An eventful and busy Thursday ´s Asia session, characterized by the risk-on market profile amid the latest reports on Brexit progress, China stimulus plans and upbeat Asia-pac economic data. The Asian stocks traded mixed, but the Chinese equities rallied, lifting the overall market sentiment. The risk currencies such as the Aussie, Kiwi and pound sharply higher while the Euro, CHF and the CAD towed in higher by notable USD supply.
But the USD/JPY pair traded modestly flat below 113.00, divided between broad-based US dollar weakness and risk-on trades. The Kiwi was the strongest, followed by the Aussie that found a fresh trigger from Australia’s bumper trade figures and slightly upbeat China Caixin manufacturing PMI. Meanwhile, the pound jumped nearly 80-pips on the FT report that the UK PM May struck a Brexit deal with the EU on financial services.
Despite a better risk environment, both crude benchmarks traded on the front foot, as escalating US-China trade woes and global growth concerns weigh. Gold prices on Comex re-attempted the $ 1220 barrier, helped by muted Treasury yields and the weaker greenback.
Main Topics in Asia
Australian Trade Balance surges to record $3.017 billion on falling Imports
PM May strikes Brexit deal with the EU on Financial Services – FT
China signals further stimulus as manufacturing suffers – Bloomberg
China Caixin Manufacturing PMI stagnates at 50.1 in October, but beats estimates
Moody’s: China’s plan to cut personal taxes is credit negative
UK BrexitMin Raab sees Brexit deal by November 21st
Asian stocks are flashing green on China stimulus talks
China Vice FinMin: China is planning tax cuts to boost consumption – Reuters
GBP/USD: Put value drops sharply on Brexit optimism
Key Focus Ahead
There is no relevant macro news from the Euroland today, with the French, Spanish and Italian markets closed on a National holiday. However, the EUR, GBP traders will remain busy, as the UK docket remains full, with the UK manufacturing PMI report on the cards, followed by the BOE”s Super Thursday events.
The BOE will announce its monetary policy decision at 1200 GMT that will be accompanied by the Quarterly Inflation Report (QIR) and the minutes of the MPC meeting. The BOE is widely expected to keep the interest rates on hold amid looming Brexit uncertainty while the bank’s outlook on the inflation and rate hikes could stir some moves in the pound.
Moving on, BOE Governor Carney’s speech will be also closely eyed at 1230 GMT alongside the releases of the US weekly jobless claims. Meanwhile, the US ISM manufacturing PMI and Canadian Markit PMI reports will hog the limelight among other minority reports in the NA session.
EUR/USD: Bearish monthly close, but China stimulus talk could shake out weak bears
Despite bearish expectations, the pair may shake out weak bears by revisiting the 50-month SMA of 1.1370 today, as the European and the US equities are likely to cheer China stimulus talks.
GBP/USD’s launch into 1.2850 may be premature with BoE in the barrel
The GBP/USD is trading into the 1.2850 level after a hectic Asia session saw the Pound take a firm step higher after news broke that the EU and UK struck a Brexit deal on financial services, but the Bank of England’s (BoE) rate call could keep the Cable under wraps.
Dollar Rally Nearing An End? Plus our BoE Outlook
It’s time to turn your focus to the British pound because tomorrow, the Bank of England will release its Quarterly Inflation Report in conjunction with a monetary policy announcement.
Indian Rupee to see little reprieve over the coming year – Reuters poll
The results of the latest Reuters poll of 40 foreign exchange strategists showed that the Indian Rupee is likely to see little respite over the coming year, in the wake of escalating US-Sino trade tensions and rising domestic political uncertainty.
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