Asia Wrap : Just currency views on THB, HKD and AUD

Stephen Innes SPI Asset Management

HKD funding continued to tighten ahead of the big upcoming IPO, which is reported to be oversubscribed and continues to clog the cash markets. Tom/next traded up to 12 today forcing the short date curve out. And while this feels completely overdone, it's having a positive effect on the HKD which is trading stronger HIBOR lifts vs the FOMC turning dovish.

THB remains rangebound despite Bank of Thailand saying they see Q2 GDP growth at less than 3% y/y, and they stay open to rate cuts as the economy faces downside risk and that they are worried about baht strength It looks like a bright dollar buy signal, but traders are concerned about strong inflows

Australia retail sales were a tad weaker, but AUDUSD continued to head higher. AUDUSD remains in positive territory this week despite dovish RBA inclination, but the markets are short and getting no joy so with strong equity market performance even more so if we see Gold pushing higher again as the historically tight AUD-Gold correlation could see a push towards the 200-day moving average at 0.7098 as short positions cover.

Author

Stephen Innes

SPI Asset Management

With more than 25 years of experience, Stephen has a deep-seated knowledge of G10 and Asian currency markets as well as precious metal and oil markets.

EUR/USD flat lines below 1.1900; divergent Fed-ECB expectations offer support

The EUR/USD pair struggles to capitalize on the overnight bounce from the 1.1835-1.1830 region and oscillates in a narrow band during the Asian session on Thursday. Spot prices currently trade around the 1.1875 area, remaining nearly unchanged for the day and staying within striking distance of an over one-week high, reached on Tuesday, amid mixed cues.

GBP/USD slips heading into the Thursday trading window

The Pound Sterling pulled back from four-year highs on Wednesday, weighed down by a combination of Bank of England dovishness and UK political uncertainty, even as the US Dollar weakened on soft labor market revisions.

Gold posts modest gains above $5,050 as US-Iran tensions persist despite strong labor data

Gold price trades in positive territory near $5,060 during the early Asian session on Thursday. The precious metal edges higher despite stronger-than-expected US employment data. The release of the US Consumer Price Index inflation report will take center stage later on Friday.

Bitcoin holds steady despite strong US labour market

Bitcoin briefly bounced from $66,000 to above $68,000 but slightly reversed those gains following Wednesday's US January jobs report. The top crypto is hovering around $67,000, down 2% over the past 24 hours as of writing on Wednesday.

The market trades the path not the past

The payroll number did not just beat. It reset the tone. 130,000 vs. 65,000 expected, with a 35,000 whisper. 79 of 80 economists leaning the wrong way. Unemployment and underemployment are edging lower. For all the statistical fog around birth-death adjustments and seasonal quirks, the core message was unmistakable. The labour market is not cracking.

XRP sell-off deepens amid weak retail interest, risk-off sentiment

Ripple (XRP) is edging lower around $1.36 at the time of writing on Wednesday, weighed down by low retail interest and macroeconomic uncertainty, which is accelerating risk-off sentiment.