarks by White House's Conway, saying the US and China were close to agreeing a phase 1 deal, though sticking points remained. Trump later expressed a similar view. This saw USD/JPY as high as 109.19.

A slow news morning in Europe saw some weakness in GBP, based on the two most recent opinion polls from Kantar and ICM research showing a narrowing in the Conservative lead over Labour, with the ICM poll showing Labour on 34% - the highest since April.

EUR/USD kept to a tight range above 1.10. The German Gfk consumer climate survey was a tick stronger than expected but in line with the stable trend in the second half of the year. US data was on balance stronger than expected, with a narrower trade deficit and stronger than expected new home sales outweighing disappointment on consumer confidence.

AUD/USD saw brief gains on a speech from RBA governor Lowe, who ruled out QE until or unless rates fell to 0.25% from the current 0.75%. While the initial gains of around 20 pips were reversed, commodity currencies gained a positive tone later in the day due to improved trade sentiment, CAD outperforming AUD.

Data/Events Highlights:

- US advance Oct trade deficit fell to $66.5bn from $70.5bn vs $71.0bn exp.

- US Nov consumer confidence fell to 125.5 from 126.1 vs 127.0 exp.

- US Oct new home sales -0.7% to 733k vs 705k exp.

- VIX index: 11.54 (-2.78%)

- Gold Spot: $1,461.78/oz (+0.03%)

- ICE Brent front contract: $64.27 (+$0.62)

- Nymex WTI front contract: $58.22 ($-0.19)

- Reuters/Jefferies Commodities Index: 181.10 (+0.29%)

- 10y UST: 1.741% (-1bp) (Asia morning)

- DJI: 28,121.68 (+0.20%); S&P: 3,140.52 (+0.22%); Nasdaq: 8,647.93 (+0.18%)

Data/Events Ahead:

A bunch of U.S. data is scheduled for release as Thursday is the Thanksgiving holiday - including GDP, jobless claims, durable goods, personal income/spending. We expect a 0.3% decline in Oct durable goods orders with a marginal 0.1% increase ex transport. The preliminary (second) estimate of Q3 GDP is due, and we expect an unrevised 1.9% pace. We also expect a 0.2% increase in Oct's core PCE price index, a 0.3% rise in Oct personal income, and a 0.2% rise in Oct personal spending.

EMERGING ASIA

FX Highlights:

Asian currencies were mixed on Tuesday as dollar continued to strengthen following Fed's Powel optimistic tone on the U.S. economy but trade optimism also persisted. PHP was the biggest loser down 0.26% against the dollar. MYR was down 0.12% as well against the greenback. INR was the biggest winner on the other hand, up 0.33% against the dollar amid gains in domestic equities after the ArcellorMittal's takeover of a steel mill. CNH (+0.24%), THB (+0.07%) and SGD (+0.05%) also remained in gains.

USD/CNH traded mixed on Tuesday, rising to 7.0400+ levels earlier but dropping quickly and sharply to 7.0091 lows in the NY session. However, pair remains within the 7.0000-7.1000 range for now. We see this pattern continuing. Onshore spot USD/CNY similarly rose to intraday highs of 7.0420 in the afternoon before a plunge back to 7.0300-levels into the close - not as deep as the offshore yuan. If trade hope continues to support, USD/CNY may return to trade at 7.0000 level. 1Y NDF printed lows of 7.0874 in Tuesday's NY session and traded horizontally around 7.0925 subsequently.

USD/SGD printed 5-week highs of 1.3667 in late Asian/early European hours on Tuesday but pared all of these gains and was seen back at sub-1.3650 levels in the NY hours. Singapore's October industrial production beat market expectations and rose to 4.0% y/y from a revised 0.7% y/y in September. Following the break above the 1.3664 resistance, we will turn our attention to the 1.3675 resistance next.

USD/IDR 1M NDFs touched highs of 14161 early in the NY session but pared the gains and was seen back at 14130-levels into NY close. USD/IDR onshore spot remained below 14090 mostly on Tuesday after hitting 14100+ levels last week. The improved optimism around the U.S./China phase 1 trade deal is helping to revive sentiments, but we believe the pair is still fragile amid trade risks and a widening budget deficit at home. Support at 14050 not at risk and upside pressures are likely to return. We continue to see a risk of another move towards 14110 resistance, but expect BI to limit gains above that.

USD/INR 1M NDFs traded with a steady downside bias on Tuesday, defying market pressures, and was seen at 71.600 lows in NY. USD/INR onshore spot gapped slightly lower to open at 71.680 on Tuesday from previous close of 71.725 and traded to fresh 2.5-week lows of 71.475 in the afternoon. Optimism around the labor reform is still mixed, but stronger chances could boost the rupee. The U.S./China trade talks are also still ongoing, and Q3 2019 GDP growth data will be released at the end of the week - which is likely to show a further slowdown. Break below the 71.545 support is still looking fragile, and the 71 handle should still hold amid global trade uncertainties and domestic weakness.

Data/Events Highlights:

Singapore's October industrial production beat market expectations and rose to 4.0% y/y from a revised 0.7% y/y in September.

Data/Events Ahead:

No key data is reported in Asia on Wednesday.

DATA RELEASES DUE TODAY

00:30 GMT / 08:30 SGT - AU: Construction Work Done (Q3) 4cast: -1.5% q/q [Mkt: -1, Prev: -3.8]

13:30 GMT / 21:30 SGT - US: GDP Annualized (3Q S) 4cast: 1.9% q/q ann [Mkt: 1.9, Prev: 1.9]

13:30 GMT / 21:30 SGT - US: Initial Claims (Nov 23) [Mkt: 221, Prev: 227]

13:30 GMT / 21:30 SGT - US: Core PCE Price Index (3Q S) 4cast: 2.2% q/q ann [Mkt: 2.2, Prev: 2.2]

13:30 GMT / 21:30 SGT - US: Durable Ex Transportation (Oct P) 4cast: 0.1% m/m [Mkt: 0.1, Prev: -0.4]

13:30 GMT / 21:30 SGT - US: Durable Goods Orders (Oct P) 4cast: -0.3% m/m [Mkt: -0.8, Prev: -1.2]

14:45 GMT / 22:45 SGT - US: Chicago PMI (Nov) [Mkt: 47.1, Prev: 43.2]

15:00 GMT / 23:00 SGT - US: Pending Home Sales (Oct) [Mkt: -0.2, Prev: 1.5]

15:00 GMT / 23:00 SGT - US: Personal spending (Oct) 4cast: 0.2% m/m [Mkt: 0.2, Prev: 0.2]

15:00 GMT / 23:00 SGT - US: Personal income (Oct) 4cast: 0.3% m/m [Mkt: 0.3, Prev: 0.3]

15:00 GMT / 23:00 SGT - US: Core PCE Price Index (Oct) 4cast: 0.2% m/m [Mkt: 0.3, Prev: 0]

23:50 GMT / 07:50 SGT - JP: Retail Sales (Oct) [Mkt: -10.5, Prev: 7.1]

23:50 GMT / 07:50 SGT - JP: Retail Sales (Oct) 4cast: -7.1% y/y [Mkt: -4.3, Prev: 9.1]

EVENTS & AUCTIONS

18:00 GMT / 02:00 SGT - US: 7 year auction

19:00 GMT / 03:00 SGT - US: Fed Beige Book


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