Forex today witnessed listless trading in Asia on the final trading day of the week, with most majors stuck in tight ranges, as the dust settles over the dismal US CPI aftermath. The US dollar consolidated the corrective slide from multi-month tops amid a lack of fresh catalysts.
The USD/JPY pair hovered near the midpoint of the 109 handle while the Aussie traded well above the 0.75 handle. Meanwhile, the NZD/USD pair found some support from upbeat Business New Zealand manufacturing index, as oil prices traded flat after yesterday’s extensive rally. The Asian stock markets edged higher as softer US inflation offered some relief to the corporate world, as they fretted over rising borrowing costs.
Main topics in Asia
US diplomats have to impose Iran oil curbs at home - Reuters
As reported by Reuters, a small department within the US government, the Bureau of Energy Resources, is now responsible for convincing US companies and foreign governments with cutting imports of Iranian crude oil following the restoration of sanctions against Iran.
RBNZ's Orr: NZD decline a "good thing"
The Reserve Bank of New Zealand's Governor, Adrian Orr, has continued his commentary today following Thursday's dovish showing from the New Zealand central bank.
US yield curve flattest since 2007 as long duration treasuries soared after weak inflation
The spread between the US 10-year treasury yield and the 2-year yield, also known as the yield curve, has dropped to 42.79 basis points - the flattest since 2007.
Asia stocks rally on tempered inflation, Japan's Nikkei 225 into ¥22,650
Japan's Nikkei 225 index is up 0.7%, touching into 22,650.00 in early Friday trading as Asia equities rally following a missed inflation reading for the US.
China’s Commerce Ministry: They are in a mutually beneficial oil trade with Iran
China’s Commerce Ministry (MOFCOM) is out with the latest headlines, via Reuters, stating that they are in a mutually beneficial oil trade with Iran.
Key Focus ahead
Looking ahead, the EUR calendar also remains quite light, with no first-tier macro releases on the cards and hence, attention turns towards the NA session. We have the key Canadian employment data alongside the US import prices, which will be followed by the US prelim UoM consumer sentiment data release. Also, speeches by the Bank of Canada (BOC) policymaker Wilkins and European Central Bank (ECB) President Draghi will also hog the limelight later tonight.
Further, the trade talks between the US and Chinese official later today in Washington will be also closely eyed for fresh insights, in the wake of the Sino-US trade dispute.
EUR/USD: Not out of the woods yet
The EUR created a doji candle on May 9, signaling indecision or bearish exhaustion and posted gains yesterday, confirming a short-term bullish doji reversal. However, Italian political risks could still play spoilsport.
GBP/USD back into 1.35 on the wings of a dovish BoE
Friday is a quiet showing for the Sterling with little on the economic calendar, though the US session will be bringing trade figures with the Export and Import Price Indexes at 12:30 GMT.
US Treasury Official: US, Chinese officials to meet Friday, discuss trade, Liu visit
Reuters quoted a US Treasury official on Friday, as saying that the US and Chinese officials are likely to meet in Washington today to discuss trade disputes between the world’s two largest economies.
Oil prices to reach $ 100 in 2019 – BAML
Bank of America Merrill Lynch (BAML) analysts believe that oil prices are likely to extend their bullish momentum into the next year while expecting the commodity to hit $ 100/ barrel …
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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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