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IFR Markets ForexWatch Asia Regional Daily Briefing
October 15, 2015 / 11:54 PM / 2 years ago

IFR Markets ForexWatch Asia Regional Daily Briefing

SYDNEY, Oct 16(IFR) - Market briefs
 U.S. jobless claims revisit 42-year lows, claims fell 7k to SA 255k
 U.S. CPI falls 0.2% on cheaper gasoline, but core +0.2%; US real avg weekly
earnings -0.2 v +0.4 prev
 Yields rise after U.S. data supports view of earlier Fed rate hike 
 Fed's Dudley downplays divisions at Fed, says policymakers on same page
 Fed's Dudley would favor Dec. hike if econ meets his f/c, says recent econ
news suggest econ slowing; confident tightening job market to lead to inflation
 Treasury's Lew says U.S. will hit debt ceiling no later than Nov. 3 
 Fitch cuts Brazil rating to 'BBB-", says investment grade at risk
 China's Premier Li says economy remains within reasonable range - state TV
 Nowotny easing talk nudges euro lower - RTRS
    
Macro themes in play
 EUR the big loser o/n after EUR/USD failed to clear 1.15 & on ECB jawboning;
USD made a fleeting, half-hearted comeback after CPI & Claims revived some Fed
tightening fear, though not much - Philly soft
 Dudley confirmed Fed's in the same data-dependent quagmire as the markets; was
enough to lift stocks and risk, with EM/resource ccys doing well; even BRL after
Fitch's move toward a junk rating
 Tsy yields rebound from recent hard fall; stocks up; oil flat
Overnight currency summaries prepared by NY IFR/BUZZ teams
EUR/USD  
 Pressured in Europe's morning after new high set, Nowotny comments weigh
 Slide sees pair near 1.1445 ahead of key US CPI & claims data
 CPI above f/c & claims well below estimates, USD & UST yields rally
 DE-US spread widen & EUR/USD dives further, sharp drop sees 1.1363 low
 USD gives back some gains; test hourly res near 1.1420/30 but can't clear it
 Slide ensues, near 1.1380 late, daily techs a warning for bulls
 EZ Sep CPI, US Sep IP & Oct U. of Mich the data risks tomorrow
    
EUR/USD  
 Pressured in Europe's morning after new high set, Nowotny comments weigh
 Slide sees pair near 1.1445 ahead of key US CPI & claims data
 CPI above f/c & claims well below estimates, USD & UST yields rally
 DE-US spread widen & EUR/USD dives further, sharp drop sees 1.1363 low
 USD gives back some gains; test hourly res near 1.1420/30 but can't clear it
 Slide ensues, near 1.1380 late, daily techs a warning for bulls
 EZ Sep CPI, US Sep IP & Oct U. of Mich the data risks tomorrow
 
USD/JPY 
 Large 118 barrier finally stopped the USD/JPY rot w help from good US data
 Claims & CPI data were robust enough to revive some Fed hike fear
 Dudley affirmed heightening data dependency; to tighten if expectations met
 Rebound fm 118.07 low runs into offers in 118.70s; 55-WMA key at 119.44
 Importers, Insurers, pensions & FDI flows are USD/JPY supportive
 But the pair's heavy w/o BOJ QQE3 and/or the Fed finally tightening
 EUR/JPY's plunge held above the 61.8% at 134.69 
 Commodity crosses up on better risk appetite
 Weekly Investment flows in & out of Japan are due tonight
 
GBP/USD 
 Offers above 1.5500 capped European AM gains after fresh USD selling
 USD rally after US claims/CPI beat shortlived as polls see UK hike in Q1 '16
 Real wkly earnings miss, Dudley cites strong USD & inventories for econ woes
 More offers touted 1.5525-30. 1.5527 Sept 22 hi, upper 21-d Bolli 1.5590 caps
 EUR/GBP dropped to 0.7377 on dovish Nowotny steer, lower still after Dudley
 Nowotny says new measures needed to boost inflation 
 ECB monetary policy meeting next week. 0.7423 = early Europe high
 
USD/CHF 
 Wed's USD/CHF plunge below the Sep low & 200-DMA saw ltd follow-thru
 Claims, CPI data were robust enough to shake of some steady-Fed fears
 61.8% of the rebound fm Aug's low at 0.9482 pierced, but not closed below
 Dudley affirms heightening data dependency; IP, CU & UofM out Friday
 EUR/CHF tumbled to 1.0820, a tick above the up TL off Jun-Jul lows
 ECB jawboning read as easing bias & 1.15 capping EUR/USD were factors
 
USD/CAD  
 Pressured in Europe's morning on broad USD weakness & commodity lifts
 Just above 1.2880 into NY open, bull pressure applied in early NY
 Above f/c CPI & better claims data reverse USD bear pressure
 USD/CAD spikes near 1.2950 & daily cloud base but gains fade
 USD bid fades & commodities rally, pair slips back below 100-DMA
 Slide extends, 7/29 low & 38.2 Fib of May-Sep lift pierced, near 1.2835 late
 Tech lean bearish, RSI biased down & pair closes below the cloud & 100-DMA
 
AUD/USD  
 Bull pressure in Europe sees near 0.7365; pulls back near 0.7345 into NY
 US data is upbeat, USD 7 UST yields rally, pair sees sharp dive to 0.7266 low
 Losses erode as USD bears emerge and commodities rebound
 Pair holds just below day's low late in the day
 Techs lean bullish, RSIs biased up & pair holds above cloud & 10-DMA
 
NZD/USD  
 Bulls run persists in Europe, stop run above 0.6850 sees 0.6900 neared
 Pullback into NY open has pair near 0.6875, dip extends in early NY
 US data sends pair sharply lower to hourly support near 0.6805/15
 Dip gets bought and pair lingers in 0.6855/75 range for rest of NY
 Techs bullish, RSIs biased up, run to 0.7025/35 res & 200-DMA likely
 NZ Q3 CPI the risk in Asia, if weak recent rally is in danger
 
LATAM 
 USD/MXN offered as Fed liftoff outlook pushed out, despite claims/CPI beat
 Move below daily cloud base puts bears in control
 USD/MXN ending NY by 16.3400 near session low 16.3260
 USD/BRL moved to session high by 3.8750 after Fitch cut Brazil rating to
'BBB-* Dudley comments on weak economy, pushed USD near flat into NY close
 USD/CLP end NY by low 674, copper rallied, waits for BCCh on rates no chg exp
    
Broad-based USD weakness on Fed lift-off delay
The broad-based USD slide has continued with EUR/USD coming close to breaking
1.15 today, though ECB's Nowotny & US jobless claims have knocked it lower.
While CAD has lagged (3.2% gains), commodity currencies of NZD (7.1%), NOK
(5.6%) and AUD (4.4%) have led the way on majors. Given the bottoming out of
oil/commodity prices, the gains on commodity-related currencies in G10 space is
understandable. USD move has fundamental backing via Fed lift-off expectations
being pushed into 2016. Even 2016 is proving uncertain as the Fed openly debates
the merits of pre-emptive tightening based on the Phillips curve. Lift-off odds
at the March FOMC meeting are seen as 50/50 - a far cry from a few months ago
when the Dec FOMC was seen as 50/50. The USD bull trend will re-establish itself
but only after the pain trade has run its course with the risk that more USD
longs are forced to cut/trim their positions first. Full comment 
ASIAN CURRENCY OUTLOOK
 
USD/AXJ
* USD/AXJ ends slightly mixed in NY from the Asian session close
* Major pairs cop a buffering as big flows cause air pockets in prices
* Dovish ECB saw the single ccy retract sharply from near 1.15 to 1.1463
* Solid US data pared wholesale dumping of the USD but no confidence in '15 hike
* Commodity ccy's and EM out performed on day - no surprise given positioning
 
Asia session USD/AXJ complex closes
USD/KRW traded an 1129.9-1139.2 range in Asia on Thursday; last at 1130.2. The
Kospi closed up 1.2%.
 
USD/SGD traded a 1.3727-1.3829 range in Asia on Thursday; last at 1.3761.
Straits Times closed up 1.05%.
 
USD/MYR traded a 4.1015-4.1350 range in Asia on Thursday; last at 4.1160. The
KLSE index closed up 0.1%.
 
USD/IDR traded a 13250-13470 range in Asia on Thursday; last at 13470. The IDX
composite index closed up 0.5%.
 
USD/PHP traded a 45.73-87 range in Asia on Thursday; last at 45.85. The PSE
index closed up 1.7%.
 
USD/THB traded a 35.15-27 range in Asia on Thursday; last at 35.19. Thai Set
closed up 1.4%.
 
USD/TWD traded a 32.217-409 range in Asia on Thursday; last at 32.22. The Taiex
closed up 0.9%.
 
USD/CNY was set in Asia on Thursday at 6.3402 slightly lower than the previous
6.3408 fix. OTC USD/CNY traded a 6.3406-6.3479 range; last at 6.3460. OTC
USD/CNH last at 6.3469; range 6.3390-6.3480. The 1-yr NDF was last quoted in
Asia at 6.4990-6.5030. The Shanghai Composite closed up 2.3%. The property sub
sector closed up 2.1%.
 
USD/INR traded a 64.715-875 range in Asia on Thursday; last at 64.82. The Sensex
closed up 0.85%.
 
OVERNIGHT TRADED RANGES--------------- INTRADAY RANGES -- Close 2100GMT
NDFS OPEN   HIGH   LOW     LAST        CURRENCY   HIGH     LOW    CLOSE
IDR  13585  13630  13590   13610-13640 USD/JPY   119.17  118.06  118.90
INR  65.05  65.07  65.00   65.04-06    EUR/USD   1.1495  1.1363  1.1393 
KRW  1123.5 1126.4 1122.5  1124.5-25.5 EUR/JPY   136.73  134.80  135.25
MYR  4.1130 4.1410 4.1100  4.1030-70   GBP/USD   1.5508  1.5415  1.5435
PHP  45.87  45.91  45.85   45.88-93    USD/CAD   1.2948  1.2832  1.2864
TWD  32.05  32.03  31.86   31.84-87    AUD/USD   0.7363  0.7266  0.7325
CNY  1-mth  6.3620 6.3580  6.3600-30   NZD/USD   0.6897  0.6788  0.6850
CNY  6-mth  Dealt  6.4350  6.4340-80   USD/SGD   1.3829  1.3727  1.3773
CNY  1-yr   No     Trades  6.4940-80   USD/THB    35.27   35.14   35.19 
 
Equities  Close   Change  %Change  UST(Yields)    Close    Previous
DJIA      17142     +217    +1.28  10-year        2.02%      1.975%
S&P 500    2024      +30    +1.49  2-year         0.60%       0.55%
NASDAQ     4870      +87    +1.82  30-year       2.865%      2.835%
FTSE       6339      +69    +1.11  Spot Gold($) 1182.80     1186.70
DAX       10065     +149    +1.50  Nymex          46.90       46.21
Nikkei    18097     +206    +1.15  Brent          48.70       48.98
    
    
 
 
     
    
        

 (Reporting by Peter Whitley)

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