Forex - Asia Highlights - Thursday, 25 April 2019


 04:25 (GMT) 25 Apr

  [Forex Highlights]

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Asia Highlights - Thursday, 25 April 2019 (0101-KPTS-C01)

US Overview:

Weak IFO data weighed on EUR/USD seeing an eventual break to fresh year to date lows. CAD slipped on a dovish BoC statement before a partial correction in Governor Poloz's press conference, but the USD was broadly strong. USD/JPY broke through 112 despite lower UST yields and quiet equities.

US Highlights:

- Bank of Canada left rates unchanged, dropped reference to future rate increases, downgraded 2019 GDP forecast.

Currencies:
The IFO survey was the main news in the European morning. All components fell in April from March and were also weaker than expected, with expectations having reflected some belief that the Brexit delay would support sentiment. While weaker than March, IFO was still above the year's low recorded in February. EUR/USD dipped below 1.12 on the news, but initially failed to sustain losses. A break below the year's lows at 1.1176 came in a second downside test during North American trade.
GBP ignored a larger-than-expected Mar public sector borrowing number. While EUR/GBP was softer, Cable was dragged down below 1.29 by EUR/USD.
USD/CAD rose through 1.35 as the BoC proved a little more dovish than expected, dropping the reference to future rate increases from the statement, as had been widely speculated, while also significantly downgrading the 2019 GDP view. However, CAD losses were partially corrected after BoC Governor Poloz said a rate hike was more likely than a cut, even under the downgraded forecast.
AUD/CAD failed to reach .95 on the BoC statement and AUD/USD extended its losses towards .70. USD/JPY saw a brief dip to 111.67 before picking up on general USD strength, with momentum accelerating once 112.00 was cleared. The BoJ meeting is awaited.

Asia FX and News:
-BOJ Maintains Policy Rate, Adjusts Forward Guidance
-NSIER: Bank of England to Keep Policy Hold until Mid-2020
-Li Says China's Economy Still Facing Downward Pressure ~ Xinhua
-The BoJ policy announcement had minimal impact on the yen. There are minor tweaks in the forward guidance, minor revisions in their forecast and other operational adjustments, but nothing impactful for the monetary policy outlook. Notably, the BoJ introduces a more specific timeline that they are committed to maintain the currently low interest rates until at least spring 2020. While this strengthens their commitment, it does not differ from what most in the market are expecting. BoJ's CPI forecast for fiscal year 2021 is at 1.6% - a gradual pick up from their lowered FY 2020 forecast - but does raises questions on the forward guidance to maintain low interest rates only until spring next year. USD/JPY stable around 112 and the next focus is on Gov Kuroda's presser later, though we doubt he will surprise market very much. Most of the moves in yen came prior to the announcement, USD/JPY eased to 112 and EUR/JPY slid to 125. While markets down under are closed, the Kiwi pares some of the losses from Wed. Elsewhere, G10 FX barely changes in the Asian hours.

Data:

JP: BoJ 10yr Yield Target (25 Apr) 0.000% (Mkt: 0.000 Prev: 0.000)

JP: BoJ MPC - Overnight Rate (25 Apr) -0.100% (Mkt: -0.100 Prev: -0.100)

Still To Be Released -

Data:

07:00 GMT - SE: Consumer Confidence (Apr) 4cast: 95 index (Mkt: 95 Prev: 94)

07:00 GMT - SE: Economic Tendency Survey (Apr) 4cast: 102 index (Mkt: 101 Prev: 101.7)

07:00 GMT - SE: Manufacturing Confidence (Apr) 4cast: 107 index (Mkt: 107 Prev: 107.5)

07:30 GMT - SE: Riksbank Interest Rate (25 Apr) 4cast: -0.25% (Mkt: -0.25 Prev: -0.25)

12:30 GMT - US: Durable Ex Transportation (Mar P) 4cast: 0.2% (Mkt: 0.2 Prev: -0.1)

12:30 GMT - US: Durable Goods Orders (Mar P) 4cast: 1.3% (Mkt: 0.8 Prev: -1.6)

12:30 GMT - US: Initial Claims (20 Apr) k (Mkt: 200 Prev: 192)

22:45 GMT - NZ: Trade Balance (Mar) NZD mn (Mkt: 131 Prev: 12)

23:30 GMT - JP: Job-to-Applicant Ratio (Mar) (Mkt: 1.63 Prev: 1.63)

23:30 GMT - JP: Unemployment (Mar) 4cast: 2.3% (Mkt: 2.4 Prev: 2.3)

23:50 GMT - JP: Industrial Production (Mar P) % m/m (Mkt: 0 Prev: 0.7)

23:50 GMT - JP: Industrial Production (Mar P) 4cast: -0.9% y/y (Mkt: -3.8 Prev: -1.1)

23:50 GMT - JP: Retail Sales (Mar P) % m/m (Mkt: 0 Prev: 0.4)

23:50 GMT - JP: Retail Sales (Mar P) 4cast: 0.52% y/y (Mkt: 0.8 Prev: 0.6)

Events & Auctions:

AU: Markets Closed for Anzac Day

SE: Swedish Central Bank announces interest rate decision

06:00 GMT - NO: Norges Bank's Olsen and Slyngstad speak in Oslo

12:30 GMT - EU: ECB's Guindos speaks in New York

15:00 GMT - US: Fed issues Manufacturing Survey for April

15:15 GMT - JP: BoJ's Kuroda speaks in Tokyo

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

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

18:00 GMT - US: 7yr Notes Auction ($32bn)


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