Forex - Asia Highlights - Monday, 14 October 2019


 04:44 (GMT) 14 Oct

  [Forex Highlights]

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Asia Highlights - Monday, 14 October 2019 (0101-PKLJ-C01)

US Overview:
Optimism on Brexit and US-China trade talks persisted, buoying the GBP. USD/JPY equities and bond yields. Response to Trump's announcement of a phase 1 deal late in the day was underwhelming. Strong employment data gave the CAD a sharp lift.

US Highlights:
- Trump announced phase 1 deal with China, tariffs scheduled to rise on October 15 suspended, no decision on those scheduled for December.
- Canada Sep employment +53.7k vs 7.5k exp, unemployment fell to 5.5% from 5.7% vs 5.7% exp.
- US Preliminary Oct Michigan CSI rose to 96.0 from 93.2 vs 92.0 exp.

Currencies:
GBP/USD pushed up to 1.27 and EUR/GBP down to .87, as various banks revised their Brexit outlooks, increasing expectations of a deal after the positive Johnson/Varadkar meeting on Thursday. Early comments from EU Council president Tusk, who said that although he had received positive signals from Ireland, there was no guarantee of a deal and time was practically up saw only a brief dip. The EU started serious negotiations on the new deal proposals and the DUP indicated they were not necessarily opposed.
There was also a generally positive risk tone in other markets as expectations of a US/China deal continued to build. USD/JPY extended gains above 108.50. AUD/USD continued to gain ground above .68, while EUR/CHF moved up to 1.10, its highest level for nearly a month. EUR/USD, supported at 1.10, reached 1.1060. Announcement of a phase 1 deal late in the day got an underwhelming response.
Canadian employment data was much stronger than expected, with employment rising 53.7k m/m and the unemployment rate falling to 5.5% from 5.7%. USD/CAD fell nearly a big figure on the news below 1.32.

Asia FX and News:
-EU Said Johnson's Brexit Plan Not Good Enough Ahead of Summit
-DUP's Dodds Says Proposed Brexit Deal Unrealistic ~ Repubblica
-Trump Said 'Ready to Go' on Turkey Sanctions as Troops Leave
-N.Z. Sept. Services Index Falls 0.2 Pts M/m to 54.4
-China's Exports and Imports Worse Than Expected in September
-Minor moves in FX as markets digest the mini-trade deal. Markets welcomed the cooperation but not convinced this could be the turning point for slowing global growth. USD, JPY and CHF stood firm. NZD/USD a notable loser, fell to test 0.63, likely to be flow-driven. AUD/USD capped under 0.68 following a failed attempt to rise above. USD/JPY came off Friday's high but still firmly above 108. China imports and exports both below expectations, while trade surplus was larger than expected. Yuan continues to strengthen. GBP/USD fell under 1.26 as weekend Brexit headlines pares back some expectations for a Brexit deal after EU warning but the dip has retraced partially.

Data

05:00 GMT - FI: CPI (Sep) 4cast: % m/m (Mkt: Prev: 0.4)

05:00 GMT - FI: CPI (Sep) 4cast: % y/y (Mkt: Prev: 1.1)

06:00 GMT - DE: Wholesale Price Index (Sep) 4cast: % y/y (Mkt: Prev: -1.1)

09:00 GMT - EU: Industrial production (Aug) 4cast: -2.3% y/y (Mkt: -2.6 Prev: -2.0)

Events

07:00 GMT - SE: Riksbank executives meet

12:10 GMT - UK: BoE's Cunliffe speaks in London


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