Asian FX Outlook: Sterling flies as Brexit deal nears, US NFP next big focus

Main topics

The Sterling is higher across the board following reports of an Irish deal as part of the Brexit negotiations. 

UK PM May is finalizing details for a Brexit deal, according to the UK Telegraph. She is planned to travel to Brussels on Friday to sign the deal. 

EU's Tusk is due to make a Brexit statement early on Friday. The headlines are likely to inject volatility in the Sterling. 

Bitcoin remains on a rampage, breaking above the $15,000, with some exchanges trading at premiums as high as $20,000.

US NFP is the next big focus, with the wage component expected to see firm figures. 

Worth keeping an eye on North Korea, as the last headlines indicate a ramp-up of the rhetoric, saying the US threats make war unavoidable. 

China's trade balance during the Asian session, coupled with UK manufacturing production PMI are immediate data releases set to move the AUD and GBP respectively. 


A look at FX majors

EUR/USD kept pushing lower, despite the decreasing volume from the last 3 days indicates USD strength with no substance behind/by default. The next directional bias will be subject to the results of the US NFP figures.  

GBP/USD saw a bullish outside day, with a close just below 1.35. The price action communicates that long-side business is in full control. The pair will remain volatile on a Brexit headline-by-headline basis as well as on the release of the US NFP. 

USD/JPY longs went on a stampede of buying frenzy to burst through the 50% fib retrac from the Nov decline as risk appetite returns. The close above 11300 is technically bullish, subject to the US NFP data ahead. 

AUD/USD sellers continue in full control, with Thursday's close suggesting the risk is skewed towards further losses. The key support at 0.75 is holding up ahead of the US NFP. 


What happened?

US w/e Initial Jobless Claims came at 236k vs 240k exp and 238k prev, with the 4-week average at 241.50k vs 242.25k prev.

Meanwhile, the w/e Continued Jobless Claims saw a print of 1.908 mln vs 1.908 mln exp and 1.957 mln prev  (revised to1.960 mln). 

Trump and Democrats face off over potential U.S. government shutdown. 

 Germany’s Social Democrats (SPD) on Thursday backed holding talks with Chancellor Angela Merkel, which raises the probabilities of a new coalition government.

Canada's Oct Building Permits MoM came at 3.5% vs 1.5% exp and 3.8% prev (revised to 4.9%).

Canada's Nov Ivey PMI came at 62.4 vs 63.5 prev, while the seasonally adjusted reading stood at 63.0 vs 63.8 prev.


Upcoming events

GMT
Event
Vol.
Actual
Consensus
Previous
Thursday, Dec 07
09:00
279.6B
 
276.0B
10:00
20.5%
 
20.7% Revised from 20.6%
10:00
-220.8B
 
-181.9B
10:00
0.6%
0.6%
0.6%
10:00
2.6%
2.5%
2.5%
n/a
0.36%
 
0.76%
n/a
1.81%
 
1.87%
n/a
0.290%
 
0.363%
n/a
1.410%
 
1.536%
11:30
$512M
$670M
$583M
12:00
-0.1%
 
0.5%
12:00
0.1%
 
0.6%
12:30
35.038K
 
29.831K
13:00
€95.8B
 
€95.0B
13:00
$430.6B
 
$430.2B
13:30
 
 
13:30
236K
240K
238K
13:30
1.908M
1.908M
1.960M Revised from 1.957M
13:30
3.5%
1.5%
3.8%
14:00
6.63%
6.60%
6.37%
14:00
1.03%
1.01%
0.63%
14:00
0.34%
0.32%
0.25%
14:30
5.65B
 
-4.50B
15:00
62.4
 
63.5
15:00
63.0
62.7
63.8
15:30
2B
-7B
-33B
16:00
 
 
17:00
7.0%
7.0%
7.5%
20:00
$20.52B
$17.50B
$19.21B Revised from $20.83B
21:45
0.3%
 
1.0%
23:50
 
2.8%
2.8%
23:50
 
0.4%
0.3%
23:50
 
0.1%
0.1%
23:50
 
1.5%
1.4%
23:50
 
¥418.1B
¥852.2B
23:50
 
¥1,720.5B
¥2,271.2B
Friday, Dec 08
24h
 
 
24h
 
 
24h
 
 
24h
 
 
24h
 
 
24h
 
 
24h
 
 
00:00
 
0.8%
0.9%
n/a
 
 
-6.1%
00:01
 
 
104.8
00:30
 
 
-6.2%
00:30
 
-2.5%
-2.3%
02:00
 
 
6.1%
02:00
 
 
15.9%
02:00
 
$35.0B
$38.2B Revised from $38.2B
02:00
 
5.0%
6.9%
02:00
 
11.3%
17.2%
02:00
 
231.0B
254.5B
n/a
 
¥3.120T
¥3.109T
05:00
 
 
54.9
05:00
 
52.1
52.2
05:30
 
 
1.4%
06:00
 
 
4.7%
07:00
 
€21.8B
€21.8B
07:00
 
1.0%
-0.4%
07:00
 
 
€25.4B
07:00
 
1.1%
-1.0%
07:00
 
 
10.4%
07:00
 
 
€-0.21B
07:00
 
 
2.7%
07:00
 
 
€937M
07:00
 
 
2.2%
n/a
 
 
3.6%
07:00
 
 
€450M
07:45
 
-0.1%
0.6%
07:45
 
 
€-76.3B
09:00
 
4%
4%
n/a
 
 
-1.1%
n/a
 
 
3.4%
09:30
 
0.1%
0.7%
09:30
 
0.0%
0.7%
09:30
 
3.5%
2.5%
09:30
 
3.9%
2.7%
09:30
 
 
£-2.75B
09:30
 
£-11.45B
£-11.25B
09:30
 
£-3.30B
£-2.98B
10:00
 
 
0.5%
10:00
 
 
0.7%
11:30
 
 
8.6%
11:30
 
 
$400.74B
13:00
 
 
0.5%
13:15
 
215.0K
222.8K
13:30
 
0.3%
0.0%
13:30
 
 
62.7%


 

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