The risk sentiment in Asia took a hit and worsened further following the release of downbeat Chinese retail sales and industrial production, which intensified China slowdown fears. Across the fx board, the Kiwi suffered the most and sunk below 0.68 handle, down nearly 0.90% on the day. The Aussie followed suit and gave up the 0.72 handle to reach four-day lows at 0.7179. The Yen, on the other hand, recovered some of yesterday’s losses after the USD/JPY pair hit fresh weekly tops at 113.71. The spot kept its range just below the 113.50 level last hours. Both the EUR and the GBP remained better offered, as the dust settled over the ECB aftermath and the latest Brexit development.
Among the related markets, the Asian equities traded in the red, led by the declines in the Japanese equates. Both crude benchmarks traded weaker while gold prices on Comex traded near 1245 levels, having found some support from the risk-off action in the Asian equity markets.
Main Topics in Asia
EU's Juncker: no-deal Brexit prep details coming on December 19th
BOJ has cut purchases of JGBs maturing in 5-10 years
US recession risks on the rise - Reuters Poll
RBNZ considering raising bank capital, Kiwi falls sharply to 0.6800
China Nov data dump: Retail sales drop to 8.1%, industrial output arrive at 5.4%
Japan’s Aso: Next year’s tax reforms will limit tax hike effects
Conflicting statements from China's National Bureau of Statistics
White House to officially announce the delay in China tariff hike to March
Gold is defending 200-hour MA support amid risk-off in equities
Asian stocks down for Friday as China data weighs
Key Focus Ahead
Markets brace for a relatively busy EUR calendar that kicks-off with the second-tier German wholesale price index (WPI) due at 0700 GMT. Later on, a flurry of flash manufacturing and service PMI reports from across the Euro area will start trickling in from 0815 GMT, with the key German and Eurozone PMIs seen at 0830 GMT and 0900 GMT respectively. At 1000 GMT, the Italian CPI figures will be released alongside the Eurozone Q3 labor cost release.
The NA session expected to an eventful one, with a fresh batch of economic releases due out of the US docket. The key US retail sales will be published at 1330 GMT, followed by the industrial output and capacity utilization figures at 1415 GMT. The Markit services and manufacturing PMI reports from the US will drop in at 1445 GMT. Later in the American mid-morning, the Baker Hughes oil rigs count data will be out at 1800 GMT, wrapping the pre-FOMC week.
EUR/USD: bull-bear tug-of-war continues
The prospects of a triangle breakdown, however, would improve if the preliminary German and Eurozone PMI numbers, scheduled for release today, print below estimates, validating ECB's view that the balance of risk is moving to the downside.
GBP/USD angling bearishly below 1.2650 as Brexit rests in full view
GBP/USD is trading sluggishly just beneath the 1.2650 zone heading into Friday's London markets, and the Cable market has stalled out as traders await further moves on Brexit, with little on the data docket to cap off a volatile week.
Prime Minister May's future is in European hands
The European Union will have to decide how much to help Prime Minister May. If Brussels does not bend on the backstop May will lose the Democratic Unionists of Northern Ireland and eventually a confidence vote in Parliament.
US Retail Sales Preview: The calm before the sale
US retail sales for November, one of the key trackers of the American consumer economy, will be issued by the Census Bureau on Friday December 14 at 8:30 am EST, 13:30 GMT.
Fed to lower growth and rate increases for next year – Morgan Stanley
In the view of the analysts at Morgan Stanley, the Federal Reserve (Fed) Dec meeting is only about the rate hike plans for the next year. Markets have already priced-in a 25bps rate hike at this meeting due next week on Dec 19th at 1900 GMT.
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