Risk took a hit in Asia this Friday, as risk-off sentiment seeped back following Thursday’s inconclusive NAFTA talks between the US and Canada and also amid renewed US-China trade tensions and Emerging Markets (EM) sell-off. The US dollar traded mostly firmer amid risk-off market profile, weighing down on most majors.
The Canadian dollar was the biggest loser, as traders eye fresh NAFTA talks due later today. Meanwhile, the Antipodeans also slipped, despite upbeat Official Chinese manufacturing PMI. The pound was supported by the recent Brexit optimism while the Euro attempted a bounce back towards the 1.1700 level. The USD/JPY pair treaded water near 111 handle, as negative Asian equities and subdued oil prices kept the buoyant tone intact around the Yen.
Main topics in Asia
Japan’s Aso: Monetary policies are normalizing in developed nations
Japanese Finance Minister Aso is out on the wires stating that the monetary policies are normalizing in developed nations.
Canada’s Freeland: NAFTA talks making progress
Canada’s Foreign Minister Freeland came out on the wires last hours, via Reuters, speaking about the North Atlantic Free Trade Agreement (NAFTA).
PBOC drains a net CNY 170 bln this week
PBOC drains a net CNY 170 bln via open market operation (OMOs) this week against a net CNY 40 bln injection last week.
RBA: High debt levels could complicate future policy decisions
The Reserve Bank of Australia (RBA) published its corporate plan on Friday, in order today make future policy decisions.
USD/TRY Technical Analysis: Bulls are back in town, TRY puts gain value
Lira (TRY) took a beating on Thursday on reports that the Turkish central bank’s deputy governor and Monetary Policy Committee member Erkan Kilimci is set to resign.
Canada’s TradeMin: Possibility of the US trade deal on Friday
Canadian Trade Minister is on the wires now, via Bloomberg, commenting on the NAFTA deal.
USD/INR hits fresh record high above 71.00
The USD/INR pair hit a new record high of 71.26 earlier today. The Indian rupee continues to lose altitude, courtesy of rising oil prices and the resulting current account deficit fears.
Key Focus ahead
Friday sees another light EUR calendar, with the only key risk event likely to be the Eurozone flash CPI estimate due at 0900 GMT alongside the bloc’s jobless rate. Among other releases, the German retail sales will be reported at 0600 GMT. The UK docket has no significant macro news, however, the low impact Nationwide Housing prices data will offer some trading incentives to the GBP markets.
In the NA session, the Canadian RMPI data will be released ahead of the US Chicago PMI and revised UoM consumer sentiment. However, the economic data are likely to play a second fiddle to the US-Canada NAFTA talks and the EU-UK Brexit talks scheduled later on Friday.
EUR/USD: Focus on Fitch’s assessment of Italy’s credit worthiness and Eurozone inflation
The pair may suffer a bearish reversal if the ratings agency Fitch downgrades Italy, citing fiscal concerns, sending the 10-year Italy-Germany bond yield differential to fresh five years. On the other hand, the yield differential could narrow sharply “¦
GBP/USD side-lined near 1.3010 ahead of Barnier-Raab’s meeting
The GBP/USD pair looks to extend its Asian consolidative mode into Europe, as a sense of caution prevails heading into a fresh round of Brexit talks between the UK and European Union (EU) scheduled later on Friday.
How to trade the Euro-zone Flash CPI with EUR/USD
The fresh inflation report is watched closely by the ECB and moves the Euro. The Market Impact Tool shows trading opportunities in both upside and downside surprises on this event.
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