Forex today in Asia was a quiet start to a busy week ahead, with most majors sticking to tight trading ranges, as a typical risk-off tone prevailed amid continued Yuan weakness and increased cautiousness heading into the key central banks’ monetary policy announcements due later this week.
Among the Asia-pac currencies, the Yen traded little changed versus its American counterpart around the 111 handle, despite the BoJ’s JGB operations, upbeat Japanese retail sales data and rising Japanese 10-year bond yields. The Antipodeans were on the back foot on the back of persisting Yuan sell-off and a broadly bid US dollar following upbeat US growth figures.
Meanwhile, the Asian equities dropped dragged lower by China stocks. Both crude benchmarks traded with modest gains while gold and copper prices on Comex fell, with the yellow metal back
Main topics in Asia
US President Trump threatens another government shutdown – Reuters
As was reported earlier, US President Donald Trump has again threatened a government shutdown in an effort to force Congress to provide funding for his long-promised border wall with Mexico.
EU judges could get final say in Brexit disputes – UK Times
As reported by the UK Times, Britain is looking to concede jurisdictional power to European judges concerning key issues, a move that will surely anger hard-line Brexiteers in the UK’s parliament.
USD/CNY clocks 11-month high of 6.8370
The USD/CNY opened at 6.8159 and rose to an 11-month high of 6.8348 in early trade.
Hedge funds’ 10-year T-note net shorts hit record high – Reuters
Speculators’ net bearish bets on US 5-year and 10-year Treasury note futures rose to record highs in the week ended July 24, according to Commodity Futures Trading Commission data released on Friday.
Japan’s Suga: No comment on if BoJ to start laying groundwork for QE exit
Japan’s Chief Cabinet Secretary Suga is out on the wires now, via Reuters, making some comments on the Bank of Japan (BoJ) monetary policy decision due tomorrow.
Italy’s Deputy PM Di Maio: Euro referendum not part of Italian government plans
In an interview published in Corriere della Sera on Sunday, Italy’s Deputy PM and leader of the 5-Star Movement Luigi Di Maio noted that an Italian referendum to quit the Euro is not in the governing coalition’s contract, Reuters reports.
Yuan slump to offset China tariff pain – Goldman Sachs
In a recent client note, Goldman Sachs’ Analysts argued that the declines in the Chinese Yuan on a trade-weighted basis will offset the drag on Chinese growth from the first two rounds of US tariffs.
US Treasury Sec. Mnuchin sees at least 3% growth for next 4-5 years – Reuters
Reuters is out with comments from the US Treasury Secretary Steven Mnuchin, as he speaks about the US economic growth prospects in the coming years in an interview with ‘Fox News Sunday’.
BOJ offers to lend JPY 32.4 billion of government debt, 10Y JGB yield hit 17-month high
The news is crossing the wires via Reuters that the 10-year Japanese Government Bond (JGB) yield has risen to 0.105 percent – its highest level since February 2017.
Key Focus ahead
Heading towards Europe, markets brace for a raft of the second-tier UK macro news, including the UK mortgage approvals, money supply and net lending to individuals that will drop in all at once at 0830 GMT.
Also, in focus remains the economic confidence numbers from the Euroland due to be reported at 0900 GMT. The main event risk for today remains the German July preliminary CPI report scheduled for release at 1200 GMT. Germany’s Prelim CPI is expected to steady at 2.1% y/y in July.
Moving on, the US pending home sales data will headline the NA session ahead of the Dallas Fed manufacturing Business index release.
EUR/USD: Sidelined in a pennant pattern, eyes German CPI release
The EUR/USD technicals are biased to the bears, meaning the pair could find acceptance below 1.1598 (base of the pennant pattern) if the preliminary German consumer price index (CPI) misses estimates.
GBP/USD holding on to 1.32 as potential BoE rate hike looms ahead
Monday is a quiet showing for the GBP/USD on the economic calendar, with the GFK Consumer Confidence Survey expected for the UK late at 23:01 (forecast to hold steady at -9), as well as Pending Home Sales for the USD at 14:00 GMT.
BoJ: No immediate change to the QQE programme expected – Societe Generale
Analysts at Societe Generale offer a sneak peek at what to expect from the Bank of Japan (BoJ) monetary policy announcement and outlook report due tomorrow after 0230 GMT.
Australia: Building approvals nudged higher in June – ANZ
Analysts at Australia and New Zealand Banking Group (ANZ) expect Australia’s building approvals to advance in the month of June, despite ongoing tightening in credit availability and weaker housing finance results.
China factory growth seen cooling slightly in July – Reuters poll
According to the latest Reuters poll of 28 economists, a majority of them expect China’s manufacturing sector activity to ease slightly in the month of July, in the wake of softer domestic investment and US-Sino trade spat.
The week ahead and key events: eyes on FOMC statement & BoJ – Nomura
Analysts at Nomura offered their outlook for the week ahead and the key events.
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