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Forex Today: Risk rebounds on easing US-China trade woes; UK wages, ZEW – Key

Forex Today witnessed a major turnaround in the risk sentiment in Tuesday’s Asian trading, in response to the latest report that China’s Vice Premier is heading to the US soon to bring out a resolution on the US-China trade talks. Markets believed this move by China could pave the way for clinching the much-awaited trade deal when the Trump-Xi meeting take place later this month. As a result, the appetite for the risk assets got a lift at the expense of the safe-havens.

The Asian equities stalled their declines and attempted a tepid recovery, sending the Yen lower across the board. The USD/JPY pair jumped back above the 114 handle briefly while the Aussie rebounded to 0.7220 levels, despite downbeat NAB readings. The Kiwi also followed suit and tested the 0.6750 upside barrier. Both the EUR and GBP were rescued, as the US dollar corrected sharply from multi-month tops amid risk-on market action.

Among the commodities, Gold prices on Comex bounced-off 1200 demand zone to now trade near 1205 region. Both crude benchmarks traded near multi-month lows, still weighed down by the US President Trump’s tweet on the OPEC output policy. 

Main Topics in Asia

UK PM May: Brexit talks in 'endgame', unsolved issues remain - Reuters

UK SMEs expect Sterling to fall sharply after Brexit

US auto-tariffs back in the forefront of EU, Japan talks - Reuters

Janet Yellen sees 3 or 4 Fed rate hikes in the next 12 months - Bloomberg

PBOC’s Yi: Previous policy measures caused an over tightening in credit policy

State-owned Chinese banks seen selling US dollars in onshore spot fx market - Reuters

BoJ’s balance sheet now larger than country's GDP - Reuters

USD/CNY to reach 7.0000 within six months – Goldman Sachs

China’s Premier Li: China is willing to improve free trade through discussion

China’s top trade war negotiator Liu to visit US to pave way for Xi-Trump meeting

Key Focus Ahead

The session ahead will be relatively busy, with full markets returning and a couple of first-tier macro news slated for release. The UK sees the release of the labor market report, with the main indicator likely to be the earnings growth, which will shape up the BOE’s next policy move. The UK jobs report will be reported at 0930 GMT, followed by the Eurozone and German ZEW survey due at 1000 GMT.  Apart from the macro data, the speeches by the ECB Governing Council members Praet and ECB Executive Board Member Lautenschlaeger are scheduled at 0800 GMT and 0845 GMT respectively.

In the NA session, no significant economic releases is due on the cards from the US and Canada. Hence, the Fedspeaks will grab some attention for fresh US dollar trades. The FOMC members Brainard and Kashkari will speak at 1500 GMT, but at different events while Daly’s speech is due at 2200 GMT.

EUR/USD: Risk bounce to be short-lived if Italy defies EU over big budget spend

The EUR/USD pair found bids in Asia, courtesy of renewed US-China trade optimism, however, sustainability of corrective rallies, if any, is under question as Italy is expected to resubmit a largely unchanged and a high-spend budget to the European Union today.

GBP/USD hoping for a grasp on 1.2900 ahead of Tuesday's UK Earnings report

Early Tuesday action sees the GBP getting a relief bounce as the US Dollar pauses across the board, but a continued bull-run is looking unlikely unless today's UK earnings figures can distract investors from the notable lack of forward momentum on Brexit proceedings.

UK: Wage growth is expected to remain strong – Barclays

The Barclays Research Team is out with its take on today’s UK labor market report due on the cards at 0930 GMT, with the key focus likely to be on the wage growth figures.

BREXIT deadlines: will a November Summit will occur? - ANZ

Analysts at ANZ Bank New Zealand Limited explained that the UK political uncertainty remains rife. 

Gold to perform admirably in 2019

“…as we look into our crystal ball and gaze into 2019, emerging warning signs can be seen that suggests 2019 could be the year where the gold bulls finally get their day in the sun.”

GMT
Event
Vol.
Actual
Consensus
Previous
Sunday, Nov 11
24h
 
 
Monday, Nov 12
24h
 
 
Tuesday, Nov 13
07:00
 
2.4%
2.4%
07:00
 
0.2%
0.2%
07:00
 
0.1%
0.1%
07:00
 
2.5%
2.5%
n/a
 
8.4%
8.3%
n/a
 
862B
1,380B
n/a
 
 
2.9%
08:00
 
 
08:15
 
0.1%
-0.2%
08:15
 
 
2.6%
09:30
 
4%
4%
09:30
 
3.0%
2.7%
09:30
 
3.1%
3.1%
09:30
 
 
2.6%
09:30
 
4.3K
18.5K
10:00
 
65.0
70.1
10:00
 
-25.0
-24.7
10:00
 
 
-19.4
11:00
 
108.0
107.9
15:00
 
 
16:30
 
 
2.2%
16:30
 
 
2.32%
16:30
 
 
2.45%
19:00
 
$-98B
$119B
22:00
 
 

Author

Dhwani Mehta

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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