Risk-off sentiment extended into Asia and emerged the key theme across the fx board, boosting the demand for the safe-havens Yen, CHF, and gold at the expense of the risk assets such as the equities, oil, GBP, and Antipodeans. The risk-averse market condition is mainly driven by oil-price sell-off after the IEA slashed the global demand growth forecasts for 2017, 2018 a day before.
Amongst the fx space, the Aussie was the biggest loser, despite persisting broad-based US dollar weakness, as downbeat Aus wages data and risk-aversion weighed heavily. Meanwhile, the Yen was the top gainer on the back of the Japanese growth story and safe-haven flows, as the Nikkei 225 index slumps -1.30%.
Main topics in Asia
Japan's GDP grows for seventh straight quarter as exports outperform
The Japanese economy is witnessing the longest period of uninterrupted growth in more than a decade on the back of strong export growth.
Australia Wage Price Index (QoQ) below expectations (0.7%) in 3Q: Actual (0.5%)
Oil leads the risk-off, IEA trimmed demand forecast
Oil is leading the risk-off action; currently down 1 percent on fears that rising US output and weak demand growth would keep the market oversupplied in 2018.
China Xi's special envoy to visit N. Korea from Nov 17th - Xinhua
China’s official news agency, Xinhua, reported earlier today that the Chinese President Xi Jinping's special envoy will visit North Korea from November 17.
Key Focus ahead
Heading into Europe, markets look forward to the RBA Assistant Governor Ellis speech, followed by the FOMC member Evans’ speech. On the data front, the UK jobs report is likely to be the main risk event in Europe today. Also, on the cards will be the second-liner Eurozone trade balance data, which is expected to have virtually no impact on the markets.
Moving on, the BOE MPC member Broadbent is due to speak about Brexit and interest rates at the London School of Economics ahead of the US open, while the key US CPI and retail sales data will be reported soon after. The US traders will also await the regional manufacturing index and business inventories data for some impetus. Meanwhile, the US EIA crude stockpiles report will wrap a busy Wednesday.
GBP/USD in a holding pattern ahead of UK labor data, yield spread topped out?
Cable's drop below 1.31 levels yesterday was short-lived, courtesy of the broad-based USD weakness, still, the area around 1.3180 proved a tough nut to crack.
EUR/USD in a phase of consolidation near 1.1800 ahead US CPI
The EUR/USD pair extends its overnight consolidative mode near three-week tops into Asia, as the bulls await the key US macro releases for the next push higher.
US CPI / retail sales preview - Nomura
Analysts at Nomura explained their outlook for the key US events ahead today in CPI and retails sales.
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