Forex Today: Volatile in Asia as US-China trade risks mount; German IFO, Brexit eyed

We had a volatile Asian start, with big gaps seen across the fx space (as expected) amid the US-China trade war escalation. The trade developments on Friday and over the weekend emerged the main market driver and triggered a wave of risk-aversion in the Asian hours, which boosted the demand for the safe-havens: Yen, the Swiss Franc and Gold at the expense of the risk assets such as oil, equities, Antipodeans and Treasury yields.

However, markets witnessed a calm towards Asia close/ early European trades, as the bears took a breather amid conciliatory remarks from both the US and China while fresh US-Japan trade optimism also helped ease some nerves. Amongst the Asia-pac currencies, USD/JPY enjoyed good two-way price movements, initially hitting fresh multi-year lows near 104.47 on a bearish opening gap. Subsequently, the spot spikes to 105.78 highs before reversing below the 105.50 level. The Antipodeans were the worst performers, as they are Chinese proxies, with Kiwi downed to 0.6341 before recovering to near 0.6375 region while the Aussie found fresh bids once again below the 0.67 handle and retested the 0.6750 barrier on the road to recovery. The USD/CHF pair traded modestly flat around 0.9750 levels despite risk-aversion. Both the EUR/USD and Cable also remained trapped in a range, unable to benefit from the US-China trade escalation so far this Monday.

On the commodities’ front, gold held onto the recent gains near 1550 levels, with the bias leaning towards the upside while both crude benchmarks traded in the red amid intensifying trade spat and global growth concerns.

Main Topics in Asia

US-China trade updates

Forex Today: trade war overshadows it all

China’s Vice Premier Liu: China is willing to resolve trade dispute with US via calm negotiations

Trump's decision to escalate the tariff war a "strategic mistake" – People’s Daily

US Pres. Trump aides say he isn’t ordering US companies out of China – WSJ

Other key headlines

US two-year yield hits lowest since September 2017 on trade tensions

PBOC sets Yuan reference rate at 7.0570

USD/CNH retraces from record high amid US-China trade war

WTI technical analysis: Oversold RSI conditions favor recovery from 23.6% Fibo.

Asian stocks follow the DJIA's lead, bears look to DJIA Fibo lows

Japan’s Suga: ‘Do not think we compromised much in trade talks with the US’

S. Korea’s FinMin Kim: To take steps on forex regardless of currency level

Gold: Risk-off rally stalls after US, China aim to calm trade war fears

China’s NDRC: China to lower capital requirement ratio for infrastructure projects

China's offshore Yuan Hibor rises to highest since November 2018

Japan agrees to import additional 2.5 million tonnes of feed core from the US - Kyodo

Key Focus Ahead

There is nothing of relevance on the European calendar this Monday, except for the German IFO business survey, dropping in at 0800 GMT. In the NA session, the US Durable Goods data will headline among other minority reports.

However, the market sentiment will be exclusively driven by fresh US-China trade developments after last Friday’s trade escalation while the focus also remains on the Brexit-related headlines for fresh trading impulse.

EUR/USD: Friday's bullish outside day makes today's close pivotal, eyes German IFO data

EUR/USD created a bullish outside day on Friday – an early warning of a bullish reversal. A close above Friday's high of 1.1153 is needed to confirm the trend change. The bullish close may remain elusive if German IFO data prints below estimates amid escalating trade tensions.

GBP/USD holds above 21-day EMA as markets shrug-off no-deal Brexit fears amid trade war

With the risk aversion gaining major market attention, GBP/USD remains above near-term key support (previous resistance), while holding above 1.2250 ahead of Monday’s London open. Focus on Brexit/ trade headlines ahead of US data.

Brexit: Entering the business end of negotiations - ANZ

In the view of the analysts at Australia and New Zealand Banking Group (ANZ), Brexit uncertainty will be intense in coming weeks, as we head closer to the October 31^st deadline.

GMT	Event	Actual	Consensus	Previous
Sunday, Aug 25
24h	EUR G7 Meeting
22:45	NZD Exports	$5.03B		$4.97B Revised from $5.01B
22:45	NZD Imports	$5.71B		$4.63B Revised from $4.65B
Monday, Aug 26
05:00	EUR Export Prices (YoY)	-2.0%		-1.5%
05:00	EUR Import Prices (YoY)	-2.0%		-2.6%
05:00	EUR Producer Price Index (YoY)	-0.8%		-0.9%
05:00	SGD Industrial Production (MoM)	3.6%	-1.8%	-0.3% Revised from 1.2%
05:00	SGD Industrial Production (YoY)	-0.4%	-4.9%	-8.1% Revised from -6.9%
05:00	JPY Coincident Index	100.4		100.4
05:00	JPY Leading Economic Index	93.3	93.3	93.3
06:00	DKK Retail Sales (YoY)			-1.1%
07:00	TRY Capacity Utilization
07:00	TRY Manufacturing Confidence			98.3
n/a	SEK Capacity Utilization			0.5%
08:00	EUR IFO - Expectations		91.5	92.2
08:00	EUR IFO - Business Climate		95.1	95.7
08:00	EUR IFO - Current Assessment		98.6	99.4
08:00	PLN Unemployment (MoM)		5.3%	5.3%
12:30	USD Chicago Fed National Activity Index			-0.02
12:30	USD Nondefense Capital Goods Orders ex Aircraft		0.0%	1.5% Revised from 1.9%
12:30	USD Durable Goods Orders		1.1%	1.9% Revised from 2.0%
12:30	USD Durable Goods Orders ex Transportation		0.1%	1.0% Revised from 1.2%
12:30	USD Durable Goods Orders ex Defense			2.9% Revised from 3.1%
13:30	BRL Current Account		$-1.5B	$-2.9B
14:30	USD Dallas Fed Manufacturing Business Index			-6.3
21:00	KRW Consumer Sentiment Index			95.9
23:50	JPY Corporate Service Price (YoY)			0.7%
23:50	JPY Large Retailers' Sales			-0.5%
Tuesday, Aug 27
05:00	EUR Industrial Confidence			-5
05:00	EUR Consumer Confidence			-3.9
06:00	EUR Gross Domestic Product (QoQ)		-0.1%	-0.1%
06:00	EUR Gross Domestic Product w.d.a (YoY)		0.4%	0.4%
06:00	EUR Gross Domestic Product (YoY)			0%
06:45	EUR Consumer Confidence		101	102
06:45	EUR Individual Investment (Current Year)			11%
06:45	EUR Business Climate			101
07:30	SEK Producer Price Index (YoY)			2.5%
07:30	SEK Producer Price Index (MoM)			-0.2%
07:30	SEK Trade Balance (MoM)			2.9B
08:30	GBP BBA Mortgage Approvals			42.653K
11:00	MXN Jobless Rate			3.6%
11:00	MXN Jobless Rate s.a			3.5%
11:00	MXN Trade Balance s/a, $			$1.459B
11:00	MXN Trade Balance, $		$0.460B	$2.561B
12:00	HUF MNB Interest Rate Decision		0.9%	0.9%
12:30	EUR Current Account Balance EUR			€-127B
12:55	USD Redbook Index (MoM)			-1.7%
12:55	USD Redbook Index (YoY)			4.9%
13:00	USD S&P/Case-Shiller Home Price Indices (YoY)			2.4%
13:00	USD Housing Price Index (MoM)			0.1%
14:00	USD Consumer Confidence
14:00	USD Richmond Fed Manufacturing Index			-12
20:30	USD API Weekly Crude Oil Stock			-3.5M
23:00	GBP BRC Shop Price Index (YoY)			-0.1%
Wednesday, Aug 28
01:30	AUD Construction Work Done		-1.0%	-1.9%
06:00	EUR Gfk Consumer Confidence Survey		9.7	9.7
06:00	NOK Credit Indicator			5.7%
07:00	TRY Economic confidence index			80.7
07:00	HUF Unemployment Rate (3M)			3.3%
07:30	SEK Retail Sales (YoY)			3.8%
07:30	SEK Retail Sales (MoM)			1%
08:00	EUR Consumer Confidence		109.6	113.4
08:00	EUR Business Confidence			100.1
08:00	EUR Purchasing Manager Index			47
08:00	EUR Private Loans (YoY)			3.3%
08:00	EUR M3 Money Supply (3m)		4.7%	4.7%
08:00	EUR M3 Money Supply (YoY)		4.6%	4.5%
08:00	CHF ZEW Survey - Expectations			-24
09:40	EUR 10-y Bond Auction			-0.41%
10:00	EUR Retail Sales (MoM)			1.2%
10:00	EUR Retail Sales (YoY)			0.1%
11:00	USD MBA Mortgage Applications			-0.9%
11:30	INR M3 Money Supply			10.1%
13:00	ILS BoI Interest Rate Decision		0.25%	0.25%
14:30	USD EIA Crude Oil Stocks Change			-2.732M
21:00	KRW BOK Manufacturing BSI			74
23:50	JPY Foreign Bond Investment			¥499.7B
23:50	JPY Foreign Investment in Japan Stocks			¥-359.6B
Thursday, Aug 29
01:00	NZD ANZ Activity Outlook			5%
01:00	NZD ANZ Business Confidence			-44.3
01:30	AUD Private Capital Expenditure		0.5%	-1.7%
05:00	JPY Consumer Confidence Index			37.8
06:00	EUR Import Price Index (MoM)		-0.8%	-1.4%
06:00	EUR Import Price Index (YoY)		-1.5%	-2.0%
06:00	DKK Industrial Outlook			-7
06:00	DKK Unemployment Rate			3.1%
06:00	NOK Gross Domestic Product Growth			-0.1%
06:00	NOK Gross Domestic Product Growth Mainland		0.4%	0.3%
06:45	EUR Consumer Spending (MoM)			-0.1%
06:45	EUR Gross Domestic Product (QoQ)			0.2%
07:00	EUR HICP (YoY)			0.6%
07:00	EUR HICP (MoM)			-1.1%
07:00	EUR Consumer Price Index (MoM)			-0.6%
07:00	EUR Consumer Price Index (YoY)			0.5%
07:00	SEK Consumer Confidence (MoM)			97.7
07:55	EUR Unemployment Rate s.a.		5%	5%
07:55	EUR Unemployment Change			1K
08:00	EUR Industrial Sales s.a. (MoM)			1.6%
08:00	EUR Industrial Orders s.a (MoM)			2.5%
08:00	EUR Industrial Orders n.s.a (YoY)			-2.5%
08:00	EUR Industrial Sales n.s.a. (YoY)			0.3%
09:00	EUR Producer Price Index (MoM)			-0.3%
09:00	EUR Producer Price Index (YoY)			0.9%
09:00	ISK Consumer Price Index (YoY)			3.1%
09:00	ISK Consumer Price Index (MoM)			-2%
09:00	EUR Services Sentiment		10.6	10.6
09:00	EUR Consumer Confidence			-7.1
09:00	EUR Industrial Confidence		-7.4	-7.4
09:00	EUR Business Climate		0.08	-0.12
09:00	EUR Economic Sentiment Indicator		102.6	102.7
09:30	ZAR Producer Price Index (YoY)		5.8%	5.8%
09:30	ZAR Producer Price Index (MoM)		0.4%	0.4%
11:00	BRL Inflation Index/IGP-M		0.55%	0.40%
11:00	EUR Consumer Price Index (MoM)			0.08%
11:00	EUR Consumer Price Index (YoY)			1.42%
12:00	EUR Consumer Price Index (YoY)		1.5%	1.7%
12:00	EUR Consumer Price Index (MoM)		0.3%	0.5%
12:00	EUR Harmonized Index of Consumer Prices (YoY)		1.3%	1.1%
12:00	EUR Harmonized Index of Consumer Prices (MoM)		0.5%	0.4%
12:00	BRL Gross Domestic Product (YoY)		0.5%	0.5%
12:00	BRL Gross Domestic Product (QoQ)		-0.2%	-0.2%
12:30	USD Continuing Jobless Claims			1.674M
12:30	USD Initial Jobless Claims			209K
12:30	USD Initial Jobless Claims 4-week average			214.5K
12:30	USD Gross Domestic Product Annualized		2.0%	2.1%
12:30	USD Gross Domestic Product Price Index		2.5%	2.5%
12:30	USD Wholesale Inventories			0%
12:30	USD Goods Trade Balance			$-74.16B Revised from $-74.17B
12:30	USD Personal Consumption Expenditures Prices (QoQ)			2.3%
12:30	USD Core Personal Consumption Expenditures (QoQ)			1.8%
12:30	CAD Current Account		-18.00B	-17.35B
13:00	RUB Central Bank Reserves $			$528.4B
14:00	USD Pending Home Sales (YoY)			1.6%
14:00	USD Pending Home Sales (MoM)		0.5%	2.8%
14:30	USD EIA Natural Gas Storage Change			59B
22:45	NZD Building Permits s.a. (MoM)			-3.9%
23:00	KRW Industrial Output Growth			0.2%
23:00	KRW Industrial Output (YoY)			-2.9%
23:00	KRW Service Sector Output			-1%
23:01	GBP GfK Consumer Confidence			-11
n/a	EUR Consumer Confidence			85.5
23:30	JPY Tokyo CPI ex Food, Energy (YoY)			0.8%
23:30	JPY Tokyo CPI ex Fresh Food (YoY)		0.8%	0.9%
23:30	JPY Tokyo Consumer Price Index (YoY)			0.9%
23:30	JPY Jobs / Applicants Ratio		1.62	1.61
23:30	JPY Unemployment Rate		2.4%	2.3%
23:50	JPY Industrial Production (MoM)		-2.0%	-3.3%
23:50	JPY Industrial Production (YoY)			-3.8%
23:50	JPY Retail Trade (YoY)		0.2%	0.5%
23:50	JPY Retail Trade s.a (MoM)			0%
Friday, Aug 30
24h	TRY Victory Day
01:00	KRW BoK Interest Rate Decision			1.5%
01:30	AUD Private Sector Credit (MoM)			0.1%
01:30	AUD Private Sector Credit (YoY)			3.3%
01:30	AUD Building Permits (MoM)		1.0%	-1.2%
01:30	AUD Building Permits (YoY)			-25.6%
n/a	AUD HIA New Home Sales (MoM)			-12.4%
05:00	EUR Gross Domestic Product (QoQ)			0.2%
05:00	EUR Gross Domestic Product Qtr Prelim (YoY)			1.2%
05:00	JPY Housing Starts (YoY)		-3.4%	0.3%
05:00	JPY Construction Orders (YoY)			-4.2%
05:00	JPY Annualized Housing Starts			0.922M
06:00	EUR Retail Sales (MoM)			3.5%
06:00	EUR Retail Sales (YoY)			-1.6%
06:00	DKK Gross Domestic Product (QoQ)			0.1%
06:00	ZAR Private Sector Credit		7.07%	6.91%
06:00	ZAR M3 Money Supply (YoY)			8.99%
06:00	GBP Nationwide Housing Prices n.s.a (YoY)			0.3%
06:00	GBP Nationwide Housing Prices s.a (MoM)			0.3%
06:00	NOK Retail Sales			-0.4%
06:45	EUR Producer Prices (MoM)			-0.5%
06:45	EUR Consumer Price Index (EU norm) (MoM)			-0.2%
06:45	EUR Consumer Price Index (EU norm) (YoY)			1.3%
06:45	EUR Budget			€-77.34B
07:00	TRY Foreign Arrivals			18.1%
n/a	EUR Retail Sales (YoY)			2.4%
07:00	EUR Producer Price Index (MoM)			-0.4%
07:00	EUR Producer Price Index (YoY)			-0.2%
07:00	HUF Gross Wages (YoY)			11.2%
07:00	HUF Gross Domestic Product (YoY)			4.9%
07:00	CZK Gross Domestic Product (YoY)		2.6%	2.7%
07:00	CHF KOF Leading Indicator		93.0	97.1
08:00	EUR Unemployment		10.0%	9.7%
08:00	PLN Consumer Price Index (YoY)			2.9%
08:00	PLN Consumer Price Index (MoM)			0%
08:00	PLN Gross Domestic Product Qtr (YoY)			4.4%
08:00	EUR Current Account Balance			€2.7B
08:00	NOK Registered Unemployment s.a			78.6K
08:00	NOK Registered Unemployment n.s.a			2.4%
08:30	GBP Net Lending to Individuals (MoM)			£4.8B
08:30	GBP Consumer Credit			£1.046B
08:30	GBP Mortgage Approvals		65.75K	66.44K
08:30	GBP M4 Money Supply (YoY)			2.3%
08:30	GBP M4 Money Supply (MoM)			0.1%
08:30	EUR Consumer Confidence			-8
08:30	EUR Business Confidence			2.3
08:30	HKD Retail Sales			-6.7%
09:00	EUR Consumer Price Index (YoY)			0.4%
09:00	EUR Consumer Price Index (EU Norm) (YoY)		0.5%	0.3%
09:00	EUR Consumer Price Index (MoM)			0%
09:00	EUR Consumer Price Index (EU Norm) (MoM)			-1.8%
09:00	EUR Retail Sales (YoY)			-2.4%
09:00	EUR Producer Price Index (YoY)			-1.8%
09:00	ISK Gross Domestic Product (YoY)			1.7%
09:00	EUR Unemployment Rate		7.5%	7.5%
09:00	EUR Consumer Price Index - Core (YoY)			0.9%
09:00	EUR Consumer Price Index (YoY)		1.1%	1.0%
09:30	ZAR Unemployment Rate (%)			29%
09:30	ZAR Unemployment Total			6.7M
10:00	EUR Gross Domestic Product (YoY)		0.1%	0.0%
10:00	EUR Gross Domestic Product (QoQ)			0%
10:00	INR Federal Fiscal Deficit, INR			4,320.55B
11:00	CLP Unemployment rate			7.1%
n/a	EUR Gross Domestic Product (QoQ)			0.5%
n/a	EUR Gross Domestic Product (YoY)			1.8%
11:30	INR Bank Loan Growth			12.2%
11:30	INR FX Reserves, USD			$430.5B
12:00	BRL Unemployment Rate			12%
12:00	ZAR Trade Balance (in Rands)			4.42B
12:00	INR Infrastructure Output (YoY)			0.2%
12:00	INR Gross Domestic Product Quarterly (YoY)		6.3%	5.8%
12:30	USD Personal Consumption Expenditures - Price Index (MoM)			0.1%
12:30	USD Personal Income (MoM)		0.3%	0.4%
12:30	USD Core Personal Consumption Expenditure - Price Index (MoM)		0.2%	0.2%
12:30	USD Personal Consumption Expenditures - Price Index (YoY)			1.4%
12:30	USD Core Personal Consumption Expenditure - Price Index (YoY)		1.6%	1.6%
12:30	USD Personal Spending		0.5%	0.3%
12:30	CAD Raw Material Price Index			-5.9%
12:30	CAD Industrial Product Price (MoM)		-0.1%	-1.4%
12:30	CAD Gross Domestic Product Annualized (QoQ)		0.7%	0.4%
12:30	CAD Gross Domestic Product (MoM)			0.2%
13:00	CLP Industrial Production (YoY)			-2.9%
13:00	EUR Gross Domestic Product (QoQ)			0.2%
13:30	BRL Primary Budget Surplus		-12.5B	-12.7B
13:30	BRL Nominal Budget Balance			-30.1B
13:45	USD Chicago Purchasing Managers' Index		47.0	44.4
14:00	USD Michigan Consumer Sentiment Index		98.5	92.1
15:00	COP National Jobless Rate			9.4%
17:00	USD Baker Hughes US Oil Rig Count
19:30	USD CFTC Oil NC Net Positions			414.6K
19:30	USD CFTC Gold NC Net Positions			$300K
19:30	USD CFTC USD NC Net Positions			$56.6K
19:30	GBP CFTC GBP NC Net Positions			£-92.4K
19:30	JPY CFTC JPY NC Net Positions			¥31.2K
19:30	EUR CFTC EUR NC Net Positions			€-38K
19:30	AUD CFTC AUD NC Net Positions			$62.8K
20:00	COP Interest rate		4.25%	4.25%
21:00	MXN Fiscal Balance, pesos			-152.27B
Saturday, Aug 31
01:00	CNY NBS Manufacturing PMI		49.6	49.7
01:00	CNY Non-Manufacturing PMI			53.7

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