August 12, 2015 / 11:30 PM / 2 years ago

IFR Markets ForexWatch Asia Regional Daily Briefing

SYDNEY, August 13 (IFR) - Wednesday night headlines
* China "fully capable" of stabilizing Yuan (PBOC economist Ma Jun)
* Fed's Dudley: Hopefully Fed can raise rates in near future, says Fed would
reexamine policies if a financial or foreign shock lifts US unemployment; not
the case now
* Germany views 3rd Greek bailout package as insufficient (Bild)
* Greek bank bailout funds depend on business plan, stress test (Reu Exclusive)
* Greek bailout deal will be get first review in October (EU sources)
* RBA's Lowe: watching China devaluation closely, could set off chain reaction 
* Mexico's Carsten's: could act before Fed to anchor inflation expectations,
sees limited impact on Mexico from Yuan devaluation
* Moody's: main drivers of downgrade of Brazil ratings were weak economic
growth, increased government spending and a lack of political consensus
* US JOLTS Job Openings Jun +5.249m, f/c 5.300m, +5.357m-prev
* BR Retail Sales MM Jun -0.4%, f/c -0.4%, -0.80%-prev, fall for fifth month
* GB Jul Claimant Count unem chng -4.9k vs prev +0.2k rvsd. +1.5k exp
* GB Jun ILO unemployment rate 5.6% vs prev 5.6%. 5.6% exp
* GB Jun Avg wkly earnings +2.4% y/y vs prev 3.2%. +2.8% exp
* GB Jun Avg earings (ex bonus) 2.8% vs prev 2.8%. 2.8% exp
* CH Aug ZEW Investor sentiment 5.9 vs prev -5.4
* EZ Jun Ind prod -0.4% m/m, 1.2% y/y vs prev -0.4%/1.6%. -0.2%/1.5% exp
    
Macro themes in play
 Second day of CNY weakening claimed USD in broad rethink of when and how much
Fed can raise rates
 CNY end-of-day guidance up to just a 1% loss gave some hope the weakening will
be controlled, less fallout in commodities, commodity ccys, etc
 WTI brushed against Mar nadir but held, 2-yr Tsy ylds held their July 15 swing
low & US stocks rebounded midday from deep early losses
 EUR's inverse relationship with the falling DAX (-3.2%) underpinned EUR/USD,
hammered USD/CHF
 All eyes on next CNY fix & US Retail Sales Thur
    
Currency summaries provided by NY IFR/BUZZ teams
EUR/USD  
* Crosses and broad base USD sales see pair lift near 1.1155 into NY open
* Bull pressure persists in NY as UST yields slip & USD stays offered
* July high neared but not cleared as 1.1215 high set, slide then ensues
* USD takes back some losses & yields recover from lows to aid USD's bounce
* EUR/USD sees steady drop in afternoon and near 1.1150/60 support late
 
USD/JPY 
* Outside-down day in USD/JPY on China-led Fed policy pullback
* Stops taken out below 124, but still closed above 21-DMA at 124.13
* Risk rebounded midday NY, WTI held March nadir, 2s July 15 swing low yld
* 123.01 Jul 27 swing low & 122.84 (Kijun & 50% of 120.41-125.28) key props
* EUR/JPY's EUR-driven rally stalled pre 139; negative corr to DAX a key driver
* 139.23/30 next major hurdles from 76.4% & weekly Cloud base
 
GBP/USD 
* EUR/GBP moved into daily cloud, to 0.7170 after sub-f/c UK wage growth
* 0.7170 = 1mth high. Earnings +2.4% vs +2.8% f/c 
* Cross moved back to 0.7151 by sessions end
* EUR/CNH remained bid, DAX weakness moved market to cover short EUR
* GBP/USD moves to session high 1.5661 as US liftoff sentiment fell in early NY
* Cable retreated to 1.5600 by NY's end on US equity moves near flat
 
USD/CHF 
* Badly overdue rebounds in CHF vs the USD, EUR & GBP today
* Further CNH weakening led to widespread de-risking & even Fed hike doubts
* USD/CHF's fall came on a third day of struggling by 0.9900 resistance
* EUR/CHF 1.0965 peak not far from 161.8% Fibo off Apr base at 1.0991
 
USD/CAD  
* O/N range 1.3007/3158, Noram range 1.2952/3024, close 1.2994 (NY -26 pips)
* Brent crude +1.1%, WTI +0.8%, aluminum +0.65% (Sep) copper +0.7%, gold +1.3%
* AUD/CAD "unch", 0.9575, CAD/JPY +0.42%, 95.56, EUR/CAD +0.15%, 1.4500
* DXY -1.0% (all NY trading) EUR/USD lead charge (stops) AUD, CAD, NZD followed
* Oil prices +0.2/0.5% in NY, weak USD underpinned, WTI probed yesterday's lows
 
AUD/USD 
* After new trend low set massive USD sales see short covering in Europe
* Pair just above Asia's high at NY open, bull pressure persists in early NY
* Bounces in commodities and washout in US yields aid pair's lift to 0.7388 high
* USD recoups some losses in afternoon and pair slips towards 0.7365 late
* Techs a concern for bears, long lower wick on candle & RSI diverges on new low
 
NZD/USD  
* Shorts scramble in Europe on broad based USD sales, near 0.6585 into NY open
* Bounces in commodities and falling US yields help the rise
* NY applies bull pressure also as USD's slide persists, 0.6650 high set
* Greenback bounces on yield lift & USD short covers, pair near 0.6610 late
* Tech warning for bears, RSIs biased up, long lower wicks on day & mth candles
* Above 0.6740 may mean s-t bottom in, NZ Jul Business PMI due
 
LATAM 
* LatAm's wild ride continues as China's Tuesday deval wafts through markets
* USD/MXN moved steadily lower off o/n high by 16.39 to 16.1780 in early NY
* US equity marts slide lifted USD/MXN to 16.30, near unched, by NY's close
* USD/BRL moved a touch lower to 3.47 after putting in a high by 3.5050
* Weak Brazil RS & Tues' Moody's downgrade were shrugged off 
* USD/CLP ends NY 683.50, copper bounces off 6-yr low 
    
ASIAN CURRENCY OUTLOOK
 
USD/AXJ
* Messy o/n session for AXJ ccy's as CNY devaluation fallout continues
* EUR, AUD, NZD and CAD rallied hard (DXY -1.0%) but AXJ bit players in revival
* PBOC intervention late in Asia set the scene for the recovery
* But it was never plain sailing - NY in particular extremely volatile
* By day's end USD/SGD closed down 0.15%; USD/MYR set to open 3.99ish
 
USD/KRW traded an 1180.3-1195.5 range in Asia on Wednesday; last at 1190.8. The
Kospi closed down 0.55%.
 
USD/SGD traded a 1.4010-1.4165 range in Asia on Wednesday; last at 1.4106. The
Straits Times closed down 2.9%.
 
USD/MYR traded a 3.9830-4.0410 range in Asia on Wednesday; last at 4.0400. KLSE
index closed down 1.6%.
 
USD/IDR traded a 13695-13830 range in Asia on Wednesday; last at 13780. The
Jakarta interbank spot rate (JISDOR) fixed at 13541. The IDX Composite index
closed down 3.1%.
 
USD/PHP traded a 46.00-33 range in Asia on Wednesday; last at 46.26. The PSE
index closed down 1.0%.
 
USD/THB traded a 35.345-57 range in Asia on Wednesday; last at 35.37. Thai Set
closed down 0.8%.
 
USD/TWD traded a 31.98-32.27 range in Asia on Wednesday; last at 32.27. The
Taiex closed down 1.6%.
 
USD/CNY was set in Asia on Wednesday at 6.3306, 1.6% higher than the previous
6.2298 fix as the PBOC stays true to its word and (nearly) matches Tuesday's
closing level. OTC USD/CNY traded a 6.3740-6.4510 range; last at 6.3870. OTC
USD/CNH last at 6.5290; range 6.3850-6.5945. The 1-yr NDF was last quoted in
Asia at 6.6100-6.6400. The Shanghai Composite closed down 1.0%. The property sub
sector closed up 0.4%. 
 
USD/INR traded a 64.55-945 range in Asia on Wednesday; last at 64.81. The Sensex
closed down 1.27%.
    
Looking ahead - economic data (GMT)
13 Aug 22:30 NZ Manufacturing PM 
13 Aug 22:45 NZ Food Price Index 
13 Aug 23:50 JP Machinery Orders 
13 Aug KR Trade Balance Revised 
13 Aug KR Bank of Korea Base Rate  
13 Aug KR Import Growth Revised 
13 Aug KR Export Growth Revised 
13 Aug 04:00 MY Current Account Balance 
13 Aug 04:00 MY Net Portfolio Flow 
13 Aug 04:00 MY GDP
   
Looking ahead - events, other releases (GMT)
Nil
    
OVERNIGHT TRADED RANGES--------------- INTRADAY RANGES -- Close 2100GMT
NDFS OPEN   HIGH   LOW     LAST        CURRENCY   HIGH     LOW    CLOSE
IDR  14000  14125  13990   14020-14100 USD/JPY   125.28  123.79  124.21
INR  65.22  65.38  65.05   65.31-33    EUR/USD   1.1215  1.1024  1.1158 
KRW  1184.5 1182   1172.5  1174.5-75.5 EUR/JPY   138.86  138.04  138.61
MYR  4.0700 4.0690 4.0130  4.0200-50   GBP/USD   1.5661  1.5535  1.5615
PHP  46.51  46.55  46.35   46.53-58    USD/CAD   1.3158  1.2952  1.2979
TWD  32.32  32.45  32.20   32.28-32    AUD/USD   0.7388  0.7217  0.7379
CNY  1-mth  6.5650 6.5050  6.5080-180  NZD/USD   0.6650  0.6468  0.6621
CNY  6-mth  No     Trades  6.5600-800  USD/SGD   1.4165  1.3986  1.3986
CNY  1-yr   Dealt  6.6350  6.6000-200  USD/THB    35.57   35.17   35.25 
 
Equities  Close   Change  %Change  UST(Yields)    Close    Previous
DJIA      17403        0    +0.00  10-year        2.15%       2.14%
S&P 500    2086       +2    +0.01  2-year         0.67%      0.675%
NASDAQ     5044       +7    +0.14  30-year        2.84%       2.81%
FTSE       6571      -94    -1.40  Spot Gold($) 1123.80     1108.90
DAX       10925     -369    -3.26  Nymex          43.37       43.08
Nikkei    20393     -328    -1.58  Brent          49.75       49.38
     
    

 (Reporting by Peter Whitley)

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