Forex today in Asia witnessed good two-way businesses, driven by the US dollar dynamics and the price-action surrounding the Treasury yields. Also, a solid rise in the Yuan against its American counterpart amid the recent US-China trade truce dominated the sentiment across the financial markets so far this Tuesday.
Among the Asia-pac currencies, the USD/JPY pair stalled its march towards the 114 handle and reversed sharply to test the 113 level, as the Yen regained strength following the sell-off in the Treasury yields and a rally in its Chinese counterpart, the Yuan. The Antipodeans also benefited from the Yuan upsurge, but the gains were limited by RBA’s status-quo and tumbling Asian equities. The Asian indices slipped amid stronger currencies that usually weigh on the export-oriented stocks.
Both crude benchmarks traded nearly 0.80% higher while gold prices on Comex firmed up to test the 1250 mark, as the bulls await the sentiment on the European open for fresh trading impetus.
Main Topics in Asia
PBOC Governor Yi: Will keep monetary policy flexible – Reuters
US 10-year treasury yield drops below 200-day MA for the first time since November 2017
China considering lowering tariffs on US car imports – China Daily
Saudi oil output hit record high in November – Bloomberg
South Korea, US to hold senior economic dialogue on Dec 7th
Doubts on the rise about the US-China ceasefire – Reuters
Reserve Bank of Australia leaves cash rate unchanged at 1.50%
China’s 10-year bond yield hits lowest in 19 months
Key Focus Ahead
The EUR calendar remains relatively light today, with no first-tier macro news from the Euroland while the second-liner PPI numbers could offer some incentives to the traders. From the UK docket, the construction PMI for November will be released at 0930 GMT.
In the NA session, the Canadian labor productivity data will drop in at 1330 GMT, followed by New Zealand’s GDT price index due around at 1430 GMT. Also, in focus remains the API weekly crude oil stocks data that will be published at 2130 GMT.
Apart from the macro data, we have the following central bankers due to speak later today.
0915 GMT: BOE Governor Carney’s testimony on the Brexit withdrawal agreement
1500 GMT: FOMC member Williams
1800 GMT: BOE MPC member Vlieghe
EUR/USD: Euro may pick up a strong bid on sliding treasury yields and rising yuan
The EUR/USD could challenge a key resistance at 1.1402 today, tracking the slide in the 10-year treasury yield and the rise in the Chinese Yuan – an anchor for global markets.
GBP/USD mired in 1.2750 ahead of BoE Gov Carney’s Brexit agreement testimony
Today sees the Bank of England’s (BoE) Governor Mark Carney testifying before the Treasury Select Committee, alongside three of his Deputy Governors, in London today, with the actions slated to start at 09:15 GMT.
Gold seen rising to $ 1350 in the next 12 months – Goldman Sachs
In its latest client note, analysts at Goldman Sachs upped the gold price forecasts for the next 12 months.
EUR/USD risks downside this week – Barclays
In the view of the Barclays Research Team, the EUR/USD pair is exposed to downside risks this week amid an expected broad-based US dollar rebound.
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