Forex Today witnessed a quiet Asian affair, with mild risk-on prevalent amid higher Asian equities, oil prices and Treasury yields. However, the Yen defended minor bids across the board amid ongoing developments surrounding Syria while gold prices traded on the back foot. The Antipodeans lost ground and extended losses following the release of dovish RBA March meeting minutes and mixed Chinese data releases.
The Kiwi emerged the weakest in Asia while the GBP/USD pair hit the highest levels since the Brexit referendum at 1.4354 amid an upbeat outlook for wages and increasing BOE rate hike expectations.
Main topics in Asia
Mexico's Guajardo: NAFTA is progressing, but doesn't expect an announcement on Thursday
Mexico's Economy Minister, Ildefonso Guajardo Villarreal, is hitting wires with comments about the NAFTA talks progress, as well as concerns about economic activity following tariffs.
US delays fresh sanctions on Russia - Reuters
According to reporting by Reuters, Trump's administration has delayed new sanctions against Russia.
Deal with EU or no deal with EU: China tells US - Times
British trade negotiations with China will face “great uncertainties” if the nation fails to reach a Brexit deal, Beijing’s top diplomat in Brussels has warned, according to The Times.
US: Russia, Syria may tamper with Douma evidence - Reuters
As reported by Reuters, the US accused Russia of interfering with international attempts to gain access to the Douma attack site of last weekend's chemical weapons strike …
China Q1 GDP steadies at 6.8 percent y/y, beats estimates
China's YoY GDP figures for the first quarter of 2018 came in at +6.8% vs +6.7% exp and 6.8% previous, with the QoQ reading for Q1 coming in at +1.4% vs +1.5% exp and +163% last.
RBA minutes: Board agreed there was not a strong case for near-term move in policy
The minutes of the Reserve Bank of Australia (RBA) April monetary policy meeting released today showed the policymakers see little reason for a near-term move in policy.
GBP/USD hits fresh post-Brexit referendum high at 1.4354
There is no stopping the GBP/USD freight train. The currency pair rose to 1.4354 in Asia - the highest level since June 2016.
Key Focus ahead
Today’s EU macro calendar is expected to be a busy one, with the UK labor market report due on the cards at 0830 GMT. The UK’s average earnings data is expected to be closely eyed for fresh insights on the Bank of England’s (BOE) rate hike outlook. Also, in focus remains the ZEW economic sentiment surveys due out from Germany and the Eurozone, with weaker readings likely to cap the ongoing rally in the EUR.
In the NA session, the US housing data will be published alongside the Canadian manufacturing sales data. Meanwhile, the US industrial production data will drop at the same time the FOMC members William and Quarles will be making their respective speeches. Traders will also look forward to New Zealand’s (NZ) GDT price index data for fresh direction on the Kiwi ahead of Thursday’s NZ CPI release.
EUR/USD on solid ground as US Y-yield curve hits fresh 10.5-year low
The EUR/USD pair rose to 1.2395 on Monday as the spread between the US 10-year treasury yield and the 2-year treasury yield narrowed to 45.5 basis points - the lowest level since October 2007.
GBP/USD breaking new ground as it looks for 1.44 ahead of UK jobs
The focus for the London Tuesday session will be the GBP's Average Earnings being reported at 08:30 GMT. Average Earnings excluding bonuses is expected at 2.8 percent versus the previous 2.6, while earnings including bonuses is forecast at 3.0 percent compared to the previous reading of 2.8.
Geopolitical Tension Could Be Catalyst for Gold’s Rally
Technically, the long-term technical picture appears bullish and the current geopolitical turmoil could be the catalyst needed for the next leg up.
Oil prices on track for a tumble in H2 2018 - Barclays
In an interview with CNBC's "Squawk Box" late-Monday, Barclays' Head of Energy commodities research, Michael Cohen noted that he expected oil prices to remain elevated during the summer driving season, but …
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EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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