Forex - Asia Highlights - Tuesday, 13 August 2019

 04:21 (GMT) 13 Aug

  [Forex Highlights]

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Asia Highlights - Tuesday, 13 August 2019 (0101-NGMD-C01)

US Overview:

Worries over China, in particular Hong Kong, as well as Argentina, sent equities and bond yields, particularly at the long end, sharply lower, though USD/JPY found support near 105. The session also saw a short squeeze on the GBP, though GBP came off its highs. A dip and rebound in EUR/USD seems to have been led by EUR/GBP.

US Highlights:

- US Jul budget deficit $119.7bn vs $120bn exp.

Despite plunging equities and bond yields, FX trade was moderate. USD initially saw gains against EUR, helped by a large EURGBP sell order which pushed EURUSD around 35 pips lower. However, USD gains were largely reversed by the end of the morning as Hong Kong unrest triggered risk aversion, benefitting JPY and CHF, and to a lesser extent EUR, though USD gained ground against commodity currencies.
EUR/USD recovered from a low of 1.1160 to a high of 1.1230. USDJPY fell as low as 105.03 before a modest recovery, which could not reach 109.50 with equities and UST yields continuing to weigh.
There was no data of any significance. The HK concerns appear to have been triggered partly by the occupation of HK airport by protesters, which has led to the airport being closed. There were also reports of a buildup of armed Chinese police near the border.
GBPUSD advanced above 1.21 but could not hold there. EURGBP after slipping below .9250 recovered to near .93. Weekend reports suggested the UK opposition Labour Party are getting ready to call a vote of no confidence in the Johnson government in early September, though this was widely expected and is not seen to have been the cause of the GBP recovery.

Asia FX and News:
-RBA Kent: RBA Not Unemployment Targeters, We're Inflation Targeters
-Australia July business confidence rose to 4 from 2 points; business conditions fell to 2 from 4 points
-China's July Foreign Direct Investment Rise 8.7% Y/y
-With no clear catalysts, low yielders underperformed higher yielders in Asia. USD and the commodities trio led the G10 though E-minis is only a shade higher from the NY close, while CHF notably weakens across the board. USD/JPY and EUR/CHF recovers from Monday's lows. USD/JPY rose to the mid-pt of the 105 handle but saw resistance above that. USD/CHF erased all the losses from the NY session, back above 0.9720. The PBoC fix was once again weaker but not as much as market estimates, hence not bothering markets too much. Australia business confidence improved though details were weak. Regardless, AUD was modestly lifted. RBA Kent's comments was in line with Lowe, hence was limited impact on the AUD.


JP: PPI (Jul) 0.0% m/m (Mkt: 0.1 Prev: -0.5)

JP: PPI (Jul) -0.6% y/y (Mkt: -0.5 Prev: -0.1)

AU: NAB Business Conditions (Jul) 2 (Prev: 4R)

AU: NAB Business Confidence (Aug) 4 (Prev: 6)

Still To Be Released -


06:00 GMT - DE: Wholesale Price Index (Jul) % y/y (Prev: 0.3)

07:00 GMT - ES: CPI (Jul F) % m/m (Mkt: -0.6 Prev: -0.6)

07:00 GMT - ES: CPI (Jul F) % y/y (Mkt: 0.5 Prev: 0.5)

07:00 GMT - ES: Flash HICP (Jul F) % m/m (Mkt: -1.1 Prev: 1.1)

07:00 GMT - ES: Flash HICP (Jul F) % y/y (Mkt: 0.7 Prev: 0.7)

08:30 GMT - UK: Average Earnings (incl. bonus) (Jun) 4cast: 3.6% 3m y/y (Mkt: 3.7 Prev: 3.4)

08:30 GMT - UK: ILO Unemployment Rate (Jun) 4cast: 3.8% (Mkt: 3.8 Prev: 3.8)

09:00 GMT - DE: ZEW (Current Conditions) (Aug) index (Mkt: -6.3 Prev: -1.1)

09:00 GMT - DE: ZEW (Economic Sentiment) (Aug) index (Mkt: -28 Prev: -24.5)

10:00 GMT - US: NFIB Small Business Optimism (Jul) (Mkt: 104 Prev: 103.3)

12:00 GMT - DE: CPI (Jul F) % m/m (Mkt: 0.5 Prev: 0.5)

12:00 GMT - DE: CPI (Jul F) % y/y (Mkt: 1.7 Prev: 1.7)

12:00 GMT - DE: HICP (Jul F) % y/y (Mkt: 1.1 Prev: 1.1)

12:30 GMT - US: CPI (Jul) 4cast: 0.3% m/m (Mkt: 0.3 Prev: 0.1)

12:30 GMT - US: CPI (ex Food & Energy) (Jul) 4cast: 0.2% m/m (Mkt: 0.2 Prev: 0.3)

19:00 GMT - DE: HICP (Jul F) % m/m (Mkt: 0.4 Prev: 0.4)

23:50 GMT - JP: Core Machine orders (Jun) 4cast: -3.4% y/y (Mkt: -1.1 Prev: -3.7)

Events and Auctions:

22:00 GMT - AU: RBA's Kent speaks in Sydney

08:45 GMT - ES: Bills Auction

09:00 GMT - IT: Bonds Auction

09:30 GMT - EU: ECB Main Refinancing Operation Result

09:30 GMT - UK: 2049 1.75% Bonds Auction (GBP 2bln)

15:30 GMT - US: 52wk Bills Auction (USD 28bln)

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