Forex - Asia Highlights - Monday 19 June - Short covering seen in GBP ahead of Brexit talks


 05:20 (GMT) 19 Jun

  [Forex Highlights]

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Asia Highlights - Monday 19 June - Short covering seen in GBP ahead of Brexit talks (0100-PYZY-C01)

Asia Highlights, Monday 19 June 2017

US overview

- Weaker US data helped to stem the market's post-Fed enthusiasm, covering taking US short end yields off the May top, with the dollar falling back. In the UK, gilts too couldn't sustained the attempt to stretch the post BoE selloff.

News highlights

- US May Housing Starts 1092k from 1156 vs Mkt 1220; permits 1168k from 1228 vs Mkt 1249

- US Jun Univ of Mich Sent.(Prelim) 94.5 from 97.1 vs Mkt 97.0

- Fed's Kashkari - Fed should have waited for higher inflation before raising rates. Would have liked Fed to announce a start date for trimming balance sheet

- Fed's Kaplan - sees rebound in economic growth, is going to need to see improvement in inflation

Asia FX and News -

- BBG: Almost a year since Britons voted to leave the EU, Brexit talks finally open on Monday amid confusion over just what the U.K. government wants from the divorce.

- BBG: Australian central bank Governor Philip Lowe said his nation's economy is capable of faster growth, while warning that achieving it will require lawmakers to surmount current political gridlock.

- BBG: Japan had a surprise trade deficit in May, as strongerthan- expected imports overpowered the continued growth in exports.

- BBG: President Emmanuel Macron won a commanding majority in France's parliamentary election on Sunday, sweeping aside traditional parties and securing a powerful mandate for pro-business reforms.

- BBG: China's home prices increased in fewer cities last month in the wake of cooling measures.

FX

- The Macron win in parliamentary elections was telegraphed well in advance and limited gains were seen in EUR/USD at the Monday open as spot continued to hover around 1.1200.

- EUR/JPY however did receive a small boost, though the pair eventually stalled at trend resistance of 124.38 at last look.

- USD/JPY also re-surmounted the 111.00 handle at the same time.

- Meanwhile, NZD/USD saw a strong move higher on supposed macro purchase after
better than expected second tier data, going to a high of 0.7298.

- Gains were led by AUD/NZD selling, with the cross right in the middle of its recent 1.04-1.05 range again. This meant that AUD/USD was once again contained ahead of technical resistance at 0.7635.

- While the data calendar is rather sedate for the week, the new week marks the start ofthe Brexit negotiations and short covering was seen in GBPUSD as the pair traded to 1.2790 from 1.2740. Market players were betting that Theresa May would soften her hard Brexit stance after being humbled in the recent election.

Data:

UK: Rightmove House Price Index (Jun) -0.4% m/m (Prev: 1.2)

UK: Rightmove House Price Index (Jun) 1.8% y/y (Prev: 3)

JP: Customs Cleared Trade (May) -203.4 JPY bn (Mkt: 43.3 Prev: 481.1)

AU: New Motor Vehicle Sales (May) 2.9% m/m (Prev: 0.6R)

Events & Auctions:

23:30 GMT - AU: RBA's Lowe Speaks in Canberra

AU: RBA Minutes Released

05:00 GMT - WLD: IMF's Lipton Speaks in Tokyo

09:00 GMT - SK: Bond auction

09:30 GMT - BE: Bond auction

09:30 GMT - NL: 3mth Bills auction

09:30 GMT - NL: 6mth Bills auction

12:00 GMT - US: Fed's Dudley Speaks in Plattsburgh, New York

12:50 GMT - FR: Bills auction

15:30 GMT - US: 3mth Bills auction

15:30 GMT - US: 6mth Bills auction

23:00 GMT - US: Fed's Evans Speaks in New York


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