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IFR Markets ForexWatch Asia Regional Daily Briefing
February 5, 2015 / 11:19 PM / 3 years ago

IFR Markets ForexWatch Asia Regional Daily Briefing

SYDNEY, Feb 6 (IFR) - Headlines from Thursday night
* BOE keeps key rate & APP steady, as expected; no statement after decision
* Denmark (DNB) cuts rate, for fourth time in 3 weeks, to -0.75 pct
* ECB agreed up to EUR 60bln in ELA funding for Greece (Die Welt)
* ECB's Praet has been disappointed by volumes on TLTRO's; probably most of the
year will be negative on inflation
* ECB's Nowotny says new waiver for Greek debt thinkable if Greece agrees on
bailout program
* Greek PM Tsipras said his new government would not renege on its promises and
that voters would not be deceived again, said we managed to deconstruct the
European status quo that wants more austerity & less democracy
* Greek CB's Stournaras says ECB collateral decision can be taken back if there
is a deal w/EU partners
* Greece's Varoufakis says will do everything in our power to avoid default,
told German FinMin he has potential partner in new Greek government
* German EconMin - there can be no Greek debt haircut & no money w/o reform
* Schaeuble says Greece must work with IMF, ECB & EC; Greece belongs in EZ
* US Challenger Layoffs Jan 53.041k, 32.640k-prev
* US International Trade MM Dec -46.56b, f/c -38.0b, -39.75b-prev
* US Initial Jobless Claims w/e 278k, f/c 290k, 267k-prev
* US Jobless Claims 4-Wk Avg w/e 292.75k, 299.25k-prev
* US Continued Jobless Claims w/e 2.400m, f/c 2.395m, 2.394m-prev
* US Labor Costs Prelim Q4 2.7%, f/c 1%, -2.30%-prev
* US Productivity Prelim Q4 -1.8%, f/c 0.5%, 3.70%-prev
* CA Trade Balance CAD Dec -0.65b, f/c -1.20b, -0.34b-prev
* CA Exports CAD Dec 44.06b, f/c 42.90b, 43.38b-prev
* CA Imports CAD Dec 44.70b, f/c 44.20b, 43.72b-prev
* Mkt talk SNB active in the cross again, pulls EUR higher generally
* ECB lifts waiver on cr rating needs for Greek bonds - Rtrs
* ECB no impact on counterparty status of Greek financials - Rtrs
* ECB renews emergency liquidity line for Greek banks - Rtrs
* Greece govt: ECB has raised cap on emergency funding by E10bln
* Fed Rosengren: Policy of patience on U.S int rates is appropriate  
* GB Jan Halifax house prices 2.0% m/m vs prev 1.1% rvsd
* CH Q1 Consumer confidence -6 vs prev -11
* DE Dec Ind orders 4.2% vs prev -2.4%. 1.5% exp
 
    Currency Summaries provided by IFR/BUZZ NY desk
EUR/USD saw short covering in Europe test the 1.1450/60 resistance zone but be
unable to break it. The ensuing dip had it near 1.1425 into NY's open. Early
action saw the slide deepen towards 1.1390 after weekly jobless claims came in
much better than f/c. The dip was bought though and a steady ascent towards
Europe's high took hold. The zone held several tests but the dips became more
and more shallow. Headlines from Greek's CB Gov Stournaras noted the ECB
collateral decision can be taken back if a deal is reached with EU partners
buoyed risk sentiment. JPY weakened drastically and EUR/JPY rallied near 135.15.
EUR/USD went along for the ride and ran stops above 1.1460. A quick spike took
hold and 1.1499 was hit. Offers at hourly resistance and 21-DMA (1.1510) capped
gains. The pair slid a bit late in the day and sat ard 1.1475 towards the close.
Traders now wait for the US January jobs report. A weak result likely see
EUR/USD ending its consolidation phase and break higher. We're then likely to
see a quick run to 1.1650/80 where the Jan 22 & 21 highs sit.

USD/JPY: EUR/JPY was the main driver again, first weighing on USD/JPY and most
yen pairs in Asia after the ECB Greek collateral announcement late Wed, and then
rebounding after EUR/JPY failed to break Wed's low and buyers swept prices back
toward Wed's high as Grexit risk receded and EZ econ data again showed the EUR's
weakness starting to lend a hand. The Greek issue is far from resolved, but the
ELA extension/expansion at least creates some space for more talks. US data were
mixed, with the net result a strong rally in stocks funded by a sell-off in
Tsys. E-minis have been outperforming N225 futures this week, making USD/JPY
gains harder to hold. Today's 117.60 high is just shy of the Tenkan at 117.65.
More supply is noted into the falling 21-DMA that capped Wed's high at 118. And
USD-JPY 2-yr yield spreads, despite higher Tsy yields, have been grinding
marginally lower since Jan 22 as JGB yields have climbed faster than Tsy yields.
GBP/JPY's M-T bullish reversal made good progress today. It now faces the
100-DMA at 180.36 and 38.2% of the Dec-Feb slide at 180.87.

GBP/USD: BoE held the Bank Rate steady at 0.5% & kept its APP steady at GBP
375b. Minutes from this week's MPC meeting will be released on Feb 18. The
quarterly BoE Inflation Report will be published on Thurs Feb 12, with BoE
Governor Mark Carney hosting the ensuing press briefing. Cable moved to a 3-week
high in early London by 1.5255 as UK Halifax home prices beat Reuters f/c.
Mooted SNB demand for EUR was flagged as a factor in the EUR/USD rise to a
European high of 1.1458. The euro had been sold to a o/n low of 1.1304 after
news that the ECB was removing a waiver allowing low rated Greek debt to be
posted for collateral. Both the pound and the Euro remained firm with cable
moving above 40-DMA resistance at 1.5316 on the way to a 4-week high at 1.5344
before reversing to 1.5330 as the NY session ends. EUR/GBP moved to a high at
0.7510 as EUR/CHF moved higher on talk SNB was intervening to weaken Swiss
franc. The cross sold off later in the session as lingering fears of a 'Grexit'
remained, pushing EUR/GBP back below 0.75 to 0.7483 as the NY session ends. 

EUR/CHF was bid as London got going despite the overnight slide in the euro
after ECB said Greek bonds were no longer eligible collateral. EUR/USD dropped
to 1.1304 and the cross saw 1.0472 tested by the series of prior intraday
highs/lows in the 1.0460-70 region lent support. EUR/CHF rebounded through
1.0500 just as London got going and with the SNB reportedly active throughout
the European morning the cross has almost closed the gap on the post float
recovery high at 1.0651. 1.06425 is the recovery high in NY, holding shy of the
1.0650 pivot pt & the nearby underside of the broken up TL off the Jan 27 lows.
Swiss Jan FX Reserves and Retail Sales are on tap Friday and should reaffirm the
SNB's pre/post floor break maneuvering, though with huge valuation change the
main driver in reserves. USD/CHF's recovery continued to struggle near the
200-DMA at 0.9290 and the Oct 15 panic low at 0.9306 heading into the NFP
Friday. US econ data Thursday was a mixed bag, though the surge in the Trade
deficit has caused Q4 DP F/Cs to be cut by about 0.5% toward 2.0%.

USD/CAD opened Noram 1.2535, -40 pips vs the close and at Noram session high.
O/N range 1.2507/85; AUD/CAD +0.4% at 0.9780, DXY -0.1%. O/N focus had been a
surge in EUR/USD, sparked by a surge in EUR/CHF amidst talk of SNB intervention.
That set up Noram marts to monitor a rebound in oil prices - a result of the EUR
surge, Brent crude opened +2.3%, WTI +1.67%, CAD/JPY +0.6% at 93.72. Challenger
layoffs leapt some 20k, undermined the USD, US trade deficit gaped wide open, a
huge downside miss, Canada's trade half the deficit f/c and USD got clocked.
One-way traffic to 1.2409, a pause, 42 paid, 1.2394 given, 44 paid as oil prices
gyrated wildly. Brent heads to the close +4.5%, WTI +4.5%. CAD/JPY +1.3% at
94.40; AUD/CAD -0.6% at 0.9690.

AUD/USD held to a tight range in NY's session as it consolidated beneath the
200-HMA in basically a 0.7780/0.7825 range. Early NY saw the pair dip to the
lows on better than f/c weekly jobless claims. The slide faded into NY's
afternoon and pair rallied back near the 200-HMA as risk sentiment was upbeat.
JPY weakness due to the risk rally pushed AUD/JPU above 91.90 and this dragged
AUD/USD towards 0.7815. It sat near that level late in the session. Asia's
session is likely to be subdued as the market awaits the US January jobs report.
If the jobs report is soft AUD/USD likely spikes higher as shorts will cover.
This will see the Feb and Jan 29 highs cleared.  The door is then open to key
resistance in the 0.8025/55 zone. 

NZD/USD  NY walked in with the pair just above 0.7410 and immediately applied
bear pressure as the USD was firm early and NZD/USD offers sat in the 0.7415/25
zone. A slow drift down took hold for the morning and a NY low of 0.7369 was
made. Risk sentiment was buoyed in NY's afternoon and the pair got a lift as JPY
weakness drove many crosses higher. NZD/USD lifted near 0.7415 as NZD/JPY
rallied near 87.15.  Little pullback was seen for either pair as they both sat
near the NY highs late in the day. Techs suggest higher levels as the pair holds
above the 10-DMA again and RSIs are biased. However, the NFP will be the final
judge for direction. A below f/c reading should see the pair spike up as shorts
scramble to cover. We might then see resistance near 0.7500 break and the pair
make a return to 0.77/0.78 resistance.

LATAM USD/BRL remains bid despite overall USD weakness. Today's release of
Brazilian auto sales & output added the recent spate of weak Brazilian data.
USD/BRL moved to a high at 2.7618, before reversing to 2.7450 on the NY close,
looks set to challenge multi-year resistance at 2.7708 50% Fib of the 2002/2011
range and 2.7848 the Mar 2005 high. A close above 2.7848 eyes a return to levels
near 3.06, the 61.8% Fib and above. US data came in on the weak side, the US
trade gap widened moving banks to lower GDP f/c & US layoffs are mounting.
Friday's US NFP release may be a tipping point as to when the Fed will begin to
raise rates. USD/MXN moved to lows by 14.73 on the weak US data before reversing
to end the NY session by 14.77. Traders lightened long USD positions ahead of
the NFP release, Reuters f/c NFP rising 234k. USD/CLP moved to lows by 624.
    
ASIAN CURRENCY OUTLOOK
USD/AXJ set to open on Friday a touch lower as the moves of late Wednesday are
reversed. The ECB move on Greece failed to resonate offshore with EUR/JPY
leading the reversal. EUR/USD back to nearly 1.15 while crude partly recovered
Wednesday's over 8% losses to be up 4.5% at the NY close on Thursday. AXJ
trading as usual remained circumspect apart from MYR NDFs which are back to 3.54
after hitting 3.60 late NY on Wednesday. Focus today turns to tonight's US
non-farm payroll data. Reuters forecast plus 234k new jobs. 
 
USD/KRW traded a 1086.5-1092.5 range in Asia on Thursday; last at 1090.5. The
Kospi closed down 0.5%.

USD/SGD traded a 1.3475-1.3495 range in Asia on Thursday; last at 1.3481. The
Straits Times closed down 0.3%.

USD/MYR traded a 3.5675-3.5900 range in Asia on Thursday; last at 3.5725. The
KLSE index closed up 0.0%.

USD/IDR traded a 12635-12658 range in Asia on Thursday; last at 12635. The
Jakarta Interbank Spot Dollar Rate (JISDOR) was set at 12653. The IDX Composite
closed down 0.7%.

USD/PHP traded a 44.10-17 range in Asia on Thursday; last at 44.14. The PSE
closed down 0.5%.

USD/THB traded a 32.57-64 range in Asia on Thursday; last at 32.615. The Set
closed up 0.5%.

USD/TWD traded a 31.35-484 range in Asia on Thursday; last at 31.47. The Taiex
closed down 0.0%.

USD/CNY was set in Asia on Thursday at 6.1366 slightly higher than the previous
6.1318 fix. OTC USD/CNY traded a 6.2505-6.2560 range; last at 6.2521. OTC
USD/CNH last at 6.2531 - range 6.2515-6.2655. The 1-yr NDF was last quoted in
Asia at 6.3880-6.3900. The Shanghai Composite closed down 1.2%.

USD/INR traded a 61.705-94 range in Asia on Thursday; last at 61.73. The Sensex
closed down 0.1%.
    
Economic Data Releases (GMT)
06 Feb   22:30     AU          AIG Construction Index                         
06 Feb   22:30     JP          Foeign Reserves                                  
06 Feb   00:00     PH          Forex Reserves
06 Feb   00:30     AU          RBA Statement on Monetary Policy
06 Feb   05:00     JP          Leading Indicator                                
06 Feb   05:00     JP          Coincident Indicator
06 Feb   07:30     TH          Forex Reserves                                 
06 Feb   07:30     TH          Currency Swaps
06 Feb   08:30     HK          FX Reserves
    
OVERNIGHT RANGES---------------------------INTRADAY RANGES -- Close 2200GMT
NDFS OPEN   HIGH   LOW     LAST        VOL CURRENCY   HIGH     LOW    CLOSE
IDR  12700  12680  12650   12650-12665 N/A USD/JPY   117.60  117.02  117.52
INR  62.13  62.07  62.01   62.00-03    N/A EUR/USD   1.1499  1.1304  1.1479 
 KRW  1092.5 1091   1087.5  1087.6-88.4 N/A EUR/JPY   135.13  132.57  134.80
MYR  3.5840 3.5700 3.5425  3.5435-65   N/A GBP/USD   1.5345  1.5170  1.5328
PHP  44.15  44.15  44.12   44.12-14    N/A USD/CAD   1.2585  1.2394  1.2435
TWD  31.50  31.57  31.465  31.46-48    N/A AUD/USD   0.7825  0.7733  0.7798
CNY  1-mth  6.1625 6.1580  6.1570-00       NZD/USD   0.7428  0.7341  0.7395
CNY  6-mth  No     Trades  6.2780-00       USD/SGD   1.3495  1.3438  1.3447
CNY  1-yr   No     Trades  6.3780-10       USD/THB    32.65   32.57   32.61    

Equities  Close   Change  %Change  UST(Yields)    Close    Previous
DJIA      17885     +212    +1.20  10-year        1.82%      1.75%
S&P 500    2062      +21    +1.03  2-year         0.53%      0.48%
NASDAQ     4765      +48    +1.02  30-year        2.43%      2.34%
FTSE       6866       +6    +0.09  Spot Gold($) 1266.20    1270.40
DAX       10905       -6    -0.06  Nymex          50.64      48.58
Nikkei    17679     +343    +1.98  Brent          56.57      54.60
    
        
    
 
 
 
    
    

 
    
    
    

 (Reporting by Peter Whitley)

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