The risk-off sentiment seeped back into Asia this Thursday after the US Treasury listed China on the watch list of currency manipulators, sending the Chinese Yuan to yearly against the US dollar alongside a sell-off in the Chinese equities.
Meanwhile, the US dollar consolidated the overnight gains on hawkish Fed minutes, keeping most majors under pressure. However, the Aussie bucked the trend and rallied above 0.71 handle following a sharp drop in the Australian jobless rate that outweighed the drop in the Aussie business conditions and confidence data. The USD/JPY ´s upside was capped by risk-aversion, despite slowing Japanese exports doing little to negatively impact the Yen. The Kiwi traded better bid, finding some support from the rally in the Aussie and oil-price recovery.
Main topics in Asia
UK PM May trying to soothe EU leaders as Brussels plans for hard Brexit – Reuters
Australia’s Unemployment Rate dips to 5.0%, but Aussie Employment Change misses hopes
BoJ’s Kuroda continues to reinforce low rates strategy by BoJ
USD/CNH pops to one-week high of 6.9375
WTO’s Azevedo: Global trade system could be harmed without political intervention – Reuters
BOK’s Lee: yield differential with US not cause of financial stability
Asian stocks remain soft-footed as Japan sees surprise decline in exports
Key Focus ahead
The main focus is on the UK retail sales after the EU Brexit Summit failed to deliver any breakthrough on the Brexit deal. Only a big beat on the UK retail volumes will rescue the GBP bulls from the Brexit anxiety. Meanwhile, the EU docket remains data-dry while the Swiss sees the trade figures during early Europe.
In the NA session, the US jobless claims, Philly Fed manufacturing index and Fedspeaks will offer fresh impetus on the US dollar trades. FOMC members Quarles and Bullard are due to deliver their respective speeches later on Thursday.
EUR/USD trying to hit the brakes near 1.1500 in the post-FOMC aftermath
The EUR/USD finds itself on the low side, testing just south of the 1.1500 major handle heading into Thursday’s European market session, and another round of the EU’s EcoFin meetings.
GBP/USD: Focus on UK retail sales and confluence of 50% Fib & 100-day MA
The market is expecting September retail sales to print at -0.4% m/m, following a 0. % rise in August. The pound may pick up a bid if the retail sales beat estimates by a big margin, although, a bullish breakout would be confirmed only above the recent high of 1.3258.
UK retail sales Preview: Retail sales are set to slump in September
The total UK retail sales are expected to fall -0.8% over the month in September with core retail sales stripping the basket off motor fuel sales expected to fall also -0.2% m/m, the Office for National Statistics is expected to report on Thursday at 8:30 GMT.
Japan nationwide core CPI to rise +1.1% y/y in September – Barclays
The Barclays Research Team offers key insights on Friday’s Japanese inflation figures due to be reported at 2350 GMT.
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