The US dollar consolidated the overnight bounce across the board in Wednesday’s Asian trading, as most majors breathed a sigh of relief. The Antipodeans benefited the most amid a bounce in oil prices while the Loonie traded better bid near the 1.33 handle. The Aussie extended the bounce towards the 0.7250 level, despite the risk-off action on the Asian equities. The Asian stock markets dropped amid growing global economic growth concerns. The USD/JPY pair struggled to take out the 113 handle, as negative equities outweighed the rally in the Treasury yields while the greenback also stalled its recovery-mode from two-week troughs. Both the Euro and the GBP traded modestly flat heading into the two key events risks on the European political front scheduled later today.
Main Topics in Asia
EU ready to take steps to discipline Italy – Reuters
US Trade Rep: China has not sufficiently changed practices
US tariffs punishing US retailers – Bloomberg
Voters back UK PM Theresa May as Rees-Mogg coup attempt stalls – UK Times
India’s crude oil imports rise to highest level in at least 7 years – Reuters
Asian stocks open on the downside as Japan, Australia continue Wall Street’s slump
Goldman Sachs: oil price sell-off due to concerns of excess supply in 2019 – Reuters
Moody’s: China’s GDP growth to slow to 6% in 2019
Key Focus Ahead
Wednesday marks an important as well as an eventful day, as the two key decisive events are scheduled from Europe, which are likely to set the tone for the markets in the coming months. The European Union (EU) judgment on the Italian budget is likely to be announced at 1100 GMT that will have a significant impact on the common currency while the meeting between the UK PM Theresa May and the European Commission’s President Juncker, due at 1630 GMT, is likely to be centered on the Brexit deal issue and any outcome will stir the GBP markets.
Calendar-wise, we have a light EU session, with the only UK public sector net borrowings data due at 0930 GMT while the ECB non-monetary policy meeting will be held at 0800 GMT. In contrast, the US docket appears eventful, with a slew of macro news due at 1330 GMT that includes the weekly jobless claims and durable goods. At 1500 GMT, traders will watch for the US existing home sales and UoM consumer sentiment ahead of the EIA crude stocks data due at 1530 GMT that will wrap up a pre-Thanksgiving trading session.
EUR/USD charts bearish outside-day as Italy-German yield differential hits 5.5-year high
The EUR/USD is on the defensive ahead of the European Union’s official response to Italy’s draft budget. The common currency charted a bearish outside-day candle yesterday, signaling the recovery rally from the recent low of 1.1215 likely ended at the high of 1.1472 yesterday.
GBP/USD flat-lining as markets brace for further Brexit difficulties, UK PM May and EU’s Juncker to meet
Little else remains on the data docket for Wednesday, but the UK’s Prime Minister Theresa May and the European Commission’s Chief, Jean Claude Juncker are slated for a meeting today for Brexit deal discussions.
US Durable Goods Orders Preview: Business investment to resume
The US Census Bureau publishes its Report on Durable Goods – Manufacturers’ Shipments, Inventories, and Orders on Wednesday, November 21st at 8:30 am EST, 15:30 GMT.
US: Key economic events ahead – Barclays
The Barclays Research Team offers key insights on today’s key US economic data releases due on the cards from 1330 GMT.
Japan’s core CPI seen unchanged for third straight month in October – HSBC
Analysts at HSBC Bank offer a brief preview of the Japanese CPI report slated for release on Thursday at 2330GMT.
November 25th EU Brexit Summit: What to expect? – Barclays
The Barclays Research Team offer their expectations on Sunday’s (Nov 25th) highly anticipated EU Brexit Summit.
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