Fx today witnessed an eventful Asian session thus Thursday, with the Kiwi having emerged the weakest while the Yen was the top gainer, despite the risk-on rally seen in the Asian equities, led by China stocks. The risk-sentiment improved after China’s CPI rebounded sharply and sent the Chinese equities over +2% while oil and copper prices also cheered upbeat China’s prices data.
However, the Antipodeans looked little impressed by the improved risk appetite, as the Aussie tracked the losses in its OZ neighbor, the NZD. The NZD/USD pair plunged to 2.5 years low after the Reserve Bank of New Zealand (RBNZ) unexpectedly came out with a dovish forward guidance, by committing to keep the rates at a record low through 2020. The Chinese currency extended its recovery momentum versus its American counterpart, underpinned the upbeat tone seen around the Yen. The Japanese currency also remained boosted ahead of trade talks between the US and Japan and speculation over when the BoJ will exit its ultra-easy monetary policy. Meanwhile, the EUR, GBP, CAD and CHF traded modestly flat amid political tensions.
Main topics in Asia
US sanctions Russia over nerve agent attack – Bloomberg
As reported by Bloomberg, the US government has imposed trade sanctions on Russia in response to the chemical nerve agent attack that took place in the UK in March.
RBNZ Press Conference: rate outlook “balanced”
The Reserve Bank of New Zealand’s (RBNZ) Governor, Adrian Orr, is speaking at a press conference following the central bank’s rate statement earlier.
More from RBNZ Gov Orr: low business confidence still a risk
The Reserve Bank of New Zealand’s Governor Adrian Orr is continuing to give statements during a press conference that follows earlier’s RBNZ rate statement which saw the New Zealand central bank push expectations of a future rate increase even further out.
China’s CPI rebounds to 0.3% m/m in July, beats estimates
According to the latest data published by China’s the National Bureau of Statistics (NBS), the Chinese Consumer Price Index (MoM) (July) came in at +0.3% vs +0.2% exp and -0.1% last, while Consumer Price Index (YoY) (July) 2.1% vs 1.9% exp and 1.9% last.
RBNZ Governor Orr: It makes sense for the RBNZ to watch and wait for now
Reuters reports fresh comments from the Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr delivered last minutes, as he appeared before New Zealand Parliament’s Finance and Expenditure Committee.
Saudi Arabia OilMin reassures Canada on oil supplies amid dispute – Reuters
Saudi Arabian Energy Minister Khalid al-Falih reassured in a statement on Thursday, the Kingdom’s oil supplies to Canada will not be impacted by the ongoing spat between the two countries, Reuters reports.
BoJ seen laying groundwork but still far from stimulus exit – Reuters poll
According to the latest Reuters poll of economists, a third of economists believe the Bank of Japan’s (BoJ) latest action to make its policy more flexible indicate it is preparing for an eventual exit from its ultra-loose monetary policy, although “¦
Asian stocks halt slide on positive China CPI, Nikkei 225 still back on Japan figures
Asian equities started Thursday’s trading off on the wrong foot with most indexes seeing declines in the early hours of trading on the back of rising trade tensions as the US and China prepare to hurl another volley of trade tariffs at each other “¦
Key Focus ahead
A data-light EUR calendar so far this week continues to disappoint the markets, leaving them at the mercy of the risk trends and US dollar trades amid escalating US-Sino trade tensions and Brexit uncertainty.
Today is no exception and hence, attention directly shifts towards the NA docket, with the Canadian housing starts data slated for release at 1215 GMT, followed by the US PPI and jobless claims data at 1230 GMT. The focus will also remain on the FOMC member Evan’s speech scheduled at 1330 GMT ahead of the US CPI report due tomorrow.
EUR/USD consolidates above 1.16, awaits fresh leads
The currency pair could continue to trade above 1.16 on lack of first tier data releases in the Eurozone and US. The absence of fresh news on Italy could keep the bond markets calm and the EUR better bid above 1.16.
GBP/USD continuing to sag as Friday’s UK GDP reading looms ahead
With Brexit on the front burner and Thursday’s calendar on the thin side, traders will be turning their eyes to Friday’s GDP figures for the UK, with the q/q GDP for 2018’s second quarter expected to improve from 0.2% to 0.4%.
Japan: Expect Q2 real GDP growth of 1.4% q-o-q annualized – Nomura
Analysts at Nomura offer a sneak peek into Friday’s Japanese Q2 GDP figures due to be reported at 2350 GMT.
US dollar rally to run out steam within the next six months – Reuters poll
The broad-based USD rally will run out of steam within the next months, according to a Reuters poll of foreign exchange strategists.
Share
