Improved risk appetite offered a sigh of relief across the fx board in Asia this Wednesday, as markets shrugged-off the renewed tensions over the US-Sino trade spat. However, most majors held onto tight trading ranges, as markets took a breather ahead of the key panel discussion at the European Central Bank (ECB) Sintra Forum.
Amongst the Asia-pac currencies, the USD/JPY pair managed to take on the recovery above the 110 handle, but lacked further upside momentum amid subdued US dollar and flattening US yield curve. The Antipodeans also staged a minor comeback, with the Aussie extending its bounce from 2018 lows. The Kiwi is back above the 0.69 upside barrier, having ignored downbeat New Zealand’s current account data.
Looking at the related markets, the Asian equities attempted a tepid bounce, but the sentiment was roiled by losses in China stocks. Also, mixed trading seen in oil prices, despite a drawdown in the US crude inventories while gold prices continued to flirt near the $ 1275 support area.
Main topics in Asia
New Zealand current account deficit hit 9-year high
Stats New Zealand reported a seasonally adjusted current account deficit for the March 2018 quarter at $3 billion- the highest level since the 2008 global financial crisis.
BOJ Minutes: members ditch timeframe for achieving price target
Some Bank of Japan (BOJ) board members feel it is appropriate to ditch the timeframe for achieving the inflation target because investors are linking the timeframe to changes in the monetary policy, the minutes of the BOJ's April policy meeting revealed on Wednesday.
US treasury yield continues to flatten, could invert soon
The US Treasury yield curve continues to flatten and could invert as early as next week. The spread between the 10-year yield and the 2-year yield fell to 34 basis points today - the lowest level since August 2007.
South Korea’s Foreign Minister Kang Kyung-wha is on the wires now, via Livesquawk, commenting on the North Korean issue.
Asian stocks rebound, but Shanghai remains in the red as China equities suffer
Asian equities dipped in early Wednesday action as the US' tariffs on Chinese goods, with promises of more on the way, continued to eat away at market sentiment …
Key Focus ahead
There is nothing of note to be reported from today’s macro calendar, except for the second-tier releases in the German PPI, UK CBI industrial order expectations and US current account data. Besides, the ECB-speaks by the Governing Council members Lautenschlaeger and Coeure will be delivered at 0800 GMT and 1030 GMT respectively.
Markets look forward to the ECB Central Banking Forum held in Sintra, Portugal. The day 2 sees the top central banks’ Heads participating in a Panel Discussion on the topic – ‘Microeconomics of price and wage-setting’.
The Policy panel discussion scheduled at 1330 GMT includes:
- ECB President Draghi
- Bank of Japan (BoJ) Governor Kuroda
- Reserve Bank of Australia (RBA) Governor Lowe
- Federal Reserve (Fed) Chairman Powell
- Moderator: Stephanie Flanders, Bloomberg Economics
Following the panel discussion, the US existing home sales and EIA crude inventories report will be published, which could offer some fresh trading impetus to the NA traders, as the focus shifts towards New Zealand’s Q1 GDP figures slated for release at 2245 GMT.
EUR/USD could find bids on increased odds of treasury yield curve inversion
The EUR/USD is on the defensive, having failed to take out the bearish (falling) 5-day moving average (MA) in Asia, however, the pair may pick up a bid in Europe on fears the US treasury yield curve could invert soon.
GBP/USD continues to drip towards 1.30 with a quiet day ahead
Wednesday is another thin showing for the GBP on the economic calendar, and traders' focus will remain locked on the upcoming Bank of England (BoE) rate decision, due on Thursday at 1100 GMT, where the BoE is expected to hold off once again on a rate increase.
How to trade the US Existing Home Sales with EUR/USD
Existing Home Sales serve as an indicator for the important housing sector and it has a significant impact on markets. The Market Impact Tool shows trading opportunities in both upside and downside surprises on this event.
BOE to stand pat this Thursday - Barclays
The Barclays Research Team offers a sneak peek at what to expect from the Bank of England (BOE) ‘Super Thursday’.
OPEC Meeting: Will oil production rise and by how much?
On June 22nd and 23rd, energy ministers from the OPEC (Organization of the Petroleum Exporting Countries) and ministers from countries outside the organization will meet in Vienna to discuss future oil policy.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
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.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.