A quiet Asian affair this Thursday that saw risk-on action in the regional equities following the overnight de-escalation address by the US President Trump. Trump declared that Iran appeared to be standing down from military conflict with the US, the remarks that sent stock indexes surging higher.
Despite a better market moot, investors seemed a bit cautious amid the Baghdad Green Zone bombing while some believe that the US-Iran conflict is far from over. Two rockets reportedly hit Baghdad Green Zone a day after Iran missile attacks on US targets in Iraq.
Therefore, USD/JPY’s upside remained capped near Wednesday’s high of 109.25 while the US Treasury yields fell back in the red zone. Gold prices lacked any recovery momentum and ranged around $1560 levels.
Meanwhile, the Antipodeans saw some fresh signs of life and advanced despite downbeat Australian Trade data and Chinese inflation report. The Aussie held onto the recovery gains below 0.6880 region while the Kiwi battled 0.6650. Despite the bounce in oil prices, the Canadian dollar failed to benefit, with USD/CAD sidelined below 1.3050.
Amongst the European currencies, EUR/USD attempted a tepid bounce from two-week lows of 1.1104 while the cable posted small gains on the 1.31 handle.
Main Topics in Asia
US Defense Secretary (referring to Wednesday’s attack): Nothing major damaged
US FBI, Homeland Security warned of Iranian terror and cyber threat – CNN
World Bank trims 2020 growth forecast, cites slow recovery in trade/investment
Aussie trade balance (Nov): 5800 M vs expected 5915 M
Odds of RBA rate cut on the rise as Aussie bushfires regenerate
Fed economist: Moderate US recession may push long-term rates near zero - Bloomberg
Chinese Consumer Price Index (YoY): +4.5% (vs +4.7 % exp)
US General Milley: Iran intended to kill US personnel in missile attack - Reuters
Iran’s response to the US attack underlines its capacity for careful calculation - FT
Moody's: Outlook for Asia-Pacific (APAC) sovereigns in 2020 is negative
US in a letter to UN says it stands ready to engage in serious negotiations with Iran
USD/INR Technical Analysis: Probes three-week winning streak, heavy below 72.57
Key Focus Ahead
With tensions having eased over the US-Iran geopolitical crisis, the attention has shifted back on the fundamentals. The immediate attention remains on a slew of relevant macro news from Germany, including the Industrial Production, Current Account and Trade data, all of which will drop in at 0700 GMT. Soon after, the Swiss Real Retail Sales report will be published at 0730 GMT. Meanwhile, at 1000 GMT, the Eurozone Unemployment Rate will be reported for November.
We have nothing of significance, in terms of macro news, from the UK calendar. However, the Bank of England (BOE) Governor Carney’s speech due at 0930 GMT will be closely heard. Carney is due to deliver opening remarks at The Future of Inflation Targeting Conference, in London.
In the NA session, the US Weekly Jobless Claims and Canadian Housing data will headline at 1330 GMT while the speeches from the European Central Bank (ECB) as well as from the US Federal Reserve (Fed) policymakers will also grab some market attention. Bank of Canada (BOC) Governor Poloz is also due to speak at 1900 GMT.
The focus will also remain on any updates on the US-Middle East front for fresh impulse on the market sentiment.
When is the German Industrial Production and how could it affect EUR/USD?
EUR/USD consolidates the tepid bounce from two-week lows of 1.1104 reached in early Asia ahead of the German data. Germany’s Industrial Production is unlikely to see any positive surprise in November, as suggested by the lead indicators.
GBP/USD benefits from Brexit optimism ahead of Carney’s speech
GBP/USD stays mildly positive within a choppy range around 1.3100 while heading into the London open on Thursday. Traders will now focus on the BOE Governor’s remarks for fresh direction.
Do manufacturing and service PMIs depict the same US economy?
Sentiment in the manufacturing and service sectors diverge in December. Employment indexes in both sectors declined, manufacturing to a decade low.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD rises toward 1.0700 after Germany and EU PMI data
EUR/USD gains traction and rises toward 1.0700 in the European session on Monday. HCOB Composite PMI data from Germany and the Eurozone came in better than expected, providing a boost to the Euro. Focus shifts US PMI readings.
GBP/USD holds above 1.2350 after UK PMIs
GBP/USD clings to modest daily gains above 1.2350 in the European session on Tuesday. The data from the UK showed that the private sector continued to grow at an accelerating pace in April, helping Pound Sterling gather strength.
Gold price flirts with $2,300 amid receding safe-haven demand, reduced Fed rate cut bets
Gold price (XAU/USD) remains under heavy selling pressure for the second straight day on Tuesday and languishes near its lowest level in over two weeks, around the $2,300 mark heading into the European session.
Here’s why Ondo price hit new ATH amid bearish market outlook Premium
Ondo price shows no signs of slowing down after setting up an all-time high (ATH) at $1.05 on March 31. This development is likely to be followed by a correction and ATH but not necessarily in that order.
US S&P Global PMIs Preview: Economic expansion set to keep momentum in April
S&P Global Manufacturing PMI and Services PMI are both expected to come in at 52 in April’s flash estimate, highlighting an ongoing expansion in the private sector’s economic activity.