Forex Today: China trade data rattles Asia; Brexit delay talks in focus

A renewed risk-aversion wave gripped the holiday-thinned Asian trading following downbeat Chinese trade imports and exports data that heightened global economic slowdown fears. In response to this, the Asian markets slipped led by the declines in the Chinese equities while the Antipodeans, the proxies for China, also took a huge beating across the board.

The safe-haven Yen rallied hard to test the 108 level versus its American peer, tracking the declines in the Treasury yields and the US equity futures. Amongst the European currencies, both the EUR and pound traded better bid amid a broadly weaker US dollar, as USD/CNY extended its 3-day bearish momentum.

On the commodities' front, both crude benchmarks and copper prices fell 1% amid China’s imports pain while gold futures on Comex advanced, with the 1300 level back on sight.

Main Topics in Asia

EU preparing Brexit delay until July - The Guardian

Brexit uncertainty taking toll on Britain's service sector - CBI

China to inject liquidity via reverse repo for the first time since June 2018

China’s full 2018 trade data: USD-denominated export growth hit highest since 2011

Oil continues to see support from OPEC constraints, US rig declines

China Customs: China's trade growth in 2019 may slow

China’s Dec trade balance (CNY): Exports and imports drop sharply

China’s December trade data (USD): Surplus expands 57.05bn, beats estimates

Goldman Sachs lowers USD/JPY 12-month forecast to 105.00

China SAFE said to double Qualified Foreign Institutional Investors program

Asian stocks mixed as China sees declines on disappointing Trade Balance

Key Focus Ahead

We have a quiet start to a busy week ahead, with a thin showing on the EUR calendar, as the main focus is likely to be centered on the Article 50 delay news a heading into the UK Parliamentary Brexit vote scheduled tomorrow. However, the Eurozone industrial production, due at 1000 GMT, could offer some trading incentives to the EUR, GBP traders. The industrial sector activity in Europe is expected to have contracted sharply in the month of November, with the output seen declining by 1% m/m and -1.4% y/y.

The NA session also remains data-light, with no releases from the US and the Canadian docket. But the NZIER business confidence and food price index data will be reported from New Zealand in the late-US session post-2100 GMT. There are no central bankers’ speeches lined up for today that will leave the fx space at the mercy of the broader market sentiment.

EUR/USD: Global growth fears may weigh over the EUR

The EUR/USD pair could come under pressure in Europe, as the global growth fears triggered by the below-forecast China trade numbers are likely to reverberate through the European and the US financial markets.

GBP/USD trimming the hatches with Brexit vote around the corner

Monday brings little action on the economic calendar, but Tuesday's parliamentary vote will see traders keeping a close eye on headlines today as they try to find a safe place to stand ahead of the almost-guaranteed washout of PM Theresa May's current withdrawal deal.

Gold Technical Analysis: Focus on today's UTC close

Acceptance below Friday's low of $1,286 would validate signs of bullish exhaustion near $1,300 and could yield a corrective pullback to $1,260. A daily close above $1,300 is required for bullish continuation.

Key notes for the week ahead: Brexit is the key focus and data events become the name of the game

We are entering the realms of data dependency once again and while today's schedule is pretty much void of scheduled calendar events …

 

GMT
Event
Vol.
Actual
Consensus
Previous
Monday, Jan 14
24h
 
 
10:00
 
-1.0%
0.2%
10:00
 
-1.4%
1.2%
16:30
 
 
2.41%
16:30
 
 
2.47%
21:00
 
 
-30%
21:45
 
 
-0.6%
23:50
 
 
2.3%
Tuesday, Jan 15
n/a
 
 
02:00
 
8.1%
8.0%
02:00
 
800B
1,250B
n/a
 
 
-1.3%
06:00
 
 
-16.8%
10:00
 
€13.7B
€14.0B
10:00
 
 
€12.5B
13:30
 
12.0
10.9
13:30
 
2.5%
2.5%
13:30
 
-0.1%
0.1%
13:30
 
2.7%
2.7%
13:30
 
0.2%
0.3%
13:55
 
 
0.8%
13:55
 
 
8.9%
n/a
 
 
2.8%
n/a
 
 
52.6
15:00
 
 
18:00
 
 

 

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