Resurgent USD demand was the main theme in Asia this Friday, as cautiousness crept back into markets amid the latest IAEA warning over North Korea’s nuclear developments. Despite mild risk-aversion, as reflected by mixed Asian equities and negative oil prices, the safe-havens such as the Yen and gold remained on the back foot. The Japanese currency also shrugged-off mixed data dump out of Japan, as the BOJ’s summary of opinions weighed down on the sentiment. Meanwhile, the Antipodeans incurred losses, having ignored better macro news.
Main topics in Asia
RBNZ 2017 Annual Report: NZ economy and financial system sound
The Reserve Bank of New Zealand (RBNZ) published its 2017 Annual Report in the overnight trades, citing that the NZ economy and financial system remain sound.
NZ building consents up 10% in Aug - Westpac
New Zealand’s residential building consents jumped by 10% in August and the increase was driven entirely by consents for multiples (apartments, townhouses etc) which had their single biggest month in 13 years, explains Michael Gordon, Research Analyst at Westpac.
BOJ Summary of Opinions: Chance of inflation hitting 2% target next year is low
The Bank of Japan (BOJ) Summar of Opinions at the monetary policy meeting on September 20/21 shows the policy makers believe the odds of inflation hitting the 2% target next year are low.
IAEA: North Korea has made rapid progress on nuke development
The International Atomic Energy Agency (IAEA), the United Nations (UN) nuclear watchdog, came out with a warning on Friday over the North Korean nuke tests.
South Korea bans all forms of initial coin offering in the country - RTRS
Reuters out with the latest update on the cryptocurrencies, citing that South Korea bans all forms of initial coin offering in the country, following China’s footsteps.
Key Focus ahead
On the final trading day, we have a busy economic calendar, with the traders awaiting the German retail sales data ahead of the European opening bells. In the European session, markets eagerly look forward to the UK current account and final GDP revision amid a string of second-liner macro news from the UK docket, while the German unemployment change and Eurozone flash CPI could provide fresh insights on the ECB monetary policy stance going forward.
For the NA traders, the Canadian GDP and RMPI data will kick-off an eventful session, following by the US dataflow, including the core PCE price index, personal spending, Chicago PMI and consumer sentiment. Amongst central bankers’ speeches, BOE Governor Carney’s will hog the limelight, while BOE MPC member Broadbent and FOMC member Harker are also scheduled speak in the NA session today.
GBP/USD: A busy session ahead, 1.3300 still on sight?
The GBP/USD pair resumed its recent bearish momentum in the Asian session, after a temporary reversal seen yesterday, as investors remain nervous ahead of a slew of key macro news from both the UK and US.
EUR/USD - Focus on inflation differential & the impact on bond yield spread
EUR/USD regained poised on Thursday as the USD rally stalled despite the upward revision of the US Q2 GDP. The currency pair closed at 1.1786 and traded flat lined around 1.780 levels in Asia.
EUR/GBP poised for potential breakdown amid key data
The end of this week brings a few more key data points that could result in a further significant impact on the EUR/GBP currency pair. Friday brings current account and trade data from the UK…
RBA to keep rates on-hold next Tuesday – Reuters Poll
Results of the latest Reuters poll showed that almost all the economists polled believe the Reserve Bank of Australia (RBA) will keep interest rates on-hold, when it meets next week.
Key Events AHead:
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EUR/USD retreats toward 1.0850 on modest USD recovery
EUR/USD stays under modest bearish pressure and trades in negative territory at around 1.0850 after closing modestly lower on Thursday. In the absence of macroeconomic data releases, investors will continue to pay close attention to comments from Federal Reserve officials.
GBP/USD holds above 1.2650 following earlier decline
GBP/USD edges higher after falling to a daily low below 1.2650 in the European session on Friday. The US Dollar holds its ground following the selloff seen after April inflation data and makes it difficult for the pair to extend its rebound. Fed policymakers are scheduled to speak later in the day.
Gold climbs to multi-week highs above $2,400
Gold gathered bullish momentum and touched its highest level in nearly a month above $2,400. Although the benchmark 10-year US yield holds steady at around 4.4%, the cautious market stance supports XAU/USD heading into the weekend.
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Week ahead: Flash PMIs, UK and Japan CPIs in focus – RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.