October 15, 2015 / 1:25 AM / 2 years ago

IFR Markets ForexWatch Asia Regional Daily Briefing

SYDNEY, Oct 15(IFR) - Market briefs
 Dollar, UST yields fall as weak U.S., Chinese data cloud Fed rate hike outlook
 GBP sees biggest gain in 5 months after UK jobs boost, despite weak earnings
 U.S. retail sales barely rise, hit by lower gasoline receipts, auto purch rise
 U.S. business inventories unchanged for second straight month, sales fall
 Beige Book suggests more uneven growth in Aug-Oct (NY Fed)
 UK jobless rate hits 7-yr low, Pay growth not as strong as expected, GBP rises
 
Macro themes in play
* Dollar down hard on Retail Sales, PPI miss; markets conclude Tarullo, Brainard
views make for high bar on '15 Fed rate hike consensus; STIR futures new highs
* USD lowest close vs EUR, JPY since August; GBP outperforms despite wages miss
* Commodity/EM FX up but conflicted, wary of broader risk selloff; Gold cruises
through 200-dma
* Stocks down as markets doubt ECB, BOJ bull market rescue
    
Overnight currency summaries prepared by NY IFR/BUZZ teams
EUR/USD 
 Sharp lift to 1.1427 in Europe, choppy slide sees near 1.1405 into NY 
 Dips to 1.1392 early but buyers emerge &pair bounces toward open level 
 US ret sales & PPI miss see DE_US spread tighten, Fed hike chances lessen 
 EUR/USD nears 1.1450 then chops around 1.1410/48 until late in the day 
 Fed's beige book gives no fodder for USD bulls, broad USD sales ensue 
 Stops above Sep high run and pair probes 1.1480/00 area late in the day 
 US CPI and jobless claims the big data risks tomorrow 
 
USD/JPY
 Weak China CPI & US Retail Sales are shaking USD/JPY dn out of its range 
 Now threatening the lowest close since the Aug 24 collapse day's 118.41 
 US data & Beige Book reinforce the notion the Fed can't hike this year 
 Sub 119 close to chase off spec dip buyers; RM & BOJ needed to fill void 
 Kuroda's been against QQE3, but odds of ease at Oct 30 meet are improving 
 Sep low at 118.60 & weekly Cloud top at 118.70 next week are next props 
 61.8% of the late Aug rebound & the Aug 25 low at 118.29/25 after that 
 AUD/JPY rebounds by Cloud base & Tenkan 
 GBP/JPY back up by 50% Fibo & Kijun at 184.36 
 Japan IP and CU out Thursday 
 
GBP/USD
 Cable soared to 1.5372 from a post-UK earnings miss low of 1.5285 
 Influenced by UK ILO jobless rate fall & employment rate rise to 73.6% 
 Higher after recent res by daily kijun (1.5383) breached on weak US PPI/RS 
 US liftoff seen delayed to Q1'16 near exp'd UK liftoff, AB/SAB adds to bid 
 EUR/GBP falls fm 0.7477 hi after UK earnings, ends NY session lows 0.7415 
 
USD/CHF
 Risk-off flow sank USD/CHF after weak China CPI & US Retail Sales  
 Swiss ZEW improved to 18.3 from 9.7; German ZEW missed on Tues 
 USD/CHF broke the Sep low & 200-DMA c0.9527, triggering sell stops 
 Little support between today's sub 0.9500 low and the Aug low at 0.9260 
 EUR/CHF back at lower end of dull 3-week range; Cloud top 1.0852 on Thurs 
 
USD/CAD  
 CAD up on broad USD beating but still wary of wobbly risk climate 
 US STIR re-pricing lower the big news 
 US-Can rate diff narrows sharply; last time 2yr spreads here USDCAD 1.26 
 Oil steady, quiet; not a factor 
 
AUD/USD  
 Lift from Asia's low persists in Europe's morning, near 0.7245 in early NY 
 Bought aggressively early after US sale & PPI data are below f/c 
 0.7290 pierced but gains fade as risk sours & JPY strengthens 
 AUD/JPY sinks from 87.00 to sub-86.30 while USD broadly offered 
 AUD/USD buffeted by those factors and lingers near 0.7270 for most of NY 
 Oz Sep jobs due, if solid recent AUD/USD lift likely resumes, 0.74-75 eyed 
 
NZD/USD  
* Sharp spike up in Europe's morning as shorts hit exit button
* NY opens near 0.6725, bull pressure early on US retail sales & PPI miss
* Pair lifts above 0.6790, pulls back & linger near 0.6770 for most of session
* Late day broad based USD dive sees pair set a new s-t trend high
* NZ Sep PMI & OZ Sep jobs data the risks in Asia
* Bullish outside candle, rising RSIs favor bulls; 0.6810/15 is key s-t res
* A break & hold above suggests a bigger short squeeze is due
 
LATAM
 USD/MXN shrugged off early CN-related weakness moved off highs by 16.6630 
 Weak US PPI/RS lifts USTs, 10-yr yield blw 2%, US liftoff now seen Q1 '16 
 USD/BRL reverses gains on weak US data, Fed delay buys Brazil time  
 Levy says measures to adjust finances yielded results, Weak CCY helps
 USD/CLP ends NY 681; copper rallies 1.36% despite spate of weak China data 
 Chile MPC Thursday, traders tipped to 25bp hike 
    
Fed lift-off likely to wait until 2016 as splits emerge
The somewhat surprising speeches from Fed Govs Brainard and Tarullo
 this week revealed not just resistance to lift-off happening
this year, but also a push-back against the more traditional Phillips Curve view
of the world. That suggests that lift-off will almost certainly be a 2016 affair
unless Yellen & Fischer really want to force a decision that could involve a
handful of dissents. In essence, Brainard argues that the US economy faces many
risks and a stronger labour market feeding into inflation (NAIRU being
surpassed) is far from certain near-term. That goes against the argument Yellen
has used, even just 3 weeks ago, to say the Fed should start the process of
raising rates later this year. While the debate is a healthy one -- the
disconnect between the labour market, wages and inflation is fairly clear in the
US, while lowflation permeates much of the world -- it also adds to the
confusion on the Fed policy outlook. Brainard speech 1.usa.gov/1Gd9gZL
ASIAN CURRENCY OUTLOOK
USD/AXJ
* USD/AXJ complex set to open Thursday sharply lower after a poor night for USD
* What started last week stepped up a notch o/n as players dump USD across board
* Market is now re-pricing for a March 2016 US rate lift-off
* JPY and EUR strength weighed on stocks due to the high correlation
* Weak USD move is only early stages - cld see couple of months of AXJ strength
 
Asia session USD/AXJ complex closes
USD/KRW traded an 1145.4-1155 range in Asia on Wednesday; last at 1146.8. The
Kospi closed down 0.47%.
 
USD/SGD traded a 1.3855-1.4055 range in Asia on Wednesday; last at 1.3874.
Straits Times closed down 0.0%.
 
USD/MYR Malaysian markets closed Wednesday for a public holiday.
 
USD/IDR Indonesian markets closed Wednesday for a public holiday.
 
USD/PHP traded a 45.97-46.19 range in Asia on Wednesday; last at 46.00. The PSE
index closed down 1.25%.
 
USD/THB traded a 35.395-67 range in Asia on Wednesday; last at 35.49. Thai Set
closed down 0.1%.
 
USD/TWD traded a 32.456-619 range in Asia on Wednesday; last at 32.48. The Taiex
closed down 0.5%.
 
USD/CNY was set in Asia on Wednesday at 6.3408 sharply higher than the previous
6.3231 fix. OTC USD/CNY traded a 6.3425-6.3482 range; last at 6.3477. OTC
USD/CNH last at 6.3511; range 6.3410-6.3532. The 1-yr NDF was last quoted in
Asia at 6.5040-6.5070. The Shanghai Composite closed down 0.95%. The property
sub sector closed down 1.15%.
 
USD/INR traded a 65.00-65.18 range in Asia on Wednesday; last at 65.05. The
Sensex closed down 0.25%.
 
OVERNIGHT TRADED RANGES--------------- INTRADAY RANGES -- Close 2100GMT 
NDFS OPEN   HIGH   LOW     LAST        CURRENCY   HIGH     LOW    CLOSE
IDR  13825  13800  13700   13650-13670 USD/JPY   119.80  118.61  118.86
INR  65.36  65.52  65.08   65.07-12    EUR/USD   1.1489  1.1377  1.1474 
KRW  1146.5 1148.5 1137    1138.5-39.5 EUR/JPY   136.63  136.16  136.34
MYR  4.1880 4.2140 4.1525  4.1470-20   GBP/USD   1.5495  1.5250  1.5478
PHP  46.06  46.04  45.95   45.93-96    USD/CAD   1.3040  1.2912  1.2937
TWD  32.47  32.50  32.26   32.30-32    AUD/USD   0.7318  0.7199  0.7301
CNY  1-mth  6.3650 6.3610  6.3580-10   NZD/USD   0.6813  0.6619  0.6788
CNY  6-mth  No     Trades  6.4380-30   USD/SGD   1.4055  1.3767  1.3788
CNY  1-yr   No     Trades  6.4960-10   USD/THB    35.67   35.25  35.275 
 
Equities  Close   Change  %Change  UST(Yields)    Close    Previous
DJIA      16925     -157    -0.92  10-year       1.975%      2.045%
S&P 500    1994       -9    -0.47  2-year         0.55%       0.62%
NASDAQ     4783      -14    -0.28  30-year       2.835%      2.885%
FTSE       6270      -72    -1.14  Spot Gold($) 1186.70     1167.90
DAX        9916     -117    -1.16  Nymex          46.21       46.57
Nikkei    17891     -344    -1.89  Brent          48.98       49.20
    
    
    
  
    
    

 (Reporting by Peter Whitley)

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