Forex - Asia Highlights - Thursday, 14 February 2019


 06:05 (GMT) 14 Feb

  [Forex Highlights]

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Asia Highlights - Thursday, 14 February 2019 (0101-HWBN-C01)

US Overview:

The USD advanced after US CPI was marginally above expectations in the details, extending gains even as equities came off early highs, Trump optimism on trade talks noted.

US Highlights:

- US Jan CPI 0.0% vs +0.1% exp ex food and energy +0.2% as exp.

- Fed's Bostic said has central view of one rate hike in 2019.

- Fed's Harker said one rate hike in 2019, one in 2020 the appropriate path.

Data:

NZ: Food Price (Jan) 1.0% m/m (Prev: -0.2)

JP: GDP (sa) (Q4 P) 0.3% q/q (Mkt: 0.4 Prev: -0.7R)

Currencies:

EUR/SEK fell around 1% through the morning after the Riksbank left both rates and rate projections unchanged, maintaining the view of another rate hike in H2. However, they are loath to change outlooks in consecutive meetings, so the unchanged policy was widely anticipated. They reduced their GDP forecast for 2019 to 1.3% from 1.5%. While the SEK gained 1% after the meeting, it went into the meeting 0.5% above Tuesday's lows, so the rise was less dramatic than it appears.

Chief UK Brexit negotiator Ollie Robbins was reported to have made comments (in a bar) indicating that the UK parliament would have to choose between May's deal and a significant extension to the Brexit deadline sometime in March. UK CPI was essentially in line with expectations, with the y/y rate down to 1.8%, a two-year low. GBP was little changed through the morning, but managed a brief bounce around midday (UK), which some attributed to fixing demand. This bounce was largely erased versus the EUR and more than fully erased versus a rising USD.

U.S. CPI was not far from expectations, but the core rate was on the firm side of 0.2% before rounding, and y/y rates did nudge above consensus. This, coupled with optimism on trade talks in equity markets, helped trigger a USD rally that persisted even as equities and UST yields came off early highs. Trump saying trade talks with China were going well extended the USD's gains.

Asia FX and News:

New round of China - U.S. trade talks starts in Beijing. - BBG

China's Exports Rebound Ahead of Holiday as Trade Talks Continue.- BBG

Japan 4Q GDP Rose Annualized 1.4% Q/q; Est. +1.4%.- BBG

RBNZ's Orr Defends Capital Proposals After Banks' Dire Warnings. - BBG

The highlight during Asian session was China trade data, and this came as the U.S. and China kicked start another high level trade talk in Beijing on Thursday. China January trade data provided some relief as both import and export growth came in better than expected. Elsewhere, Japan's economy returned to growth with 1.4% q/q SAAR in the last quarter of 2018 after a contraction of 2.5% q/q SAAR in Q3. The modest rebound in GDP had limited impact on yen, and USD/JPY had a mild dip on the data release, but returned to trade higher at around 111.10 level. AUD/USD was bid up to 0.7120 during Asian session, reversing overnight decline. AUD/NZD was stuck in sideway movements around 1.0420. EUR/USD bounced back and was last seen at 1.1280. Cable edged higher to 1.2867.

Still To Be Released:

Data:

DE: Wholesale Price Index (Jan) % m/m (Prev: -1.2)

DE: Wholesale Price Index (Jan) 4ct: % y/y (Prev: 2.5)

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

05:30 GMT - NL: CPI (Jan) % y/y (Prev: 2)

05:30 GMT - NL: HICP (Jan) % m/m (Prev: 0)

05:30 GMT - NL: HICP (Jan) % y/y (Prev: 1.9)

05:30 GMT - NL: Trade Balance (Dec) bn (Mkt: 7 Prev: 7.1)

07:00 GMT - DE: GDP (sa) (4Q P) 4cast: 0.1% q/q (Mkt: 0.1 Prev: -0.2)

07:00 GMT - DE: GDP (wda) (4Q P) % y/y (Mkt: 0.7 Prev: 1.1)

07:00 GMT - FI: GDP (Dec) % (Prev: 1.8)

07:30 GMT - CH: Producer & Import prices (Jan) % m/m (Mkt: -0.4 Prev: -0.6)

07:30 GMT - CH: Producer & Import prices (Jan) % y/y (Mkt: -0.2 Prev: 0.6)

10:00 GMT - EU: GDP (SA) (Q4 P) 4cast: 0.2% q/q (Mkt: 0.2 Prev: 0.2)

10:00 GMT - EU: GDP (SA) (Q4 P) 4cast: 1.2% y/y (Mkt: 1.2 Prev: 1.2)

10:00 GMT - GR: CPI (Jan) % y/y (Prev: 0.6)

10:00 GMT - GR: HICP (Jan) % y/y (Prev: 0.6)

11:00 GMT - IE: CPI (Jan) % m/m (Prev: 0)

11:00 GMT - IE: CPI (Jan) %y/y (Prev: )

11:00 GMT - IE: HICP (Jan) % m/m (Prev: )

11:00 GMT - IE: HICP (Jan) %y/y (Prev: -0.1)

13:30 GMT - CA: House Price Index (Dec) % m/m (Mkt: 0 Prev: 0)

13:30 GMT - CA: Manufacturing sales (Dec) 4cast: 0% m/m (Mkt: 0.4 Prev: -1.4)

13:30 GMT - US: Initial Claims (09-Feb) k (Mkt: 225 Prev: 234)

13:30 GMT - US: PPI (Jan) 4cast: 0% m/m (Mkt: 0.1 Prev: -0.1)

13:30 GMT - US: PPI (ex Food & Energy) (Jan) 4cast: 0.3% m/m (Mkt: 0.2 Prev: -0.1)

13:30 GMT - US: Retail Sales (Dec) 4cast: -0.1% m/m (Mkt: 0.1 Prev: 0.2)

13:30 GMT - US: Retail Sales (ex Autos) (Dec) 4cast: -0.2% m/m (Mkt: 0 Prev: 0.2)

15:00 GMT - US: Business Inventories (Nov) % (Mkt: 0.2 Prev: 0.6)

Events & Auctions:

UK: MPs due to vote on May's Brexit plans

IE: Expected: Tap of RFGB 05/29 (EUR 0.5bn)

09:30 GMT - UK: BoE's Vlieghe speaks on the Economic Outlook

10:30 GMT - UK: 2028 Bonds Auction 1.625% (GBP 2.25bn)

16:00 GMT - US: Fed's Harker speaks in Newark

16:30 GMT - US: 4wk Bills Auction (USD 50bn)

16:30 GMT - US: 8wk Bills Auction (USD 35bn)

17:00 GMT - NO: Norway Central Bank's Olsen delivers annual address

19:10 GMT - NZ: RBNZ's Orr speaks

20:45 GMT - AU: RBA's Kent speaks in Melbourne


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