Forex Today: Aussie sell-off stalls post-mixed Aus CPI, German IFO on tap
|A quiet Asian affair, with the King US dollar in a consolidative mode, after having surpassed the 91 handle versus its main competitors. As a result, most majors breathed a sigh of relief after yesterday’s broad sell-off, with the Aussie supported just below the 0.75 handle on the back of upbeat Australian trimmed mean CPI readings. However, the Kiwi failed to benefit from a pause in the USD rally and extended sell-off towards the 0.7100 mark while 10-year Treasury yields remain on track to claim the 3 percent figure.
Among other related markets, a broad-based recovery is also seen across the commodities, with gold prices headed to $ 1330 levels. Brent oil clocked fresh 3.5 year highs above $ 75 mark while the Asian equities traded higher, led by the rally in the Chinese stocks.
Main topics in Asia
N. Korea's Kim Jong Un would be open to nuclear inspections - Korea media
Korean newsgroup Dong A Ilbo is reporting that North Korea's Kim Jong Un announced that he's willing to undergo inspections by international nuclear inspectors, as well as reaffirming his dedication to de-nuclearize North Korea.
RBA's Kent: fallout from interest-only loan expiries to be limited
The Reserve Bank of Australia's Assistant Christopher Kent gave some talking points about the interest-only loan lending practices in Australia, which the Australian regulator Australian Prudential Regulation Authority (ARPA) restricted to protect household debt levels.
RBA’s Kent: Next move in interest rates likely to be up, but no hurry
More comments crossed the wires from the Reserve Bank of Australia (RBA) Assistant Governor (Financial Markets) Christopher Kent, as he responded to the Q&A session following his earlier speech.
Australia's Q1 CPI disappoints, keeps rate hikes off table
Following the below expectations Australia's Q4 2017 CPI readings, today's inflation figures for the Q1 showed a mixed picture, with the headline figures missing expectations.
Dollar Index hit 3-month high above 91.00
The dollar index, which tracks the value of the greenback, against the basket of the currencies, rose to 91.08 in Asia - the highest level since January 12, as the 10-year treasury yield remains on the hunt for a big break above the 3 percent mark.
Brent oil hits highest since November 2014
Oil rose to fresh 3.5 year highs in the Asian session on expectations of fresh US sanctions against Iran and as the demand side of the oil market continues to strengthen, courtesy of OPEC output cut deal.
Key Focus ahead
Today’s EU macro calendar is expected to be relatively busier, with the Swiss trade figures due ahead of the European open. The German IFO business climate surveys, UK public sector net borrowings and CBI industrial order expectations will keep the EUR, GBP traders busy in the European session.
In the NA session, the US CB consumer confidence data will make up for the main event risk among other minority reports, including the new home sales. Meanwhile, the US American Petroleum Institute’s (API) weekly crude inventories report will be closely eyed for fresh oil and CAD trades.
EUR/USD: Bears gain strength ahead of German IFO release
The EUR/USD pair fell to 1.2184 in Asia - the lowest level since March 1 and could see a downside break of the 1.2150-1.2550 trading range soon. The downside break may happen today if the German IFO readings (due at 08:00 GMT) miss estimates.
GBP/USD drifting towards 1.39, struggling to find buyers
Tuesday is a slim offering for the GBP, with Public Sector Net Borrowing at 10:00 GMT, which is expected to swing up to 900 million (in GBP terms), after a 272 million GBP decline last month. For the US-side there's real estate figures, with the Housing Price Index at 13:00 GMT, forecast to fall to 0.5 percent from 0.8 in the previous month.
USD/CAD risk reversals adopt a bullish bias
The risk reversals turned positive on April 21, signaling the implied volatility premium for CAD puts is higher than the implied volatility for CAD calls. The data indicates CAD bearish bets are in demand and add credence to the recent rally in USD/CAD from 1.2527 to 1.2861.
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