Asian FX Outlook: Wait-and-see ahead of Fed's policy meeting

Ivan Delgado Independent Analyst

Main topics for Tuesday

Quiet day in the Forex market ahead of the much anticipated Federal Reserve monetary policy meeting.

Bitcoin breaks above 17k on the inauguration day of futures trading on the CBOE exchange. The largest CME exchange is due to launch Bitcoin futures on Dec 18th.

The US Dollar is heading into Tuesday's trading quite neutral, following a relatively flat US JOLTs job openings for October.

Australia's business conditions/confidence, coupled with Q3 home price index, are the only standout events in Asia.

UK inflation figures, including core CPIs, production price, and retail price indexes. Overall, the data is expected to keep pressing higher.

German ZEW economic sentiment, a leading indicator of economic health, which potentially provides clues on the future economic activity in Germany, will likely have an impact on the Euro.

A look at Forex majors

EUR/USD failed to find acceptance above the 1.18 level, with the constant decline in German vs US 10y yield spreads partly to blame.The close near the daily lows is discouraging for buyers.

GBP/USD continues to correct lower following the deal over a Brexit divorce bill between the European Union and the UK. Support at 1.34 is the next critical battlefield, with UK inflation numbers to determine the next bias.

USD/JPY climbed for a third day in a row, with Monday's price action reflecting the loss of interest ahead of the Federal Reserva policy meeting. The appreciation of the rate is occurring in decreasing volume, not the ideal context for further extensions.

AUD/USD found some profit-taking ahead of the 0.75 key level, allowing for a minor rebound towards the 0.7530. A small hiccup in vola might be seen in today's Asian session ahead of the Fed meeting.

What happened?

US Nov employment trends came at 135.9 vs 135.6 prev (revised to 136.2)

US Oct jolts job openings came at 5.996 mln vs 6.090 mln exp and 6.093 mln prev (revised to 6.177 mln)

Explosion reported in New York commuter hub, with a suspect currently held in custody.

UK's PM MAY has increased her optimism over Brexit talks following last week's deal.

US Treasury predicts an extra $1.8 trillion revenue from tax cuts.

Events coming up

GMT	Event	Actual	Consensus	Previous
Monday, Dec 11
02:00	CNY M2 Money Supply (YoY)	9.1%	8.9%	8.8%
06:00	JPY Machine Tool Orders (YoY)	46.9%		49.8% Revised from 49.9%
07:00	TRY Current Account Balance	$-3.827B	$-4.100B	$-4.527B
07:00	TRY Quarterly Gross Domestic Product	11.1%	10.0%	5.1%
07:00	DKK Current Account	14.8B		17.1B Revised from 16.3B
07:00	DKK Trade Balance	6.6B		7.8B
07:00	DKK Inflation (HICP) (YoY)	1.3%	1.5%	1.4%
07:00	DKK Consumer Price Index (YoY)	1.3%	1.5%	1.5%
07:00	RON Trade Balance	€-1.320B		€-1.019B
07:00	NOK Producer Price Index (YoY)	9.7%		9.0%
07:00	NOK Consumer Price Index (MoM)	0.1%	0.2%	0.1%
07:00	NOK Core Inflation (YoY)	1.0%	1.2%	1.1%
07:00	NOK Core Inflation (MoM)	-0.3%	0.0%	0.3%
07:00	NOK Consumer Price Index (YoY)	1.1%	1.2%	1.2%
08:00	EUR Trade Balance	€-267.1M		€-719.9M
08:00	CZK Consumer Price Index (YoY)	2.6%	2.6%	2.9%
08:00	CZK Consumer Price Index (MoM)	0.1%	0.1%	0.5%
09:00	EUR Retail Sales n.s.a (YoY)	-2.1%		3.1% Revised from 3.4%
09:00	EUR Retail Sales s.a. (MoM)	-1.0%	-0.1%	0.8% Revised from 0.9%
n/a	EUR Industrial Production (YoY)	0.5%		3.2% Revised from 2.4%
n/a	EUR Global Trade Balance	€-4.056B		€-3.543B
13:00	PLN Consumer Price Index (YoY)	2.5%		2.5%
13:00	PLN Consumer Price Index (MoM)	0.5%		0.5%
15:00	USD JOLTS Job Openings	5.996M	6.090M	6.093M
16:30	USD 6-Month Bill Auction	1.46%		1.45%
16:30	USD 3-Month Bill Auction	1.32%		1.29%
18:00	USD 10-Year Note Auction	2.384%		2.314%
18:00	USD 3-Year Note Auction	1.932%		1.750%
21:00	KRW Import Price Growth (YoY)	3.9%		6.8%
21:00	KRW Export Price Growth (YoY)	2.3%		8.1% Revised from 8.0%
23:50	JPY Domestic Corporate Goods Price Index (YoY)		3.3%	3.4%
23:50	JPY Domestic Corporate Goods Price Index (MoM)		0.2%	0.3%
Tuesday, Dec 12
24h	MXN Day of the Virgin of Guadalupe
n/a	AUD HIA New Home Sales (MoM)			-6.1%
00:30	AUD Mid-Year Economic and Fiscal Outlook
00:30	AUD House Price Index (QoQ)		0.5%	1.9%
00:30	AUD House Price Index (YoY)			10.2%
00:30	AUD National Australia Bank's Business Confidence			8
00:30	AUD National Australia Bank's Business Conditions			21
02:00	CNY FDI - Foreign Direct Investment (YTD) (YoY)			1.9%
04:30	JPY Tertiary Industry Index (MoM)			-0.2%
05:00	SGD Retail Sales (MoM)			-4.2%
05:00	SGD Retail Sales (YoY)			-0.5%
06:30	EUR Nonfarm Payrolls (QoQ)			0.2%
07:00	RON Consumer Price Index			2.6%
08:00	EUR Industrial Output (YoY)			2.3%
08:30	SEK Consumer Price Index (MoM)			-0.1%
08:30	SEK Consumer Price Index (YoY)			1.7%
09:30	GBP Retail Price Index (YoY)		4%	4%
09:30	GBP Retail Price Index (MoM)		0.3%	0.1%
09:30	GBP DCLG House Price Index (YoY)			5.4%
09:30	GBP Producer Price Index - Output (MoM) n.s.a		0.3%	0.2%
09:30	GBP Producer Price Index - Output (YoY) n.s.a			2.8%
09:30	GBP PPI Core Output (MoM) n.s.a		0.2%	0.1%
09:30	GBP Producer Price Index - Input (YoY) n.s.a		6.8%	4.6%
09:30	GBP PPI Core Output (YoY) n.s.a		2.2%	2.1%
09:30	GBP Producer Price Index - Input (MoM) n.s.a		1.6%	1.0%
09:30	GBP Core Consumer Price Index (YoY)		2.7%	2.7%
09:30	GBP Consumer Price Index (YoY)		3%	3%
09:30	GBP Consumer Price Index (MoM)		0.2%	0.1%

Author

Ivan Delgado

Independent Analyst

Established in the Asian continent since 2009, Ivan studied a degree in Business at the University Pompeu Fabra (Barcelona), while also earning a postgraduate degree in Business Administration.

EUR/USD trims gains, back below 1.1800

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GBP/USD off highs, recedes to the sub-1.3500 area

Following earlier highs north of 1.3500 the figure, GBP/USD now faces some renewed downside pressure, revisiting the 1.3490 zone as the US Dollar manages to regain some upside impulse in the latter part of the NA session on Friday.

Gold climbs to weekly tops, approaches $5,100/oz

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