Forex - Asia Close Highlights


 08:39 (GMT) 16 May

  [Forex Highlights]

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Asia Close Highlights (0100-ZQGX-C01)

16 May 2018

Regional Backdrop:

Asian currencies were mostly mixed on Wednesday Asian time. INR (0.41%), SGD (0.25%), CNY (0.15%), CNH (0.13%), PHP (0.11%) registered some gains while IDR (-0.4%), KRW (-0.38%), THB (-0.37%), MYR (-0.17%), TWD (-0.08%) weakened. This comes as oil prices dipped a little, while above 3% USTs rattled Asia stock markets. Bank of Thailand kept policy rates unchanged, while we are expecting BI to hike policy rates on Thursday.

USD/CNH is seen coming off after decisively breaking an important resistance level. Pair last seen at 6.3577 after reaching a high of 6.3752 earlier. News of North Korea looking to cancel talks also possibly affecting risk sentiment. PBoC fixed mid-point at 6.3745 vs. previous close of 6.3725. USD/CNY touched a high of 6.3808 after an open of 6.3770 and was last seen at 6.3669. CNY/CNH gap close to 1 big figure. 1Y NDFs retracted slightly from close to the 6.4900 handle to 6.4727 at last check.

USD/SGD saw overnight rally lost steam during Asian session on Wednesday, as the pair was seen paring gains to 1.3410 at last look. According to our estimates, SGD NEER eased slightly, currently at +1.12% compared to the midpoint. News of North Korea calling off talks had took many by surprise, causing some jitters in the markets on Wednesday.

USD/IDR onshore spot gapped higher to open at 14070 on Wednesday vs. last close of 14037 as the UST yields surged to fresh highs and trade tensions brewed with China officials in the US. News of fresh attacks in Sumatra region also weighed on sentiment, and pair jumped to a fresh 31-month high of 14114 in the afternoon.

USD/INR onshore spot opened at Tuesday's 16-month high of 68.1400 on Wednesday and slid lower in early trading to break below the 68 handle, possibly due to intervention. Pair later consolidated around 67.8000 as the Karnataka election jitters ended. Upside pressures are however still seen from UST yields at fresh highs and US-China trade talks.

Market Psychology

USD/CNH - For USD/CNH, a break above the 6.3800 resistance level should trigger a move towards the 6.4000 handle. For the onshore pair, we believe that another breach of 6.3800 should move USD/CNY towards the 6.4000 handle.

USD/SGD - Break of 1.3400 handle put the focus on the upside, we eye on the next resistance at 1.3500 handle.

USD/IDR - Break above 14090 suggests bulls may be back in control, but we expect BI to hike interest rates on Thursday, reining in further gains, but only temporarily.

USD/INR - We eye the next strong resistance at 68.3750 although central bank intervention is likely to keep gains limited.


Forex - Asia Open - Overnight Highlights


 23:44 (GMT) 14 May

 [Forex Highlights]

Asia Overnight Highlights - 15 May 2018

ASIA OUTLOOK

Trump's comments on helping China's ZTE gave early support to equities while UST yields edged higher, but Commerce Secretary Ross was less conciliatory, seeing equities off their highs. Bond yields were lifted by comments from ECB's Villeroy but EUR/USD gains were fully erased as the USD tone improved late in what was generally a subdued session.

Majors FX Highlights

The Bloomberg dollar index remained soft earlier on Monday, and slid to a low of 92.243 before upside pressures returned and took the index back up to 92.600+ levels after US Commerce Secretary Ross was critical of Europe as well as China on trade. Data calendar was light, with no tier 1 data in sights before eyes turn to retail sales today. EUR/USD remained bid on hawkish comments from ECB Villeroy as he said the end of asset purchases is a matter of months rather than years away, but gains stalled short of the 1.2000 handle and focus turned back to the downside on Com Sec Ross' comments and the attempts to form a populist government in Italy still struggling to come to a conclusion. Pair slid all the way back below 1.1930 into NY close/Asian open as ECB's Coeure saw rates remaining low well after asset purchases ended. Cable pushed above 1.3600 to a high of 1.3608 but EUR/GBP nudged down to around .88. Traders are looking to employment data with earnings again in focus. USD/JPY seen with a modest bid tone, although still in familiar ranges, last seen inching up above 109.70. Quiet on the commodity currencies, with modest losses late as the USD picked up. NZD still struggling as AUD/NZD heads towards 1.0900. The CAD is marginally the better, regaining some of the ground lost to the AUD after Friday's jobs data even as USD/CAD advanced to 1.28.

Majors Data Highlights

After a quiet start to the week, US retail sales today is likely to be the most watched, expected to see a modest 0.3% m/m gain on the headline, a more solid 0.5% ex-autos and ex-autos and gasoline. The May Empire State and NAHB homebuilders survey are also due, as too March business inventories. Q1 GDP is due from both Germany and the Eurozone today, the first estimate for the former expected to post 0.4% q/q, down from 0.6% in Q4 and bringing y/y growth down to 2.4% from 2.9%. It's the second estimate for the Eurozone and should confirm the preliminary 0.4% q/q, 2.5% y/y. The May ZEW survey is also due where we expect a modest rebound to a still negative -4 on the headline, only recovering a small part of the sharp April fall to -8.2. UK employment data and average earnings numbers will also take some focus. We anticipate a slide in the headline rate to 2.5% from 2.8%. The unemployment rate is likely to remain at a cycle low of 4.2%. Q1 productivity data will be released alongside the jobs numbers, a fresh fall likely after surprisingly strong growth in the last two quarters.

Emerging Asia FX Highlights

USD/Asians traded in a range bound manner at the start of the week, but picked up traction in late NY hours. USD/CNY 1Y NDFs saw some upside momentum as US Commerce Sec Ross spoke about China's unfair trade practices, and a break above 6.4400 was seen in the NY afternoon with gains extending to 6.4460 in the Asian morning hours today. USD/SGD slid earlier on Monday from 1.3350+ levels to a low of 1.3305 but gains returned later in the NY hours with pair inching back to 1.3360-levels. USD/IDR 1M NDFs traded on either side of 14070 earlier on Monday, but remained mostly bid in late NY hours. USD/INR 1M NDFs traded with a clear bullish bias overnight, touching the 68 handle at last check as April inflation came in slightly higher than expectations, raising the chances of a hawkish bias by the RBI.

Emerging Asia Data Highlights

India April consumer prices rise 4.58% vs 4.28% in March.

A heavy data calendar is seen ahead in Asia today, led by China's April IP and retail sales data in the morning. April trade numbers for India and Indonesia will also be due, as will be Mar overseas remittances for Filipinos.

OVERNIGHT NEWS HIGHLIGHTS

- Fed's Mester said economy slightly beyond full employment, doesn't expect inflation to pick up sharply, see l-t Fed Funds at 3%.

- Fed's Bullard sees risk of inverted curve late 2018 or early 2019.

- VIX index: 12.93 (+2.21%)

- Gold Spot: $1,314.06/oz (+0.04%)

- ICE Brent front contract: $78.23 (+$1.11)

- Nymex WTI front contract: $71.13 (+$0.17)

- Reuters/Jefferies Commodities Index: 203.83 (+0.13%)

- 10y UST: 3.002% (+3bp) (Asia morning)

- DJI: 24,899.41 (+0.27%); S&P: 2,730.13 (+0.09%); Nasdaq: 7,411.32 (+0.11%)

ASIA NEWS

China: US Commerce Secretary Ross says China and Europe are highly protectionist. - BBG

China: China's 2018 GDP growth is expected to be above 6.5 percent target, the Securities News reported, citing blue book from Chinese Academy of Social Sciences. - BBG

India: India's Railways Minister Piyush Goyal will hold the additional charge of finance ministry until incumbent Arun Jaitley's recovers, a statement from the president's house said. - BBG

CURRENCIES

EUR/USD managed to edge the recovery to as high as 1.1996 in the absence of any major data. ECB's Villeroy was seen as hawkish as he said the end of asset purchases is a matter of months rather than years away. However gains were fully erased back to a low of 1.1932 with US Commerce Secretary Ross critical of Europe as well as China on trade, and attempts to form a populist government in Italy still struggling to come to a conclusion. ECB's Coeure saw rates remaining low well after asset purchases ended.

USD/JPY continues to tread water around 109.50 despite 10yr US yields heading back towards 3%, picking up a little late despite equities coming off their highs. EUR/JPY failed to hold a move above 1.31.

Cable failed to hold above 1.36 but EUR/GBP nudged down to around .88. Traders are looking to employment data with earnings again in focus. .

EUR/CHF sticking close to the middle of 1.19/1.20, though more attention being paid to USD/CHF now as CFTC shows a big step up in short CHF 'speculative' positioning.

Quiet on the commodity currencies, with modest losses late as the USD picked up. NZD still struggling as AUD/NZD heads towards 1.0900. The CAD is marginally the better, regaining some of the ground lost to the AUD after Friday's jobs data even as USD/CAD advanced to 1.28.

Modest bounces seen in EUR/SEK and EUR/NOK, the latter despite a firmer Brent, though only a small recovery from the recent fall.

BONDS

USTs see yields lifted slightly overnight by the bund action, but US-DE narrowing also cushions. 10s test back to around 3% again but all pretty quiet in the US session. 2s +0.6bps @ 2.54%, 5s +1.2bps @ 2.85%, 10s +2.4bps @ 2.99%, 30s +2.3bps @ 3.13%.

Agency Spreads: Freddie/Fannie 5s +0.2/-1.2 bps, 10s -1.0/+0.4 bps.

Swap Spreads: 2s -0.75bps, 5s -0.53bps, 10s -0.50bps.

EQUITIES

Equities had support from an apparently softer stance from Trump towards China as he sought to help Chinese company ZTE which had been hit by US sanctions. However Commerce Secretary Ross later sounded quite hawkish on trade and helped equites come off their highs. Middle East tensions supported energy.

ASIA CURRENCIES

USD/CNY: 1Y NDFs saw some upside momentum as US Commerce Sec Ross spoke about China's unfair trade practices, and a break above 6.4400 was seen in the NY afternoon with gains extending to 6.4460 in the Asian morning hours today. On Monday, PBoC fixed mid-point at 6.3345 vs. previous close of 6.3323. Onshore spot USD/CNY opened at 6.3318 and then moved slightly up to 6.3414 while trading mostly in a range-bound manner. For USD/CNY, it is likely to stay above 6.3200 support for now, but find it difficult to break 6.3600 resistance.

USD/CNH: Pair traded choppily earlier on Monday, but a bid tone was seen in late NY hours as US-China trade spat continued, and pair rallied towards 6.3400 handle at last look. Focus on April economic data out today. We expect slight slowdowns for IP and retail sales. For USD/CNH, we watch for 6.3400 as an important immediate resistance level and 6.3150 as the support.

USD/SGD: Pair slid earlier on Monday from 1.3350+ levels to a low of 1.3305 but gains returned later in the NY hours with pair inching back to 1.3360-levels as US comments on China's trade practices returned risking another trade spat. Support at the 1.3300 handle still supporting the downside, and gains to 1.3400 still remain in the cards.

USD/IDR: 1M NDFs traded on either side of 14070 earlier on Monday, but remained mostly bid in late NY hours. Onshore spot saw a firm opening at 13963 on Monday vs. last close of 13958 as the dollar index softened from its YTD highs on Friday in the NY hours. Pair however saw upside pressures return in the morning as blast reports from Surabaya continued, and a high of 13993 was printed before the pair turned back lower to 13970-levels. Bank Indonesia is giving clear signals of a rate hike at their meeting this week, which should keep the gains in check, but the 14000 handle still remains at risk.

USD/INR: 1M NDFs traded with a clear bullish bias overnight, touching the 68 handle at last check as April inflation came in slightly higher than expectations, raising the chances of a hawkish bias by the RBI. Onshore spot gapped lower to open at 67.2450 on Monday vs. last close of 67.3250 as the US dollar softened in the NY hours on Friday and oil prices corrected slightly lower. Pair however charted on a bullish run, and eventually printed a fresh 15-month high of 67.6200. Immediate resistance now seen at 67.6800, which remains at risk amid Karnataka election result jitters.

DATA RELEASES DUE TODAY

- n/a GMT - PH: Overseas Remittances (Mar) [Prev: 4.5]

- n/a GMT - PH: Overseas Remittances (Mar) [Prev: 2.267]

- n/a GMT - IN: Exports (Apr) [Prev: -0.7]

- n/a GMT - IN: Imports (Apr) [Prev: 7.2]

- n/a GMT - IN: Trade Balance (Apr) [Mkt: -14.75, Prev: -13.69]

- 02:00 GMT - CN: Industrial Production (Apr) [Mkt: 6.4, Prev: 6]

- 02:00 GMT - CN: Retail Sales (Apr) [Mkt: 10.1, Prev: 10.1]

- 04:00 GMT - ID: Exports (Apr) [Prev: 6.14]

- 04:00 GMT - ID: Imports (Apr) [Prev: 9.07]

- 04:00 GMT - ID: Trade Balance (Apr) [Prev: 1090]

- 04:30 GMT - JP: METI Tertiary activity index (Mar) [Mkt: -0.2, Prev: 0]

- 08:30 GMT - UK: Average Earnings (incl. bonus) (Mar) [Prev: 2.8]

- 08:30 GMT - UK: Claimant Count Change (Apr) [Prev: 11.6]

- 08:30 GMT - UK: Claimant Count Rate (Apr) [Prev: 2.4]

- 08:30 GMT - UK: ILO Unemployment Rate (Mar) [Prev: 4.2]

- 09:00 GMT - EU: GDP (SA) (Q1 P) [Prev: 0.4]

- 09:00 GMT - EU: GDP (SA) (Q1 P) [Prev: 2.5]

- 09:00 GMT - EU: Industrial production (Mar) [Prev: 2.9]

- 09:00 GMT - EU: ZEW (Economic Sentiment) (May) 4cast:4 index [Prev: 1.9]

- 12:30 GMT - US: Empire State Survey (May) [Mkt: 15, Prev: 15.8]

- 12:30 GMT - US: Retail Sales (Apr) 4cast:0.5 % m/m [Mkt: 0.3, Prev: 0.6]

- 12:30 GMT - US: Retail Sales (ex Autos) (Apr) 4cast:0.3 % m/m [Mkt: 0.6, Prev: 0.2]

- 12:30 GMT - CA: Existing Home Sales (Apr) 4cast:2.5 % m/m [Prev: 1.3]

- 14:00 GMT - US: Business Inventories (Mar) [Mkt: 0.2, Prev: 0.6]

- 14:00 GMT - US: NAHB Builders survey (May) [Mkt: 70, Prev: 69]

- 20:00 GMT - US: Net Long-term TICS Flows (Mar) [Prev: 49]

- 23:00 GMT - KR: Unemployment (sa) (Mar) [Prev: 4]

EVENTS & AUCTIONS

- 00:30 GMT - AU: RBA Meeting Minutes

- 17:10 GMT - US: Fed's Williams Speaks in Minneapolis


Forex - Asia Open - Overnight Highlights


 23:44 (GMT) 14 May

 [Forex Highlights]

Asia Overnight Highlights - 15 May 2018

ASIA OUTLOOK

Trump's comments on helping China's ZTE gave early support to equities while UST yields edged higher, but Commerce Secretary Ross was less conciliatory, seeing equities off their highs. Bond yields were lifted by comments from ECB's Villeroy but EUR/USD gains were fully erased as the USD tone improved late in what was generally a subdued session.

Majors FX Highlights

The Bloomberg dollar index remained soft earlier on Monday, and slid to a low of 92.243 before upside pressures returned and took the index back up to 92.600+ levels after US Commerce Secretary Ross was critical of Europe as well as China on trade. Data calendar was light, with no tier 1 data in sights before eyes turn to retail sales today. EUR/USD remained bid on hawkish comments from ECB Villeroy as he said the end of asset purchases is a matter of months rather than years away, but gains stalled short of the 1.2000 handle and focus turned back to the downside on Com Sec Ross' comments and the attempts to form a populist government in Italy still struggling to come to a conclusion. Pair slid all the way back below 1.1930 into NY close/Asian open as ECB's Coeure saw rates remaining low well after asset purchases ended. Cable pushed above 1.3600 to a high of 1.3608 but EUR/GBP nudged down to around .88. Traders are looking to employment data with earnings again in focus. USD/JPY seen with a modest bid tone, although still in familiar ranges, last seen inching up above 109.70. Quiet on the commodity currencies, with modest losses late as the USD picked up. NZD still struggling as AUD/NZD heads towards 1.0900. The CAD is marginally the better, regaining some of the ground lost to the AUD after Friday's jobs data even as USD/CAD advanced to 1.28.

Majors Data Highlights

After a quiet start to the week, US retail sales today is likely to be the most watched, expected to see a modest 0.3% m/m gain on the headline, a more solid 0.5% ex-autos and ex-autos and gasoline. The May Empire State and NAHB homebuilders survey are also due, as too March business inventories. Q1 GDP is due from both Germany and the Eurozone today, the first estimate for the former expected to post 0.4% q/q, down from 0.6% in Q4 and bringing y/y growth down to 2.4% from 2.9%. It's the second estimate for the Eurozone and should confirm the preliminary 0.4% q/q, 2.5% y/y. The May ZEW survey is also due where we expect a modest rebound to a still negative -4 on the headline, only recovering a small part of the sharp April fall to -8.2. UK employment data and average earnings numbers will also take some focus. We anticipate a slide in the headline rate to 2.5% from 2.8%. The unemployment rate is likely to remain at a cycle low of 4.2%. Q1 productivity data will be released alongside the jobs numbers, a fresh fall likely after surprisingly strong growth in the last two quarters.

Emerging Asia FX Highlights

USD/Asians traded in a range bound manner at the start of the week, but picked up traction in late NY hours. USD/CNY 1Y NDFs saw some upside momentum as US Commerce Sec Ross spoke about China's unfair trade practices, and a break above 6.4400 was seen in the NY afternoon with gains extending to 6.4460 in the Asian morning hours today. USD/SGD slid earlier on Monday from 1.3350+ levels to a low of 1.3305 but gains returned later in the NY hours with pair inching back to 1.3360-levels. USD/IDR 1M NDFs traded on either side of 14070 earlier on Monday, but remained mostly bid in late NY hours. USD/INR 1M NDFs traded with a clear bullish bias overnight, touching the 68 handle at last check as April inflation came in slightly higher than expectations, raising the chances of a hawkish bias by the RBI.

Emerging Asia Data Highlights

India April consumer prices rise 4.58% vs 4.28% in March.

A heavy data calendar is seen ahead in Asia today, led by China's April IP and retail sales data in the morning. April trade numbers for India and Indonesia will also be due, as will be Mar overseas remittances for Filipinos.

OVERNIGHT NEWS HIGHLIGHTS

- Fed's Mester said economy slightly beyond full employment, doesn't expect inflation to pick up sharply, see l-t Fed Funds at 3%.

- Fed's Bullard sees risk of inverted curve late 2018 or early 2019.

- VIX index: 12.93 (+2.21%)

- Gold Spot: $1,314.06/oz (+0.04%)

- ICE Brent front contract: $78.23 (+$1.11)

- Nymex WTI front contract: $71.13 (+$0.17)

- Reuters/Jefferies Commodities Index: 203.83 (+0.13%)

- 10y UST: 3.002% (+3bp) (Asia morning)

- DJI: 24,899.41 (+0.27%); S&P: 2,730.13 (+0.09%); Nasdaq: 7,411.32 (+0.11%)

ASIA NEWS

China: US Commerce Secretary Ross says China and Europe are highly protectionist. - BBG

China: China's 2018 GDP growth is expected to be above 6.5 percent target, the Securities News reported, citing blue book from Chinese Academy of Social Sciences. - BBG

India: India's Railways Minister Piyush Goyal will hold the additional charge of finance ministry until incumbent Arun Jaitley's recovers, a statement from the president's house said. - BBG

CURRENCIES

EUR/USD managed to edge the recovery to as high as 1.1996 in the absence of any major data. ECB's Villeroy was seen as hawkish as he said the end of asset purchases is a matter of months rather than years away. However gains were fully erased back to a low of 1.1932 with US Commerce Secretary Ross critical of Europe as well as China on trade, and attempts to form a populist government in Italy still struggling to come to a conclusion. ECB's Coeure saw rates remaining low well after asset purchases ended.

USD/JPY continues to tread water around 109.50 despite 10yr US yields heading back towards 3%, picking up a little late despite equities coming off their highs. EUR/JPY failed to hold a move above 1.31.

Cable failed to hold above 1.36 but EUR/GBP nudged down to around .88. Traders are looking to employment data with earnings again in focus. .

EUR/CHF sticking close to the middle of 1.19/1.20, though more attention being paid to USD/CHF now as CFTC shows a big step up in short CHF 'speculative' positioning.

Quiet on the commodity currencies, with modest losses late as the USD picked up. NZD still struggling as AUD/NZD heads towards 1.0900. The CAD is marginally the better, regaining some of the ground lost to the AUD after Friday's jobs data even as USD/CAD advanced to 1.28.

Modest bounces seen in EUR/SEK and EUR/NOK, the latter despite a firmer Brent, though only a small recovery from the recent fall.

BONDS

USTs see yields lifted slightly overnight by the bund action, but US-DE narrowing also cushions. 10s test back to around 3% again but all pretty quiet in the US session. 2s +0.6bps @ 2.54%, 5s +1.2bps @ 2.85%, 10s +2.4bps @ 2.99%, 30s +2.3bps @ 3.13%.

Agency Spreads: Freddie/Fannie 5s +0.2/-1.2 bps, 10s -1.0/+0.4 bps.

Swap Spreads: 2s -0.75bps, 5s -0.53bps, 10s -0.50bps.

EQUITIES

Equities had support from an apparently softer stance from Trump towards China as he sought to help Chinese company ZTE which had been hit by US sanctions. However Commerce Secretary Ross later sounded quite hawkish on trade and helped equites come off their highs. Middle East tensions supported energy.

ASIA CURRENCIES

USD/CNY: 1Y NDFs saw some upside momentum as US Commerce Sec Ross spoke about China's unfair trade practices, and a break above 6.4400 was seen in the NY afternoon with gains extending to 6.4460 in the Asian morning hours today. On Monday, PBoC fixed mid-point at 6.3345 vs. previous close of 6.3323. Onshore spot USD/CNY opened at 6.3318 and then moved slightly up to 6.3414 while trading mostly in a range-bound manner. For USD/CNY, it is likely to stay above 6.3200 support for now, but find it difficult to break 6.3600 resistance.

USD/CNH: Pair traded choppily earlier on Monday, but a bid tone was seen in late NY hours as US-China trade spat continued, and pair rallied towards 6.3400 handle at last look. Focus on April economic data out today. We expect slight slowdowns for IP and retail sales. For USD/CNH, we watch for 6.3400 as an important immediate resistance level and 6.3150 as the support.

USD/SGD: Pair slid earlier on Monday from 1.3350+ levels to a low of 1.3305 but gains returned later in the NY hours with pair inching back to 1.3360-levels as US comments on China's trade practices returned risking another trade spat. Support at the 1.3300 handle still supporting the downside, and gains to 1.3400 still remain in the cards.

USD/IDR: 1M NDFs traded on either side of 14070 earlier on Monday, but remained mostly bid in late NY hours. Onshore spot saw a firm opening at 13963 on Monday vs. last close of 13958 as the dollar index softened from its YTD highs on Friday in the NY hours. Pair however saw upside pressures return in the morning as blast reports from Surabaya continued, and a high of 13993 was printed before the pair turned back lower to 13970-levels. Bank Indonesia is giving clear signals of a rate hike at their meeting this week, which should keep the gains in check, but the 14000 handle still remains at risk.

USD/INR: 1M NDFs traded with a clear bullish bias overnight, touching the 68 handle at last check as April inflation came in slightly higher than expectations, raising the chances of a hawkish bias by the RBI. Onshore spot gapped lower to open at 67.2450 on Monday vs. last close of 67.3250 as the US dollar softened in the NY hours on Friday and oil prices corrected slightly lower. Pair however charted on a bullish run, and eventually printed a fresh 15-month high of 67.6200. Immediate resistance now seen at 67.6800, which remains at risk amid Karnataka election result jitters.

DATA RELEASES DUE TODAY

- n/a GMT - PH: Overseas Remittances (Mar) [Prev: 4.5]

- n/a GMT - PH: Overseas Remittances (Mar) [Prev: 2.267]

- n/a GMT - IN: Exports (Apr) [Prev: -0.7]

- n/a GMT - IN: Imports (Apr) [Prev: 7.2]

- n/a GMT - IN: Trade Balance (Apr) [Mkt: -14.75, Prev: -13.69]

- 02:00 GMT - CN: Industrial Production (Apr) [Mkt: 6.4, Prev: 6]

- 02:00 GMT - CN: Retail Sales (Apr) [Mkt: 10.1, Prev: 10.1]

- 04:00 GMT - ID: Exports (Apr) [Prev: 6.14]

- 04:00 GMT - ID: Imports (Apr) [Prev: 9.07]

- 04:00 GMT - ID: Trade Balance (Apr) [Prev: 1090]

- 04:30 GMT - JP: METI Tertiary activity index (Mar) [Mkt: -0.2, Prev: 0]

- 08:30 GMT - UK: Average Earnings (incl. bonus) (Mar) [Prev: 2.8]

- 08:30 GMT - UK: Claimant Count Change (Apr) [Prev: 11.6]

- 08:30 GMT - UK: Claimant Count Rate (Apr) [Prev: 2.4]

- 08:30 GMT - UK: ILO Unemployment Rate (Mar) [Prev: 4.2]

- 09:00 GMT - EU: GDP (SA) (Q1 P) [Prev: 0.4]

- 09:00 GMT - EU: GDP (SA) (Q1 P) [Prev: 2.5]

- 09:00 GMT - EU: Industrial production (Mar) [Prev: 2.9]

- 09:00 GMT - EU: ZEW (Economic Sentiment) (May) 4cast:4 index [Prev: 1.9]

- 12:30 GMT - US: Empire State Survey (May) [Mkt: 15, Prev: 15.8]

- 12:30 GMT - US: Retail Sales (Apr) 4cast:0.5 % m/m [Mkt: 0.3, Prev: 0.6]

- 12:30 GMT - US: Retail Sales (ex Autos) (Apr) 4cast:0.3 % m/m [Mkt: 0.6, Prev: 0.2]

- 12:30 GMT - CA: Existing Home Sales (Apr) 4cast:2.5 % m/m [Prev: 1.3]

- 14:00 GMT - US: Business Inventories (Mar) [Mkt: 0.2, Prev: 0.6]

- 14:00 GMT - US: NAHB Builders survey (May) [Mkt: 70, Prev: 69]

- 20:00 GMT - US: Net Long-term TICS Flows (Mar) [Prev: 49]

- 23:00 GMT - KR: Unemployment (sa) (Mar) [Prev: 4]

EVENTS & AUCTIONS

- 00:30 GMT - AU: RBA Meeting Minutes

- 17:10 GMT - US: Fed's Williams Speaks in Minneapolis


Forex - Asia Open - Overnight Highlights


 23:44 (GMT) 14 May

 [Forex Highlights]

Asia Overnight Highlights - 15 May 2018

ASIA OUTLOOK

Trump's comments on helping China's ZTE gave early support to equities while UST yields edged higher, but Commerce Secretary Ross was less conciliatory, seeing equities off their highs. Bond yields were lifted by comments from ECB's Villeroy but EUR/USD gains were fully erased as the USD tone improved late in what was generally a subdued session.

Majors FX Highlights

The Bloomberg dollar index remained soft earlier on Monday, and slid to a low of 92.243 before upside pressures returned and took the index back up to 92.600+ levels after US Commerce Secretary Ross was critical of Europe as well as China on trade. Data calendar was light, with no tier 1 data in sights before eyes turn to retail sales today. EUR/USD remained bid on hawkish comments from ECB Villeroy as he said the end of asset purchases is a matter of months rather than years away, but gains stalled short of the 1.2000 handle and focus turned back to the downside on Com Sec Ross' comments and the attempts to form a populist government in Italy still struggling to come to a conclusion. Pair slid all the way back below 1.1930 into NY close/Asian open as ECB's Coeure saw rates remaining low well after asset purchases ended. Cable pushed above 1.3600 to a high of 1.3608 but EUR/GBP nudged down to around .88. Traders are looking to employment data with earnings again in focus. USD/JPY seen with a modest bid tone, although still in familiar ranges, last seen inching up above 109.70. Quiet on the commodity currencies, with modest losses late as the USD picked up. NZD still struggling as AUD/NZD heads towards 1.0900. The CAD is marginally the better, regaining some of the ground lost to the AUD after Friday's jobs data even as USD/CAD advanced to 1.28.

Majors Data Highlights

After a quiet start to the week, US retail sales today is likely to be the most watched, expected to see a modest 0.3% m/m gain on the headline, a more solid 0.5% ex-autos and ex-autos and gasoline. The May Empire State and NAHB homebuilders survey are also due, as too March business inventories. Q1 GDP is due from both Germany and the Eurozone today, the first estimate for the former expected to post 0.4% q/q, down from 0.6% in Q4 and bringing y/y growth down to 2.4% from 2.9%. It's the second estimate for the Eurozone and should confirm the preliminary 0.4% q/q, 2.5% y/y. The May ZEW survey is also due where we expect a modest rebound to a still negative -4 on the headline, only recovering a small part of the sharp April fall to -8.2. UK employment data and average earnings numbers will also take some focus. We anticipate a slide in the headline rate to 2.5% from 2.8%. The unemployment rate is likely to remain at a cycle low of 4.2%. Q1 productivity data will be released alongside the jobs numbers, a fresh fall likely after surprisingly strong growth in the last two quarters.

Emerging Asia FX Highlights

USD/Asians traded in a range bound manner at the start of the week, but picked up traction in late NY hours. USD/CNY 1Y NDFs saw some upside momentum as US Commerce Sec Ross spoke about China's unfair trade practices, and a break above 6.4400 was seen in the NY afternoon with gains extending to 6.4460 in the Asian morning hours today. USD/SGD slid earlier on Monday from 1.3350+ levels to a low of 1.3305 but gains returned later in the NY hours with pair inching back to 1.3360-levels. USD/IDR 1M NDFs traded on either side of 14070 earlier on Monday, but remained mostly bid in late NY hours. USD/INR 1M NDFs traded with a clear bullish bias overnight, touching the 68 handle at last check as April inflation came in slightly higher than expectations, raising the chances of a hawkish bias by the RBI.

Emerging Asia Data Highlights

India April consumer prices rise 4.58% vs 4.28% in March.

A heavy data calendar is seen ahead in Asia today, led by China's April IP and retail sales data in the morning. April trade numbers for India and Indonesia will also be due, as will be Mar overseas remittances for Filipinos.

OVERNIGHT NEWS HIGHLIGHTS

- Fed's Mester said economy slightly beyond full employment, doesn't expect inflation to pick up sharply, see l-t Fed Funds at 3%.

- Fed's Bullard sees risk of inverted curve late 2018 or early 2019.

- VIX index: 12.93 (+2.21%)

- Gold Spot: $1,314.06/oz (+0.04%)

- ICE Brent front contract: $78.23 (+$1.11)

- Nymex WTI front contract: $71.13 (+$0.17)

- Reuters/Jefferies Commodities Index: 203.83 (+0.13%)

- 10y UST: 3.002% (+3bp) (Asia morning)

- DJI: 24,899.41 (+0.27%); S&P: 2,730.13 (+0.09%); Nasdaq: 7,411.32 (+0.11%)

ASIA NEWS

China: US Commerce Secretary Ross says China and Europe are highly protectionist. - BBG

China: China's 2018 GDP growth is expected to be above 6.5 percent target, the Securities News reported, citing blue book from Chinese Academy of Social Sciences. - BBG

India: India's Railways Minister Piyush Goyal will hold the additional charge of finance ministry until incumbent Arun Jaitley's recovers, a statement from the president's house said. - BBG

CURRENCIES

EUR/USD managed to edge the recovery to as high as 1.1996 in the absence of any major data. ECB's Villeroy was seen as hawkish as he said the end of asset purchases is a matter of months rather than years away. However gains were fully erased back to a low of 1.1932 with US Commerce Secretary Ross critical of Europe as well as China on trade, and attempts to form a populist government in Italy still struggling to come to a conclusion. ECB's Coeure saw rates remaining low well after asset purchases ended.

USD/JPY continues to tread water around 109.50 despite 10yr US yields heading back towards 3%, picking up a little late despite equities coming off their highs. EUR/JPY failed to hold a move above 1.31.

Cable failed to hold above 1.36 but EUR/GBP nudged down to around .88. Traders are looking to employment data with earnings again in focus. .

EUR/CHF sticking close to the middle of 1.19/1.20, though more attention being paid to USD/CHF now as CFTC shows a big step up in short CHF 'speculative' positioning.

Quiet on the commodity currencies, with modest losses late as the USD picked up. NZD still struggling as AUD/NZD heads towards 1.0900. The CAD is marginally the better, regaining some of the ground lost to the AUD after Friday's jobs data even as USD/CAD advanced to 1.28.

Modest bounces seen in EUR/SEK and EUR/NOK, the latter despite a firmer Brent, though only a small recovery from the recent fall.

BONDS

USTs see yields lifted slightly overnight by the bund action, but US-DE narrowing also cushions. 10s test back to around 3% again but all pretty quiet in the US session. 2s +0.6bps @ 2.54%, 5s +1.2bps @ 2.85%, 10s +2.4bps @ 2.99%, 30s +2.3bps @ 3.13%.

Agency Spreads: Freddie/Fannie 5s +0.2/-1.2 bps, 10s -1.0/+0.4 bps.

Swap Spreads: 2s -0.75bps, 5s -0.53bps, 10s -0.50bps.

EQUITIES

Equities had support from an apparently softer stance from Trump towards China as he sought to help Chinese company ZTE which had been hit by US sanctions. However Commerce Secretary Ross later sounded quite hawkish on trade and helped equites come off their highs. Middle East tensions supported energy.

ASIA CURRENCIES

USD/CNY: 1Y NDFs saw some upside momentum as US Commerce Sec Ross spoke about China's unfair trade practices, and a break above 6.4400 was seen in the NY afternoon with gains extending to 6.4460 in the Asian morning hours today. On Monday, PBoC fixed mid-point at 6.3345 vs. previous close of 6.3323. Onshore spot USD/CNY opened at 6.3318 and then moved slightly up to 6.3414 while trading mostly in a range-bound manner. For USD/CNY, it is likely to stay above 6.3200 support for now, but find it difficult to break 6.3600 resistance.

USD/CNH: Pair traded choppily earlier on Monday, but a bid tone was seen in late NY hours as US-China trade spat continued, and pair rallied towards 6.3400 handle at last look. Focus on April economic data out today. We expect slight slowdowns for IP and retail sales. For USD/CNH, we watch for 6.3400 as an important immediate resistance level and 6.3150 as the support.

USD/SGD: Pair slid earlier on Monday from 1.3350+ levels to a low of 1.3305 but gains returned later in the NY hours with pair inching back to 1.3360-levels as US comments on China's trade practices returned risking another trade spat. Support at the 1.3300 handle still supporting the downside, and gains to 1.3400 still remain in the cards.

USD/IDR: 1M NDFs traded on either side of 14070 earlier on Monday, but remained mostly bid in late NY hours. Onshore spot saw a firm opening at 13963 on Monday vs. last close of 13958 as the dollar index softened from its YTD highs on Friday in the NY hours. Pair however saw upside pressures return in the morning as blast reports from Surabaya continued, and a high of 13993 was printed before the pair turned back lower to 13970-levels. Bank Indonesia is giving clear signals of a rate hike at their meeting this week, which should keep the gains in check, but the 14000 handle still remains at risk.

USD/INR: 1M NDFs traded with a clear bullish bias overnight, touching the 68 handle at last check as April inflation came in slightly higher than expectations, raising the chances of a hawkish bias by the RBI. Onshore spot gapped lower to open at 67.2450 on Monday vs. last close of 67.3250 as the US dollar softened in the NY hours on Friday and oil prices corrected slightly lower. Pair however charted on a bullish run, and eventually printed a fresh 15-month high of 67.6200. Immediate resistance now seen at 67.6800, which remains at risk amid Karnataka election result jitters.

DATA RELEASES DUE TODAY

- n/a GMT - PH: Overseas Remittances (Mar) [Prev: 4.5]

- n/a GMT - PH: Overseas Remittances (Mar) [Prev: 2.267]

- n/a GMT - IN: Exports (Apr) [Prev: -0.7]

- n/a GMT - IN: Imports (Apr) [Prev: 7.2]

- n/a GMT - IN: Trade Balance (Apr) [Mkt: -14.75, Prev: -13.69]

- 02:00 GMT - CN: Industrial Production (Apr) [Mkt: 6.4, Prev: 6]

- 02:00 GMT - CN: Retail Sales (Apr) [Mkt: 10.1, Prev: 10.1]

- 04:00 GMT - ID: Exports (Apr) [Prev: 6.14]

- 04:00 GMT - ID: Imports (Apr) [Prev: 9.07]

- 04:00 GMT - ID: Trade Balance (Apr) [Prev: 1090]

- 04:30 GMT - JP: METI Tertiary activity index (Mar) [Mkt: -0.2, Prev: 0]

- 08:30 GMT - UK: Average Earnings (incl. bonus) (Mar) [Prev: 2.8]

- 08:30 GMT - UK: Claimant Count Change (Apr) [Prev: 11.6]

- 08:30 GMT - UK: Claimant Count Rate (Apr) [Prev: 2.4]

- 08:30 GMT - UK: ILO Unemployment Rate (Mar) [Prev: 4.2]

- 09:00 GMT - EU: GDP (SA) (Q1 P) [Prev: 0.4]

- 09:00 GMT - EU: GDP (SA) (Q1 P) [Prev: 2.5]

- 09:00 GMT - EU: Industrial production (Mar) [Prev: 2.9]

- 09:00 GMT - EU: ZEW (Economic Sentiment) (May) 4cast:4 index [Prev: 1.9]

- 12:30 GMT - US: Empire State Survey (May) [Mkt: 15, Prev: 15.8]

- 12:30 GMT - US: Retail Sales (Apr) 4cast:0.5 % m/m [Mkt: 0.3, Prev: 0.6]

- 12:30 GMT - US: Retail Sales (ex Autos) (Apr) 4cast:0.3 % m/m [Mkt: 0.6, Prev: 0.2]

- 12:30 GMT - CA: Existing Home Sales (Apr) 4cast:2.5 % m/m [Prev: 1.3]

- 14:00 GMT - US: Business Inventories (Mar) [Mkt: 0.2, Prev: 0.6]

- 14:00 GMT - US: NAHB Builders survey (May) [Mkt: 70, Prev: 69]

- 20:00 GMT - US: Net Long-term TICS Flows (Mar) [Prev: 49]

- 23:00 GMT - KR: Unemployment (sa) (Mar) [Prev: 4]

EVENTS & AUCTIONS

- 00:30 GMT - AU: RBA Meeting Minutes

- 17:10 GMT - US: Fed's Williams Speaks in Minneapolis


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