12 January 2017
Asia FX and News -
+ BBG: Japan's current-account surplus for November was JPY1.42trn, underpinned by a drop in the value of imports compared to the previous year.
+ BBG: Japanese investors bought the largest amount of Dutch sovereign debt in nearly 4 years in November, turned net sellers on the U.S. for the first time in a year.
+ China's State Council issued guidelines to help optimize state investments to shore up its bloated state- owned enterprises.
+ The USD remained under pressure after the turnaround through and after the Trump presser, USD/JPY close to the US session lows at 114.40 (vs 114.25). EUR/USD and Cable were also underpinned, as too the commodity currencies with gold helping keep AUD on top of the pile.
Nikkei and JGBs -
+ N225 closed -1.19% at 19134.70. 10 year JGBs yield 0.045%.
European FX and News -
+ The fast money couldn't resist the lure of stops at 1.0650 on EUR/USD though the follow through was limited to 1.0664 and the pair has drifted lower since, though remaining well clear of 1.0600.
+ More weight was added to USD/JPY as equities headed lower from the open, the low 113.73 before general demand for the USD resurfaced and we saw a return to the 114 handle. We have yet to hear any comment from MoF officials on rapid moves, but we doubt they are far away.
+ Cable is sticking fairly close to EUR/USD with EUR/GBP comfortably below .87 but GBP/JPY already having seen one dip below140.00.
+ The CAD has made some ground back against the AUD with crude pushing a shade higher, the Saudi's saying they expect eth new quotas to be adhered to (though what else are they going to say?). AUD/USD found some sellers on an initial break through .7500 (to .7515) but the dip has been modest; the NZD has been keeping pace.
+ We have seen the first real movement of 2017 on the Scandies with EUR/SEK stepping down to trade below 9.50 as CPI came in above expectations. The minutes of the latest Riksbank meeting again warn against too rapid an appreciation of the SEK, though a EUR600mn expiry at 9.50 today should help that cause.
Bonds and Equities -
+ The Bund curve is adhering to the wider risk-off tone with outperformance towards the long and wider spreads to the periphery. The slightly firmer GBP Is not impacting Gilts.
+ Equities are under pressure, the Dax down around 0.4%, FTSE and Eurostoxx marginally better, down 0.15%.
+ France: Dec HICP (Final) 0.8% y/y (Prev: 0.8 Mkt: 0.8); Dec HICP (Final) 0.3% m/m (Prev: 0.3 Mkt: 0.3)
+ France: Dec CPI (Final) 0.6% y/y (Prev: 0.6 Mkt: 0.6); Dec CPI (Final) 0.3% m/m (Prev: 0.3 Mkt: 0.3)
+ Sweden: CPI inflation rose by 0.5%m/m in December which pulled up the y/y rate to 1.7%y/y from 1.4%y/y in November. This was slightly above both the consensus and the Riksbank's 1.6%y/y forecast. In the meantime the underlying rate (CPIF) also rose by 0.5%m/m, which corresponds to 1.9%y/y (prev: 1.6%y/y), which was above consensus and Riksbank's 1.8%y/y projection.
+ Eurozone: November industrial production rose by 1.5%m/m after 0.1%m/m in October (revised from -0.1%m/m) and this is stronger than market expectations for a 0.6%m/m increase. The y/y rate has at the same time risen sharply to 3.2%y/y from 0.8%y/y in October (revised from 0.6%).
Still To Be Released -
13:30 GMT - CA: House Price Index (Nov) % m/m (Mkt: 0.3 Prev: 0.4)
13:30 GMT - US: Import Price Index (Dec) % m/m (Mkt: 0.7 Prev: -0.3)
13:30 GMT - US: Initial Claims (42742) k (Mkt: 255 Prev: 235)
21:45 GMT - NZ: Retail Card Spending (Dec) % m/m (Mkt: 1 Prev: -0.1)
Events & Auctions:
EU: EU's Juncker Speaks in Geneva
EU: EU's Vestager Speaks in Copenhagen
12:00 GMT - SE: Riksbanks Meeting Minutes
12:30 GMT - EU: ECB Publishes Account of Monetary Policy Meeting
13:30 GMT - US: Fed's Harker Speaks in Malvern, Pennsylvania
13:45 GMT - US: Fed's Evans Speaks in Naples
17:30 GMT - US: Fed's Lockhart Speaks in Naples
18:00 GMT - US: 30y bond auction - USD 12.00 Bn (Act)
18:15 GMT - US: Fed's Bullard Speaks in New York
18:45 GMT - US: Fed's Kaplan Speaks in Dallas
22:30 GMT - US: Fed's Yellen Speaks in Washington
22:45 GMT - NO: Norges' Nicolaisen Speaks in Oslo