FX today was a quiet affair today in Asia, as investors remained on the sidelines amid Thanksgiving holiday-thinned trading. The US dollar saw some softness against its main peers while the Asian markets traded mixed amid a lack of fresh catalysts. The in-line with expectations Japanese CPI numbers also had little impact on the markets, as minimal volatility and low volumes prevailed.
However, the Kiwi witnessed heavy selling pressure and was knocked down to the 0.68 handle while its OZ peer, the Aussie also traded on the back foot near 0.7250. The USD/JPY pair treaded water around the 113 handle, unable to find a clear direction amid fresh doubts over the Fed rate hike outlook. Both the EUR and the GBP were better bid, but the bulls appear not out of the woods yet. Meanwhile, oil and gold prices traded modestly flat, consolidating the moves seen on a volatile Wednesday.
Main Topics in Asia
German Finance Ministry sees easing growth in the future
Japan National CPI clocks in at 1.4% as expected
Goldman Sachs on possible early policy adjustment from the BoJ
Japan to spend JPY 2 trillion to counter the impact of 2019 sales tax hike
UK PM Theresa May had “good” talks with Spanish PM Sanchez over Gibraltar matter
Irish FinMIn Coveney: Irish parliament overwhelmingly backs Brexit divorce deal
Canada unveils budget tax break, set to widen deficit further – Reuters
Gold is chipping away at key trendline hurdle as investors assess Fed outlook
German car bosses invited to White House to discuss tariffs – Handelsblatt
Key Focus Ahead
We have a data-quiet European session heading into the Thanksgiving price-action, with no first-tier economic data due for release. The second-liner Swiss industrial production for Q3 will be reported at 0815 GMT. Meanwhile, the ECB monetary policy meeting accounts due at 1230 GMT could offer some fresh incentives to the EUR, GBP traders. However, the Brexit-related and Italian political headlines will continue to remain the main market drivers amid low liquidity.
In the NA session, the Canadian Financial review report will be published at 1430 GMT, following the BOC policymaker Wilkins” speech at 1445 GMT. At 1500 GMT, the Eurozone consumer confidence figures for November will drop in, as the US markets celebrate the Thanksgiving holiday.
Besides, we have plenty of central bankers” speeches that will cover:
0915 GMT – ECB’s Angeloni due to speak at a Banking Union conference.
1115 GMT – ECB’s Angeloni again.
1630 GMT – ECB’s Weidmann, Knot and Visco to speak at their respective events.
1700 GMT – ECB’s Mersch.
2055 GMT BOE board member Saunders.
EUR/USD: Italy-German yield differential retreats from 5-yr highs ahead of ECB minutes
The crucial support of 1.1359, however, would come into play if the ECB minutes show policymakers are worried about the rise in Italian bond yields and are considering abandoning plans to end the QE program in December.
GBP/USD hobbled at 1.2780 as the well-dented Brexit can gets another kick
The GBP/USD is seeing choppy action in Thursday’s pre-London market session, bouncing between 1.2770 and 1.2790, with thin liquidity on the cards as GBP traders await further developments on Brexit.
The markets have been remarkably muted
Markets have been remarkably muted, even by holiday standards as we’re left to mull of the markets forever changing landscape.
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