Amid a lack of first-tier macro updates from the Asia-pac economies, forex today in Thursday’s Asian session tracked the broader market sentiment and USD dynamics, as the dust settled over the FOMC aftermath. The US dollar pulled back from post-FOMC highs across its main competitors, providing a sigh of relief to most majors.
The Aussie attempted a bounce to the 0.7030 barrier while the Kiwi also tested 0.6640 levels, but remained within narrow trading ranges amid risk-on action in the Asian equities and weaker commodities prices. Both crude benchmarks traded on the back foot amid swelling US crude inventories while gold prices dropped towards 1270 region. Meanwhile, the USD/JPY pair witnessed good two-way businesses, initially having dipped to 111.35 lows before refreshing post-FOMC highs at 111.70. However, subdued Treasury yields and a pause in broad USD buying dragged the pair back to 111.50 levels.
Among the European currencies, the EUR/USD pair regained the 1.12 handle while the Cable kept its range around 1.3050 level ahead of the key event risk for today – the Bank of England (BOE) Super Thursday.
Main Topics in Asia
BOC’s Poloz: interest rates are at “very low” levels, USD/CAD unfazed
PM May is preparing to keep EU custom rules – Times
WTI: Bulls and bears jostle around $63.50
Japan’s Abe: Open to talks with North Korean leader Kim Jong-Un
Global funds turn cautious, boost bond holdings to highest since Aug 2017 – Reuters
S. Korean FinMin Dong-yeon: US Pres. Trump and N. Korea’s Kim are willing to hold a third summit
Australia’s five-year inflation rate has hit the weakest since 1963 – Business Insider
Asian stocks trade mixed after Fed remarks, Yen loses ground
Indonesia’s CPI rebounds to 2.83% y/y in April, beats estimates
US Pres. Trump: “I am continuing to monitor the situation in Venezuela very closely”
Key Focus Ahead
Markets gear up for a busy EUR calendar today, kicking-off with the German retail sales data due at 0600 GMT, immediately followed by the Swiss retail trade report at 0630 GMT. From 0715 GMT, a flurry of final manufacturing PMI reports will start trickling in from the Euro area economies, with the key German and Eurozone PMI data dropping in at 0755 GMT and 0800GMT respectively.
From the UK docket, the UK construction sector activity report will be published at 0830 GMT ahead of the much-awaited Bank of England’s (BOE) Super Thursday. The BOE monetary policy decision will be announced at 1100 GMT accompanied by its meeting minutes and quarterly inflation report (QIR). At 1130 GMT, the BOE Chief Carney will be up on the rostrum, addressing the post-policy press conference, with all eyes on the economic projections in light of the Brexit extension amid mixed fundamentals.
In the NA session, the weekly jobless claims from the US will be reported at 1230 GMT alongside non-farm productivity and unit labor cost data. Meanwhile, the US factory orders data will be closely eyed at 1400 GMT after the ISM manufacturing PMI disappointed a day before.
Later in the American afternoon, the ECB Governing Council member and Buba Chief Jens Weidmann will speak at 1730 GMT. At the same time, the speech by the ECB outgoing Chief Economist Peter Praet is also scheduled.
EUR/USD: Rejected at descending trendline ahead of German retail sales data
EUR/USD is on the defensive ahead of the German retail sales data, having faced rejection at the key trendline hurdle. Post-retail sales, the market focus would shift to the German Markit MAnufacturing PMI (Apr), scheduled for release at 07:55 GMT.
GBP/USD: Recent recovery adds value to BOE “Super Thursday”
With the recent headlines suggesting sooner end to the Brexit deadlock, GBP/USD is on the bids around 1.3055 ahead of the London open on Thursday. All eyes on the BOE’s monetary policy committee (MPC) decision and press conference by the BoE’s Carney.
BOE Preview: Can Carney crash cable by cutting forecasts? Or is the Brextension bullish?
Does the BOE now see calmer conditions that would allow for a rate hike? Or does the ongoing darkness around the momentous event take any tightening off the table?
Gold Technical Analysis: There are prospects are for a run down to the 200-D EMA
Gold dropped out of the rising interim channel and the case is building up for a continuation of a southerly trajectory within the descending wedge. Bulls can target for a close below the 38.2% Fibo at 1275 and look to 1266.
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