Comment: Predicting the following move a forex pair will make is the basis of trading foreign exchange. However if it was painless everybody could be making money and because the number of successful traders is about merely five percent plainly just about all investors should review the approach through which they make their trading selections.Although many investors pour looking at forex charts in some cases for several hours on end this in reality might be constraining as it excludes both the fundamental and general opinion judgment from the investing equation. Understanding what prosperous traders believe and Forex – Indonesia Flows: USD/IDR gapped lower at open report under gives a experienced look at market trends.

Forex – Asia Open – Overnight Highlights

 23:53 (GMT) 11 Apr

 [Forex Highlights]

Asia Overnight Highlights – 12 April 2018

Jiaxin Lu, Ken Loong Hoe

ASIA OUTLOOK

Equities received a scare from Trump taunting Russia over a potential strike in Syria, overshadowing a subdued but not very surprising CPI. The USD was a little weaker before correcting on generally upbeat FOMC minutes. Gains in oil supported the CAD.

Majors FX Highlights

Wednesday was a risk-off day with markets shaken as President Trump taunted Russia over potential US missile attacks on Syria. In early Asian session, EUR/USD trades around 1.237. Cable hovering a shade above 1.4180. USD/JPY price action bounded by 106.80/85. AUD/USD off to good start to Thursday, rises to 0.7762, above Wednesday’s opening level. NZD/USD recovered from an early dip to 0.7349 but pauses at 0.7362. USD/CAD slipping slightly but still modestly above 1.2570. USD/CHF flat at 0.9576.

Majors Data Highlights

There were no major shocks in the Mar CPI, the headline rounding to -0.1% (0.0629% before rounding) due to gasoline falling by a little more than expected. The core rate at 0.2% was as expected and 0.1756% before rounding, similar to Feb but a little slower than Jan and Dec.
In the FOMC minutes, a generally upbeat tone is balanced by some prominence given to a strong majority seeing the prospect of retaliatory trade measures as a downside risk. There was agreement that the economic outlook had strengthened and more confidence of inflation returning to target. Tightening is seen remaining gradual, though that is consistent with either 3 or 4 moves this year, something the dots show a fairly close split between.
On Thursday, US March import prices, where some recent acceleration merits attention, and weekly initial claims, which should slip back from last week’s bounce. A very light Eurozone calendar has only second tier releases due, Industrial Production. Speeches from ECB Coeure and Weidmann will be watched closely. BoJ Governor Kuroda will speak at a branch managers’ meeting.

Emerging Asia FX Highlights

USD/Asians saw mixed trends overnight on Wednesday. USD/CNY: 1Y NDFs edged down and saw minor attempts to dip below 6.3600 overnight, but was last seen at 6.3655. USD/SGD: the pair touched a fresh 2-week low of 1.3071 overnight before paring some losses to 1.3089 at last sight. USD/IDR: 1M NDFs inched up overnight, and finally settled at around 13790. USD/INR: 1M NDFs moved swiftly up and attained a 3-week high of 65.52 overnight, and settled at around 65.40 at last check.

Emerging Asia Data Highlights

Philippines released its February trade data on Wednesday. Import growth remains consistently strong in February, rising by 18.6% y/y. Exports posted its first decline in 15 months, falling by 1.8% y/y in February as dragged by a slowdown in agro-based products, minerals and petroleum products. This translated to a deficit of USD 3065 mn in February. The weaker than expected trade data came amid a US-China trade spat, casting a shadow over Philippines trade outlook. Inflation in China rose at a lower than expected 2.1% y/y in March, from 2.9% a month ago. This was helped by tapered price pressures post-LNY. PPI eased to 3.1% y/y from 3.7% prior, a bit below expectations but remaining supportive. We expect modest inflation in China this year, with some downside risk to our 2.5% forecast. Malaysia industrial production rose by 3.0% y/y in February, meanwhile, January number was revised up to 5.4% y/y from 3.0% y/y previously.

South Korea will be announcing its 7-Day Repo Rate on Thursday, no change is expected. Singapore retail sales data for February will also be due, likely to rebound by 10.0 %y/y. Also on the same day, India CPI for March will be out, which is likely to edge down to 4.10 %y/y from 4.44% y/y in February. India industrial production is also likely to see some softening to 7.0% y/y in February.

OVERNIGHT NEWS HIGHLIGHTS

– US Mar CPI -0.1% vs 0.0% exp, ex food and energy +0.2% as exp.

– Fed minutes – all agreed economic outlook had strengthened, many more confident inflation would rise to target, strong majority saw prospect of retaliatory trade actions as a downside risk.

– US Mar budget deficit $208.7bn vs $186.0bn exp.

– VIX index: 20.24 (-1.12%)

– Gold Spot: $1,352.29/oz (-0.08%)

– ICE Brent front contract: $72.06 (+$1.02)

– Nymex WTI front contract: $66.86 (+$0.04)

– Reuters/Jefferies Commodities Index: 198.83 (+0.87%)

– 10y UST: 2.781% (-2bp) (Asia morning)

– DJI: 24,189.45 (-0.90%); S&P: 2,642.19 (-0.55%); Nasdaq: 7,069.03 (-0.36%)

ASIA NEWS

China: Head of China’s State Company Watchdog Says More Mergers to Come. – BBG

China: China Aiming for a Stock-Trading Link With London This Year. – BBG

India: India Seeks Exemption from U.S. Tariffs on Metal Exports. – BBG

CURRENCIES

The focus saw a switch away from possible trade wars to something potentially more military as the reaction to the alleged chemical weapons attack in Syria was conducted across social media and the newswires with President Trump saying that Russia would be unable to intercept any US missile attacks on Syrian bases. The data focus was on US CPI which saw the headline at -0.1% m/m come in below expectation, but while EUR/USD did get up to 1.2395 it still could not break 1.2400, dipping to a low of 1.2345 after a mostly positive set of FOMC minutes, trade risks excepted.

USD/JPY spent most of the day close to 107.00 before drifting to session lows around 106.50 as equites came under pressure, FOMC minutes giving only a marginal lift.

GBP started brightly, took a modest hit on disappointing IndProd numbers but overall closed with EUR/GBP close to opening levels, still unable to make any progress below .8700. Cable tried a couple of runs higher, 1.4220/25 holding the top on both occasions.

The commodity currencies saw a run higher, CAD again leading the way as USD/CAD took out Fib support at 1.2582 AUD and NZD ran up at a slightly slower pace, AUD/USD facing technical resistance still some way ahead at .7785, while AUD/NZD looks relatively settled between 1.0500/1.0550.

EUR/NOK has been slowly taking back Tuesday’s CPI inspired gains, EUR/SEK heading back up again to threaten a return to 10.30 ahead of Swedish CPI on Thursday.

BONDS

The US curve continued to flatten after Trump’s missile tweet, albeit outright yield declines checked as the equity dip trimmed and heading into the Minutes. Later, the market managed to re-cheapen further into the 10yr sale as equities levelled allowing average results though still a low indirect bid. FOMC minutes with a mainly slight hawkish skew failed to have much impact though did leave short end yields around the week’s highs. 2s +0.0bps @ 2.31%, 5s -0.8bps @ 2.62%, 10s -1.7bps @ 2.78%, 30s -2.2bps @ 3.00%.

Agency Spreads: Freddie/Fannie 5s +1.5/+0.9 bps, 10s +0.3/-0.2 bps.

Swap Spreads: 2s +0.63bps, 5s +0.94bps, 10s +0.67bps.

EQUITIES

Futures, already weaker, took a hit ahead of the open as a Trump tweet taunted Russia that a military strike on Syria was likely. Buyers emerged at the open led by energy but gains failed to hold. FOMC minutes saw little response.

ASIA CURRENCIES

USD/CNY: 1Y NDFs edged down and saw minor attempts to dip below 6.3600 overnight, but was last seen at 6.3655. PBoC fixed mid-point at 6.2911 vs. previous close of 6.2810.The onshore spot extended its slide to an over 1-week low of 6.2690.

USD/CNH: the currency pair slipped below the 6.2700 handle overnight to a 1-week low of 6.2615 as PBoC Yi pledged to further open up the financial market, while trimmed some losses to 6.2734 at last look. Break of support at 6.2740 see the downmove is targeting at lower support at 6.2633.
USD/SGD: the pair touched a fresh 2-week low of 1.3071 overnight before paring some losses to 1.3089 at last sight. Focus stays on the downside, eyes on downside support at 1.3054.

USD/IDR: 1M NDFs inched up overnight, and finally settled at around 13790. USD/IDR onshore spot opened lower at 13743 on Wednesday from previous close of 13748. The pair traded with a modest upside bias overall on Wednesday, climbing up to 13757 at close. For USD/IDR, sustained weakness below 13735 is likely to accelerate slide towards the 13700.

USD/INR: 1M NDFs moved swiftly up and attained a 3-week high of 65.52 overnight, and settled at around 65.40 at last check. The onshore spot opened firmer at 64.9950 on Wednesday vs. last close of 64.9850. The pair traded with a bullish bias to an over 1-month high of 65.3100 on Wednesday. The break of 65.1750 resistance will signal further potential to the next resistance at 65.3150.

DATA RELEASES DUE TODAY

– n/a GMT – KR: BOK 7-Day Repo Rate(Apr) [Mkt: 1.50, Prev: 1.50]

– 01:30 GMT – AU: Housing Finance (Feb) [Prev: 1.1]

– 01:30 GMT – AU: Lending Finance (Feb) [Mkt: -0.4, Prev: -1.1]

– 05:00 GMT – SG: Retail Sales (Feb) 4cast:0.8 % y/y [Mkt: 4.9, Prev: -8.4]

– 05:00 GMT – SG: Retail Sales (sa) (Feb) [Mkt: 4.2, Prev: -5.4]

– 09:00 GMT – EU: Industrial production (Feb) [Mkt: 3.5, Prev: 2.7]

– 12:00 GMT – IN: CPI (Mar) [Mkt: 4.25, Prev: 4.44]

– 12:00 GMT – IN: Industrial Production (Feb) [Mkt: 6.9, Prev: 7.5]

– 12:30 GMT – US: Import Price Index (Mar) [Mkt: 0.1, Prev: 0.4]

– 12:30 GMT – US: Initial Claims (43197) [Mkt: 230, Prev: 242]

– 13:30 GMT – CA: House Price Index (Feb) [Prev: 0]

– 23:50 GMT – JP: M2 Money Supply (Mar) [Mkt: 3.2, Prev: 3.3]

EVENTS & AUCTIONS

– UK: BoE’s Carney Speaks in Toronto

– 00:30 GMT – JP: BoJ’s Kuroda Speaks at Regional Branch Managers Meeting

– 00:45 GMT – CN: PBOC’s Yi and IMF’s Lagarde Opening Remarks at Belt-Road Forum

– 03:00 GMT – CN: PBOC’s Gongsheng Speaks at Belt-Road Forum

– 04:35 GMT – JP: 3mth Bills Auction

– 04:45 GMT – JP: 30yr Bond Auction

– 06:15 GMT – CN: China’s Vice Finance Minister Guangyao Speaks at Belt-Road Forum

– 06:30 GMT – UK: BoE’s Broadbent Speaks in Sydney

– 11:30 GMT – EU: ECB Meeting Minutes

– 12:15 GMT – EU: ECB’s Coeure Speaks in Paris

– 16:00 GMT – EU: ECB’s Constancio Speaks in Brussels

– 16:00 GMT – EU: ECB’s Weidmann Speaks in Berlin, Germany

– 17:00 GMT – US: Fed’s Kaplan Speaks in Odessa, Texas

– 18:00 GMT – US: 30yr Bonds Reopening (USD 13bn)

– 21:00 GMT – US: Fed’s Kashkari Speaks in Minneapolis

[Read More …]