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Forex Today: Aussie downed by trade, growth concerns; Services PMIs in focus

Dhwani Mehta FXStreet

Fresh US-China concerns over the Xinjiang human rights bill added to the ongoing trade deal uncertainty in Wednesday’s Asian session, as Asian stocks followed the Wall Street lower. The risk tones remained broadly softer, as the safe-havens such as the yen and gold continued to find support.

Across the G10 currencies, the Aussie was the weakest and slipped towards 0.6800, having faced a double whammy from the trade gloom and poor Australian GDP induced increased RBA dovish expectations. The Kiwi also turned south to test the 0.65 handle, although the descent was slowed down by a big beat on the Chinese Caixin Services PMI. The Yen, on the other hand, traded on the front vs. the greenback, driving USD/JPY lower to mid-108s. However, the losses were limited by a rebound in the US Treasury yields and small gains in the US equity futures. Meanwhile, the resource-linked CAD traded better bid against its American rival, tracking the gains in oil prices.

Amongst the European currencies, both EUR/USD and GBP/USD corrected a part of the recent rally and now awaits fresh economic news for a fresh trading impetus.

Main Topics in Asia

S&P reaffirms India's stable outlook

US Commerce Sec. Ross: Trump administration has not ruled out imposing tariffs on imported autos

Iraq’s OilMin: Deeper cuts being preferred by members

US house intelligence committee approves president Trump impeachment report – RTRS

The US House has passed a bill demanding sanctions on senior Chinese officials - RTRS

Aussie GDP Q3 misses the mark

Chinese top diplomat Yang Jiechi: China and US must increase strategic communications – RTRS

Chinese Foreign Ministry: Urges US to stop wrongdoing re Xinjiang bill

Caixin Services PMI beats expectations, 53.5 vs 52.7 vs the prior 51.1

Sources: White House considered kicking Huawei out of US banking system - Reuters

Australian fund managers are preparing for RBA QE

China capex growth hits 3-year low as weak economy, trade war drag – Reuters study

Russia fulfills OPEC+ deal in November by 85% - TASS

Beijing US embassy spokesman: Will not speculate on possible future actions by China

Key Focus Ahead

It’s a hectic Wednesday schedule, in terms of the economic events lined up for release, with the Service PMI reports to dominate on both sides of Atlantic while the risk sentiment will continue to get influenced by the US-China trade and political developments. From 0815 GMT onwards, the Euro area Final Services PMI data will start trickling, with the German and Eurozone numbers more of relevance. The UK Services PMI due at 0930 GMT will grab some attention ahead of the US ADP Employment Change data at 1315 GMT and US Services PMI reports due around 1500 GMT.

The Bank of Canada (BOC) monetary policy decision will hog the limelight in the NA session at 1500 GMT, soon followed by EIA Crude Stock data and BOC Governor press conference at 1530 GMT and 1615 GMT respectively.

EUR/USD: Bulls need big miss on US data to force a breakout

EUR/USD remains below key resistance at 1.1097 amid renewed trade tensions. The focus is on the US ADP Employment report and ISM Non-Manufacturing data.

GBP/USD steadies around 1.3000 ahead of UK Services PMI

Following its run-up to the six-week top, GBP/USD hovers around 1.3000 heading into the London open.

US ADP Employment November Preview: For better or worse all roads lead to China

ADP private payrolls expected to climb in November. Revisions subtracted 70,000 from totals over the past six months. Weak business confidence the major negative factor.

US Services PMI November Preview: Manufacturing indicates lower

Services PMI forecast to dip marginally in November. Manufacturing PMI dropped unexpectedly last month after rising in October.

Bank of Canada Preview: Upbeat tone on investment may send C$ higher

The Bank of Canada is set to leave the interest rate unchanged in its last decision of 2019. Encouraging investment figures may result in an upbeat sentiment.

GMT	Event	Actual	Consensus	Previous
Tuesday, Dec 03
22:00	AUD Commonwealth Bank Composite PMI	49.7		49.5
Wednesday, Dec 04
00:00	NZD ANZ Commodity Price	4.3%	1.6%	1.2%
24h	EUR Eurogroup Meeting
00:30	HKD Nikkei Manufacturing PMI	38.5	40.2	39.3
00:30	JPY Jibun Bank Services PMI	50.3	50.4	49.7
00:30	AUD Gross Domestic Product (YoY)	1.7%	1.7%	1.4%
00:30	AUD Gross Domestic Product (QoQ)	0.4%	0.5%	0.6% Revised from 0.5%
01:01	EUR Purchasing Manager Index Services	53.7		50.6
01:45	CNY Caixin Services PMI	53.5	52.7	51.1
06:00	RUB Purchasing Manager Index Services			55.8
07:00	BRL Fipe's IPC Inflation		0.24%	0.16%
07:00	NOK Current Account			30.59B
08:15	EUR Markit Services PMI		51.9	52.7
08:30	SEK Current Account (QoQ)			37B
08:45	EUR Markit Services PMI		51.2	52.2
08:50	EUR Markit Services PMI		52.9	52.9
08:50	EUR Markit PMI Composite		52.7	52.7
08:55	EUR Markit PMI Composite		49.2	49.2
08:55	EUR Markit Services PMI		51.3	51.3
09:00	EUR Markit Services PMI		51.5	51.5
09:00	EUR Markit PMI Composite		50.3	50.3
n/a	ZAR Business Confidence Index			91.7
09:30	GBP Markit Services PMI		48.6	48.6
n/a	EUR 10-y Bond Auction			-0.29%
11:00	BRL Industrial Output (MoM)		1.2%	0.3%
11:00	BRL Industrial Output (YoY)		-1.8%	1.1%
n/a	ILS Budget Balance - ILS			-6.7B
11:30	INR M3 Money Supply			9.9%
12:00	USD MBA Mortgage Applications			1.5%
n/a	ILS FX Reserves			$121.361B
13:00	PLN NBP Base rate		1.5%	1.5%
13:15	USD ADP Employment Change		140K	125K
13:30	CAD Labor Productivity (QoQ)		0.8%	0.2%
14:45	USD Markit PMI Composite		51.9	51.9
14:45	USD Markit Services PMI		51.6	51.6
15:00	USD Fed's Quarles speech
15:00	USD ISM Non-Manufacturing PMI		54.5	54.7
15:00	CAD BoC Rate Statement
15:00	CAD BoC Interest Rate Decision		1.75%	1.75%
15:30	USD EIA Crude Oil Stocks Change		-1.798M	1.572M
16:15	CAD BoC Press Conference
23:00	KRW Current Account Balance		7.47B	7.48B
23:50	JPY Foreign Investment in Japan Stocks			¥131.7B
23:50	JPY Foreign Bond Investment			¥-155.2B
Thursday, Dec 05
24h	EUR EcoFin Meeting
00:30	AUD Retail Sales s.a. (MoM)		0.3%	0.2%
00:30	AUD Trade Balance		6,100M	7,180M
00:30	AUD Imports			3%
00:30	AUD Exports			3%
01:30	JPY BoJ's Harada speech
05:30	EUR Consumer Price Index n.s.a (YoY)			2.7%
06:15	INR Cash Reserve Ratio		4%	4%
06:15	INR RBI Interest Rate Decision (Repo Rate)		4.90%	5.15%
07:00	EUR Factory Orders n.s.a. (YoY)		-6.1%	-5.4%
07:00	EUR Factory Orders s.a. (MoM)		0.3%	1.3%
07:00	RON Gross Domestic Product			3%
08:00	EUR Industrial Output Cal Adjusted (YoY)		-0.5%	0.8%
08:00	HUF Retail Sales (YoY)			5.8%
08:00	EUR Gross Domestic Product Qtr Final (YoY)			1.3% Revised from 2.0%
n/a	EUR 10-y Obligaciones Auction			0.409%
n/a	EUR 3-y Bond Auction			-0.447%
n/a	EUR 5-y Bond Auction			-0.106%
09:50	EUR 10-y Bond Auction			-0.03%
10:00	USD OPEC Meeting
10:00	EUR Gross Domestic Product s.a (QoQ)			0.2%
10:00	EUR Unemployment Rate (MoM)			16.7%
10:00	EUR Gross Domestic Product s.a. (YoY)		1.2%	1.2%
10:00	EUR Gross Domestic Product s.a. (QoQ)		0.2%	0.2%
10:00	EUR Employment Change (YoY)		1%	1%
10:00	EUR Employment Change (QoQ)		0.1%	0.1%
10:00	EUR Retail Sales (YoY)		2.2%	3.1%
10:00	EUR Retail Sales (MoM)		-0.3%	0.1%
12:00	MXN Consumer Confidence s.a			43.89
12:00	MXN Consumer Confidence			44.05
12:30	USD Challenger Job Cuts			50.275K
13:00	RUB Central Bank Reserves $			$542.7B
13:00	CAD BoC's Lane Speech
13:30	USD Trade Balance		$-51.5B	$-52.5B
13:30	USD Continuing Jobless Claims		1.65M	1.64M
13:30	USD Initial Jobless Claims		215K	213K
13:30	USD Initial Jobless Claims 4-week average			219.75K
13:30	CAD Imports		$50.35B	$50.76B
13:30	CAD International Merchandise Trade		$-1.37B	$-0.98B
13:30	CAD Exports		$49.30B	$49.78B
15:00	USD Fed's Quarles speech
15:00	USD Factory Orders (MoM)		0.3%	-0.6%
15:00	CAD Ivey Purchasing Managers Index s.a		53.8	48.2
15:00	CAD Ivey Purchasing Managers Index			51.8
15:30	USD EIA Natural Gas Storage Change			-28B
16:30	USD 4-Week Bill Auction			1.62%
18:00	ARS Industrial Output n.s.a (YoY)			-5.1%
24h	EUR Independence Day
21:30	AUD AiG Performance of Construction Index			43.9
24h	EUR Spanish Constitution Day
23:30	JPY Labor Cash Earnings (YoY)		1.1%	0.5% Revised from 0.8%
23:30	JPY Overall Household Spending (YoY)		-3.0%	9.5%
23:50	JPY JP Foreign Reserves			$1,324.5B
Friday, Dec 06
00:00	COP Consumer Price Index (MoM)		0.17%	0.16%
00:00	COP Consumer Price Index (YoY)		3.91%	3.86%
05:00	JPY Leading Economic Index		92.0	91.9
05:00	JPY Coincident Index		101.5	101.1
06:00	ZAR Gross $Gold & Forex Reserve			$54.529B
06:00	ZAR Net $Gold & Forex Reserve			$44.606B
07:00	EUR Industrial Production n.s.a. w.d.a. (YoY)		-2.8%	-4.3%
07:00	EUR Industrial Production s.a. (MoM)		0.1%	-0.6%
07:00	DKK Industrial Production (MoM)			1.5%
07:00	NOK Manufacturing Output		0.1%	0.8%
07:45	EUR Trade Balance EUR		€-4.80B	€-5.55B
07:45	EUR Imports, EUR			€47.28B
07:45	EUR Exports, EUR			€41.73B
07:45	EUR Current Account			€-2.7B
08:00	EUR Wholesale Prices n.s.a (MoM)			-0.4%
08:00	EUR Wholesale Prices n.s.a (YoY)			-2.8%
08:00	HUF Industrial Output (YoY)			11.1%
08:00	CZK Retail Sales (YoY)		6.6%	7.3%
08:00	CHF Foreign Currency Reserves			779B
08:30	GBP Halifax House Prices (MoM)		-0.7%	-0.1%
08:30	GBP Halifax House Prices (3m/YoY)		1.0%	0.9%
08:30	SEK Industrial Production (YoY)			0.9%
08:30	SEK Industrial Production (MoM)			-0.2%
08:30	SEK New Orders Manufacturing (YoY)			-1.5%
09:00	USD OPEC Meeting
09:00	EUR Retail Sales s.a. (MoM)		-0.4%	0.7%
09:00	EUR Retail Sales n.s.a (YoY)		1.0%	0.9%
10:00	CLP Consumer Price Index (Inflation) (MoM)		0.6%	0.8%
10:00	CLP Core Consumer Price Index (Inflation) (MoM)			0.6%
11:30	INR Bank Loan Growth			8.1%
11:30	INR FX Reserves, USD			$448.6B
12:00	BRL IPCA Inflation		0.09%	0.10%
13:00	PLN Central Bank FX Reserves			€109.1B
13:00	RUB Consumer Price Index (MoM)		0.4%	0.1%
13:30	USD Nonfarm Payrolls		180K	128K
13:30	USD Average Weekly Hours		34.4	34.4
13:30	USD Average Hourly Earnings (YoY)		3%	3%
13:30	USD Labor Force Participation Rate		63.3%	63.3%
13:30	USD Average Hourly Earnings (MoM)		0.3%	0.2%
13:30	USD Unemployment Rate		3.6%	3.6%
13:30	USD U6 Underemployment Rate			7%
13:30	CAD Net Change in Employment		10.0K	-1.8K
13:30	CAD Average Hourly Wages (YoY)			4.36%
13:30	CAD Participation Rate		65.7%	65.7%
13:30	CAD Unemployment Rate		5.5%	5.5%
14:30	TRY Treasury Cash Balance			-11.89B
15:00	USD Michigan Consumer Sentiment Index		96.5	96.8
15:00	USD Wholesale Inventories		0.2%	0.2%
18:00	USD Baker Hughes US Oil Rig Count			668
20:00	USD Consumer Credit Change		$15.75B	$9.51B
20:30	USD CFTC USD NC Net Positions			$-16.8K
20:30	USD CFTC Oil NC Net Positions			470.9K
20:30	USD CFTC Gold NC Net Positions			$271.6K
20:30	GBP CFTC GBP NC Net Positions			£-36.6K
20:30	JPY CFTC JPY NC Net Positions			¥-39.6K
20:30	EUR CFTC EUR NC Net Positions			€-61.4K
20:30	AUD CFTC AUD NC Net Positions			$-45.4K
21:00	CLP BCCH Interest Rate			1.75%

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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