FX Today: Antipodeans slip amid fresh US-China trade talks; UK wages, German ZEW eyed


The Antipodeans were on the receiving end in Tuesday’s Asian trading, having faced a double whammy from broad US dollar comeback and mild risk-aversion, fuelled by the news of fresh US-China trade talks scheduled later this week. Meanwhile, the Aussie’s decline was accentuated by the February RBA minutes that underscored rising risks on the Australian economic outlook. The USD/JPY pair, on the other hand, witnessed good two-way business, having fallen to mid-110s before a quick comeback to the multi-day tops near 110.70 levels. Meanwhile, the Euro and the pound traded under pressure amid weaker fundamentals and looming Brexit risks.

Among the related markets, the Asian equity markets traded on a cautious footing, unable to pick a clear direction amid growth and trade concerns. Meanwhile, both crude benchmarks traded mixed, with WTI off 2019-month tops, but keeps the 56 handle while Brent oil hovered below 66.50 levels. Gold prices on Comex corrected lower from YTD highs of 1330.75, looking for fresh directives from US-China trade-related updates.

Main Topics in Asia

Gold Technical Analysis: $1328 questions 2019 high, $1322 offers immediate support

RBA minutes: “Significant uncertainties” on the economic outlook

China's Vice Premier to visit Washington to continue trade talks

White House Press Sec Sanders: US-China trade talks will start again on February 19th

Japan’s Motegi does see some risks in the economic outlook due to China's slowdown

China’s Vice Premier Han: China needs tax cuts to relieve pressure on economy

UK manufacturers warn of 'catastrophic' no-deal Brexit - Reuters

BoJ’s Kuroda: Various steps available if BoJ needs to ease more

Goldman Sachs: Longest US economic recovery in history

Key Focus Ahead

Markets buckle up for an eventful EUR macro calendar today, with the UK labor market report due at 0930 GMT to headline. The main focus will be on the wage growth figures that are likely to accelerate in the month of December. Ahead of the UK jobs data, the Swiss trade data and Eurozone current account numbers will be reported at 0700 GMT and 0900 GMT respectively. At 1000 GMT, Eurozone December construction output data will be released alongside the German February ZEW survey of current situation and expectations that is likely to have some bearing on the EUR trades.

In contrast, the NA calendar remains light, with no first-tier macro news from the US and Canada while New Zealand will see the fortnightly GDT price index report due around 1400 GMT. Amid a lack of significant economic releases, the developments around the US-China trade talks will remain the main market driver. Later in the American session, the API weekly crude stocks data will drop in at 2130 GMT just ahead of New Zealand’s producers’ price index (PPI) release at 2145 GMT.

Euro risks downside amid potential US auto tariffs, Euro area growth concerns – Goldman Sachs

Analysts at Goldman Sachs are out with their view on the Euro, given the looming economic and trade risks.

GBP/USD witnesses pullback to 1.2900 before UK employment report

Coming up in the Pound traders’ radar will be the December month unemployment rate and average earnings index 3m/y, coupled with claimant count change for January, all of which will be key to determine near-term GBP/USD moves.

UK Labor market Preview: UK wages set to rise strongly in support of inflation and Sterling

The UK regular pay excluding bonuses is expected to accelerate to 3.4% over the year while total pay is seen up 3.5% y/y in three months to December.

EUR/GBP: 3 reasons to rise and the big levels to watch

Euro/pound, aka the "Brexit cross" has been remarkably stable as Brexit nears. But such limited movement does not last for to long and big breakouts usually follow.

GMT
Event
Vol.
Actual
Consensus
Previous
Monday, Feb 18
24h
 
 
Tuesday, Feb 19
07:00
 
 
16,849M
07:00
 
2.24M
1,897.00M
07:00
 
 
14,952M
09:00
 
€30.9B
€20.3B
09:00
 
€36.2B
€23.2B
09:30
 
2.4K
20.8K
09:30
 
4%
4%
09:30
 
3.5%
3.4%
09:30
 
 
2.8%
09:30
 
3.4%
3.3%
10:00
 
-13.4
-15.0
10:00
 
20.0
27.6
10:00
 
-0.50%
-0.09%
10:00
 
2.1%
0.9%
10:00
 
-18.2
-20.9
n/a
 
 
6.7%
15:00
 
59
58
15:00
 
 
16:30
 
 
2.45%
16:30
 
 
2.4%
20:30
 
 
$-4.6K
20:30
 
 
$74.1K
20:30
 
 
334.9K
20:30
 
 
£-52.1K
20:30
 
 
¥-39.7K

 

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