Forex - Chart USD/MYR Update: Bulls regained upmove


 00:44 (GMT) 17 Apr

  [Forex Charts]

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Chart USD/MYR Update: Bulls regained upmove (0101-KKTH-C01)

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Forex - Asia Open - Overnight Highlights


 23:37 (GMT) 14 Apr

 [Forex Highlights]

Asia Overnight Highlights - 15 April 2019

ASIA OUTLOOK

Strong Chinese money supply and credit data, and results from JP Morgan Chase, lifted equities and USD/JPY and had USTs under pressure. AUD/USD was also firm while EUR/JPY buying helped push EUR/USD above 1.13.

Majors FX Highlights

The Bloomberg dollar spot index traded with a downside bias overnight on Friday, dipping to lows of 96.745, as downbeat Michigan consumer confidence did little to support sentiment on the dollar and offset the losses against the euro and sterling. Some recovery to 96.900+ levels was however seen later in the session, but the 97 handle remained intact.

EUR/USD saw a bullish momentum from some positioning and momentum gains, and broke above 1.1300 for the first time since early March, although a return to the big figure was seen in late NY/early Asian hours this morning. GBP/USD played some catch-up in afternoon trading, but failed to hold highs above 1.31. USD/JPY was seen with an upside bent as well, breaking above 112 in late hours as risk sentiment improved with strong earnings and China credit data. AUD/USD also rallied particularly hard on the news, peaking at .7192. USD/CAD fell to 1.3330 levels as rising oil prices supported the loonie.

Majors Data Highlights

US Mar import prices at +0.6% stronger than expected with Feb revised up to 1.0% from 0.6%, gains led by rebound in energy. Eurozone industrial production dropped 0.2 per cent in February from January, reversing a revised 1.9 per cent rise a month earlier, while annually it fell 0.3 per cent. Eurozone industrial production was stronger than expected in February, falling just 0.2% after an upwardly revised January rise of 1.9%.

In the US today, Empire State manufacturing data for Apr is due and late in the day Feb TICS capital flows will be released. Voting Fed dove Evans is due to speak. No other key data on the wires today.

Emerging Asia FX Highlights

USD/Asians traded mostly lower in late NY hours as risk sentiment improved following upbeat China credit data. USD/CNY 1Y NDFs traded lower in late Asian hours after the upbeat exports and credit data supported the sentiment, which saw pair dip from 6.7650 to 6.7405 eventually in NY. USD/SGD was generally seen trading around 1.3560 earlier on Friday but dropped to 1.3525 lows as risk sentiment improved on upbeat China data in the Friday afternoon. USD/IDR 1M NDFs were seen restrained at 14273 highs in the previous week, and dropped sharply to sub-14200 levels on Friday evening, printing lows of 14173. USD/INR 1M NDFs remained above 69.500-levels Friday, shrugging off the market trend for stronger Asian currencies in late Friday hours.

Emerging Asia Data Highlights

Monetary Authority of Singapore (MAS) has maintained its exchange-rate appreciation policy on April 12. MAS now sounds more neutral than it was six months ago. This comes as Singapore's GDP growth slowed to 1.3% y/y in Q1-2019, from 1.9% in Q4-2018. China's March exports jumped by 14.2% y/y while imports fell 7.6% y/y to a wider trade surplus of USD 32.64bn. India's March CPI came broadly in-line with our expectations at 2.86% y/y, although the Feb IP slowed to a 20-month low of 0.1% y/y. China's credit growth exceeded all estimates in March after a slowdown during the Lunar New Year, signaling a further firming of the nascent economic recovery ahead. Aggregate financing was 2.86 trillion yuan ($426 billion) last month, compared with about 700 billion yuan in February. Broad M2 money supply increased 8.6 percent, the fastest pace since February 2018.

Eyes today on trade data from India and Indonesia, and India's March WPI is also due. Philippines' March remittances data may also take some focus.

OVERNIGHT NEWS HIGHLIGHTS

- US Mar import prices +0.6% vs 0.4% exp.

- US Apr preliminary Michigan CSI fell to 96.9 from 98.4 vs 98.2 exp.

- VIX index: 12.01 (-7.76%)

- Gold Spot: $1,291.02/oz (+0.05%)

- ICE Brent front contract: $71.33 ($-0.22)

- Nymex WTI front contract: $63.58 ($-0.31)

- Reuters/Jefferies Commodities Index: 188.36 (+0.55%)

- 10y UST: 2.565% (+7bp) (Asia morning)

- DJI: 26,412.30 (+1.03%); S&P: 2,907.41 (+0.66%); Nasdaq: 7,984.16 (+0.46%)

ASIA NEWS

China: China will maintain a prudent monetary policy stance this year and keep the yuan in line with fundamentals as it uses fiscal tools to spur growth, according to central bank Deputy Governor Chen Yulu. - BBG

China: The U.S. is open to facing "repercussions" if it doesn't live up to its commitments in a potential trade deal with China, Treasury Secretary Steven Mnuchin said, in a sign that the two sides are edging closer to an accord. - BBG

Indonesia: Indonesian President Joko Widodo, bidding for a second five-year term to run the world's largest Muslim-majority nation, arrived in Saudi Arabia for a minor pilgrimage to the holy city of Mecca days before the election. - BBG

India: India's central bank chief said the expansion of the world's fastest-growing major economy needs to pick up to around 8 percent to deal with poverty and other challenges. - BBG

CURRENCIES

The positive bias in EUR/JPY that started in Asia continued in Europe, with EUR/JPY advancing another 50 pips from the European open and EUR/USD breaking above 1.13 for the first time since early March. The EUR/JPY strength in Asia looks to have been triggered by an M&A flow rather than any real news, and the rise in Europe consequently looks to be more about positioning and momentum than a change in market perceptions. But the EUR may also have gained some support from a Thursday report suggesting that the ECB was unlikely to embrace tiering of interest rates to moderate the impact of negative rates on Bank profitability. Eurozone industrial production was also stronger than expected in February, falling just 0.2% after an upwardly revised January rise of 1.9%.

Strong Chinese money and credit data in March helped support risk appetite, after there was little reaction to the mixed Chinese trade numbers. AUD/USD rallied particularly hard on the news, peaking at .7192, while USD/JPY also got a further boost, eventually touching above 112 in North American trade.

GBP underperformed the EUR and AUD, and EUR/GBP traded up to 0.8656, the highest since March 22. GBP/USD played some catch-up in afternoon trading, but failed to hold highs above 1.31.

BONDS

USTs went into Friday looking vulnerable with longs offside and the strong China credit data followed up by JPMorgan earnings beat fueled further bailing, led by the belly as S&P broke out to fresh highs. US5s cleared the 21 Mar + yield range ceiling. A softer UoM confidence, particularly on inflation expectations, slightly stemmed the tide. 2s +3.7bps @ 2.39%, 5s +6.3bps @ 2.37%, 10s +6.1bps @ 2.56%, 30s +4.4bps @ 2.97%.

Agency Spreads: Freddie/Fannie 5s -0.4/-0.7 bps, 10s -1.9/+1.0 bps.

Swap Spreads: 2s +1.28bps, 5s +0.26bps, 10s +0.18bps.

EQUITIES

Strong results from JP Morgan Chase helped financials lead an equity advance, despite Wells Fargo underperforming after their results. Positive Chinese data, money supply and credit more than mixed details on the trade balance, also supported the market.

ASIA CURRENCIES

USD/CNY: 1Y NDFs traded lower in late Asian hours after the upbeat exports and credit data supported the sentiment, which saw pair dip from 6.7650 to 6.7405 eventually in NY. On Friday, PBoC fixed mid-point at 6.7220 vs. previous close of 6.7190. Onshore spot USD/CNY finally broke above the 6.7200 handle, rising to 6.7233 but dropped sharply to 6.7010 in the afternoon. For USD/CNY, 6.7406 resistance should hold in the light of recent stability.

USD/CNH: Pair was held below the 6.7300 handle on Friday and saw a strong downside bias to dip to 6.7050-levels in the NY session as China credit data and a wider trade surplus supported sentiment. The range of 6.7050-6.7319 to hold.

USD/SGD: Pair was generally seen trading around 1.3560 earlier on Friday but dropped to 1.3525 lows as risk sentiment improved on upbeat China data in the Friday afternoon. MAS kept policy settings unchanged as expected by consensus expectations. Statement looked to be neutral at first glance. MAS revised down core inflation forecast by 0.5ppt. Singapore GDP softened in Q1 due to a fall in manufacturing activity. Singapore retail sales also stayed relatively weak. Watch the 1.3615 resistance for signs of more weakness.

USD/IDR: 1M NDFs were seen restrained at 14273 highs in the previous week, and dropped sharply to sub-14200 levels on Friday evening, printing lows of 14173. Onshore spot traded horizontally around 14150 earlier on Friday but a sharp drop to sub-14100 levels was seen into the close. Tensions are likely to pick up in Indonesia this week as elections approach this week. March trade data will be eyed on Monday, but expect FX markets to remain quiet. We expect some stability in the pair ahead of the elections, and key levels at 14255 and 14035 should remain intact.

USD/INR: 1M NDFs remained above 69.500-levels Friday, shrugging off the market trend for stronger Asian currencies in late Friday hours. Onshore spot traded choppily on either side of 69.2000 on Friday. Downside below 68.5000 appears shallow with voting underway. We expect some upside pressures, but the 69.8000 area should cap gains.

DATA RELEASES DUE TODAY

n/a GMT - PH: Overseas Remittances (Feb) 4cast: 3.5% y/y (Mkt: 3.5 Prev: 4.4)

n/a GMT - PH: Overseas Remittances (Feb) USD bn (Prev: 2.484)

n/a GMT - IN: Exports (Mar) 4cast: 3.0% y/y (Prev: 2.4)

n/a GMT - IN: Imports (Mar) 4cast: -7.0% y/y (Prev: -5.4)

n/a GMT - IN: Trade Balance (Mar) 4cast: -9.825USD bn (Mkt: -9.5 Prev: -9.5954)

04:00 GMT - ID: Exports (Mar) 4cast: -12.00% y/y (Prev: -11.33)

04:00 GMT - ID: Imports (Mar) 4cast: -10.50% y/y (Prev: -13.98)

04:00 GMT - ID: Trade Balance (Mar) 4cast:772 USD mn [Prev: 330]

06:30 GMT - IN: WPI (Mar) 4cast: 3.3% y/y (Mkt: 3.2 Prev: 2.93)

12:30 GMT - US: Empire State Survey (Apr) [Mkt: 6.7, Prev: 3.7]

13:00 GMT - CA: Existing Home Sales (Mar) 4cast: 4% m/m (Mkt: Prev: -9.1)

20:00 GMT - US: Net Long-term TICS Flows (Feb) USD bn (Prev: -7.2)

EVENTS & AUCTIONS

- US: Fed's Rosengren speaks in Davidson, NC

- 10:45 GMT - UK: BoE's Breeden speaks in London

- 14:30 GMT - CA: BoC Business Outlook Survey

- 15:30 GMT - US: 3mth Bills Auction

- 15:30 GMT - US: 6mth Bills Auction

- 16:00 GMT - UK: BoE's Haskel speaks in London

- 17:00 GMT - US: Fed's Evans speaks

- 17:30 GMT - EU: ECB's Villeroy speaks in New York


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