Forex today witnessed a quiet Asian affair amid a cautious risk tone, with most majors sticking to thin trading ranges while the US dollar attempted a tepid bounce broadly. The Asian stock markets traded mixed, as markets remained unnerved ahead of the key Eurozone and Chinese macro releases. Oil prices also traded on the back foot heading into the US weekly supply data release. Meanwhile, gold traded modestly flat near 1285, with the bias leaning towards the downside.
Amongst the G10 currencies, the AUD/USD pair was the worst performer, as the Aussie dollar incurred steep losses following the release of the RBA April meeting’s minutes that was widely read as dovish. Its OZ neighbor, the Kiwi, enjoyed some good two-way businesses, having tripped to near 0.6740 region on dovish remarks from the RBNZ Governor Orr before recovering to the familiar ranges around 0.6765 levels. The USD/JPY pair was stuck in 20-pips trading range near the 112 handle, with the JPY bulls unfazed by the BOJ Governor Kuroda’s willingness to ease the monetary policy further, if required. Both the Euro and the GBP remained confined within its recent trading ranges while the Loonie recovered losses and traded below the 1.34 handle.
Main Topics in Asia
Japan’s EcoMin Motegi: Already agreed on the FX (with US), frank and good trade talks
RBA minutes: Likelihood of near term rate hike is low, Aussie slips
Fed’s Rosengren: Not in favor of Fed using negative rates
China home prices ticked +0.6% higher in March
BOJ's Kuroda: ETF purchases are not aimed at stabilizing the stock market
BOJ’s Kuroda: Will consider additional easing if momentum towards 2% inflation is lost
Brent Technical Analysis: Bearish RSI divergence seen in 4H chart
USD/IDR: Indonesian Rupiah trades at 2-month highs ahead of Indonesian elections
RBNZ's Orr: NZD currently around "happy space", easing bias remains in place for now
Germany's Maas: No Brexit extension beyond October
Key Focus Ahead
The EUR calendar ahead remains relatively eventful, with the UK employment data and German ZEW survey to headline. The UK jobs and wage growth report will drop in at 0830 GMT and is expected to have a major impact on the GBP, given no fresh updates on the Brexit front. Meanwhile, the shared currency could be influenced by the German ZEW survey for April, with a rebound expected in the German economic sentiment.
In the NA session, the Canadian manufacturing sales will release at 1230 GMT, followed by the US capacity utilization and industrial figures due at 1315 GMT. Also, of note remains New Zealand’s GDT price index data that will be published around 1400 GMT. Oil and Loonie traders will await the release of the US API weekly crude stocks data that is slated for release late-Tuesday at 2030 GMT. Meanwhile, the NZ inflation report will remain the key focus in the early Asian trading alongside the Indonesian Presidential elections.
The shared currency is struggling to pick up a bid despite tighter Greek-German 10-year government bond yield spread. A better-than-expected German Zew survey, due at 09:00 GMT, could yield a sustained move above 1.1320.
GBP/USD: 5-week old resistance-line in focus ahead of UK employment data
Traders may now concentrate on February month average earnings and unemployment rate from the UK, coupled with the British claimant count change for March, ahead of focusing on the US industrial production figure.
UK jobs report preview: With Brexit on the back burner, upbeat wages could lift the pound
The British labor market is doing quite well. The jobless rate dropped to 3.9% in January, with record employment. Wages grew at a satisfactory standard of 3.4%, including and excluding bonuses.
When are the Indonesian general elections and how could they affect USD/IDR?
The Indonesian general elections will be held on 17 April 2019. For the first time in the country's history, the president, the vice president, and members of the People's Consultative Assembly (MPR), will be elected on the same day with over 190 million eligible voters.
China GDP Preview: What you see is what you will get
China's annual gross domestic product (GDP) is expected to decline to 6.3% in the first quarter of 2019 from 6.4% in the final three months of 2018. On the quarter it is projected to slide to 1.4% from 1.5%.
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