Broad-based US dollar consolidation was the main underlying theme in Asia, as the USD bulls took a breather ahead of the US jobs and prelim GDP figures. As a result, most majors remained confined within tight ranges. However, the Yen emerged a big mover, as a revival of trade tensions between the US and China combined with ongoing Italian political turmoil continued to weigh negatively on the investors’ sentiment.
Meanwhile, the Antipodeans traded mixed, with the Kiwi better bid on upbeat RBNZ Financial Stability Report (FSR). The Aussie suffered on the back of a bigger-than-expected drop in the Australian building consents data while negative oil prices and Asian equities also dampened the sentiment around the higher-yielding currency. Gold prices on Comex, on the other hand, traded flat just below $ 1300 mark, with the upside capped by a solid rebound in Treasury yields across the curve.
Main topics in Asia
Canada's Trudeau: won't sign a bad NAFTA deal
Canada's Prime Minister, Justin Trudeau, made statements today about the current state of NAFTA renegotiations, reaffirming his dedication to a fair deal.
RBNZ Financial Stability Report: financial systems remain sound, LVRs to remain unchanged
The Reserve Bank of New Zealand's (RBNZ) Financial Stability Report hit markets early on Wednesday, delivering the central bank's outlook on the New Zealand economy.
US to continue tariffs against China if demands aren't met - Reuters
As reported by Reuters, the White House made a statement on Tuesday reminding China that they are still withholding tariffs on a targeted $50 billion of Chinese imports, and if …
BoJ's Kuroda: must explore reasons for slow growth
Bank of Japan (BoJ) Governor Kuroda stated that the central bank must begin to investigate the possible reasons behind Japan's still-sluggish inflation and lagging wage growth.
RBNZ’s Orr: Pleased credit growth has slowed, but hasn't slowed for long enough
The Reserve Bank of New Zealand Governor Adrian Orr is back on the wires now, via Reuters, testifying about the Financial Stability Report (FSR) before the Parliament Select Committee, in Wellington.
Mexico’s President Nieto: “NO. Mexico will NEVER pay for a wall”
Mexican President Enrique Peña Nieto tweeted that “NO. Mexico will NEVER pay for a wall. Not now, not ever," responding to the US President Trump’s comments delivered at a rally.
North Korea, US speed up summit preparations - Yonhap
Yonhap, South Korea’s state-run news agency, reports updates on the upcoming US-North Korea June 21st Summit.
Dollar Index rests above 200-week MA, T-yields recover from 6-week lows
Currently, the dollar index (DXY) is trading in a sideways manner above 94.85 (200-week MA), having clocked a high of 95.03 yesterday despite the drop in the treasury yields to six-week lows.
UK shop prices show biggest fall since January 2017 - BRC
British shop prices fell by 1.1 percent in year-on-year terms - the biggest drop since January 2017 compared to a 1 percent drop in April, the survey released by British Retail Consortium (BRC) showed.
China ready to fight back if US looks to reignite a trade war - Xinhua
In response to the White House statement released on Tuesday, the Chinese state media, Xinhua, said that China hoped that the US would not act impulsively but stood ready to fight to protect its own interests.
Key Focus ahead
We have a relatively busy EUR calendar today, with the German retail sales release to kick-off the early European trading. The Spanish flash CPI, Swiss datasets and German employment data will be reported alongside the releases of a slew of Eurozone confidence gauges in the European session. However, the main event risk in Europe remains the German preliminary CPI report.
The NA session is likely to be eventful, with a flurry of the US economic releases due on the cards, including the key ADP jobs and prelim GDP data among other minority reports. The CAD traders will look forward to the Canadian current account figures ahead of the Bank of Canada (BOC) interest rate decision for fresh momentum. Meanwhile, the US API weekly crude stockpiles data will be eyed for fresh oil-price trades. Besides, the speech by the Swiss National Bank (SNB) Chairman Jordan will be heard for any change of language on the exchange rate value.
EUR/USD: Market most oversold since 2015, eyes Italian yields and German CPI
The EUR/USD pair fell to 1.1510 on Tuesday- the lowest level since July 20. Hence, a corrective rally could be in the offing and could be a sharp one if the Italian bond yields drop and the German preliminary CPI for May beat estimates.
GBP/USD struggling to build back up after shedding 1.33
Wednesday is a fairly dry showing for the GBP/USD, and the only slated showing for the pair on the economic calendar is the GFK Consumer Confidence Index for May. Slowing economic conditions continue to hamper the Sterling.
Analysts at Nomura offered a preview of the forthcoming key US data today.
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AUD/USD trades modestly flat above 0.6400 after Aussie trade data
AUD/USD reacts little to better-than-expected Australian Goods Trade Balance data and remains in a range above 0.6400 early Thursday. Rising bets for an early RBA rate cut cap the Aussie's upside amid China's economic woes and US-Sino trade war fears. Eyes turn to US data, Fedspeak.
USD/JPY fades the dovish BoJ commentary-led uptick above 150.50
USD/JPY is reversing the bounce to near 150.70 in the Asian session on Thursday. The pair remains weighed down by rising bets for another BoJ rate hike this month, shrugging off the dovish comments from BoJ policymaker Nakamura and a modest recovery in the US Treasury bond yields.
Gold price lacks firm near-term direction and is stuck in a familiar range
Gold price extends its sideways consolidative price move in a familiar range, awaiting a fresh catalyst before the next leg of a directional move. Geopolitical tensions, trade war fears and the overnight decline in the US bond yields offer support to the safe-haven XAU/USD.
Ripple's XRP could see a price rebound despite retail activity decline, RLUSD launch delay
XRP traded near $2.4 on Wednesday as Ripple Labs clarified that its RLUSD stablecoin will not debut on exchanges despite a rumored launch among crypto community members. Amid a sharp decline in XRP's price, on-chain data shows the remittance-based token still has the potential to resume its rally.
Four out of G10
In most cases, the G10 central bank stories for December are starting to converge on a single outcome. Here is the state of play: Fed: My interpretation of Waller’s speech this week is that his prior probability for a December cut was around 75% before the data.
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