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IFR Markets ForexWatch Asia Regional Daily Briefing
November 16, 2015 / 11:30 PM / 2 years ago

IFR Markets ForexWatch Asia Regional Daily Briefing

SYDNEY, Nov 17(IFR) - Market briefs
USD gains broadly on growing view of Dec Fed rate rise, rises vs yen after Japan
GDP slips
Stocks edge higher, impact from Paris attacks seen limited; European shares
reverse initial losses to gain slightly
ECB's Nowotny: Demand is necessary to avert Japan-style fate
Demand fears push copper to lowest in 6-yrs, Codelco offers 26% lower premium to
ECB's Coeure: closely following consequences of exceptional monetary policy on
finc'l stability
China's Xi says world needs new sources of economic growth - Xinhua
Canada factory sales unexpectedly fall in September; Mfg sales -1.5% vs Aug
Reuters Poll: ECB likely to start buying municipal bonds under QE, traders say
Macro themes in play
Dollar up as US stock market brushes off Paris attack; DXY at best since April;
EUR at 7 month lows as Euro short rates go more negative; 2yr at -0.37 bps;
USDJPY creeps up with equities
GBP lower but outperforms as EURGBP cross at 3 month lows; AUD down on copper
collapse; CAD weaker despite higher oil, Trudeau plan to ban oil tankers off NW
coast seen as further blow to key export industry
Trading in NorAm quiet, traders tread lightly as implications of Paris sorted
Looking ahead - economic data (GMT)
No Significant Data
Looking ahead - events, other releases (GMT)
21:30 AU RBA Assistant Governor Christopher Kent speaks at an economics
conference in Sydney
00:30 AU RBA will publish the minutes of November policy meeting
Currency Summaries
    * Choppy European morning gives way to bear market in NY hours
    * NY opens near 1.0740, bear pressure right away as USD broadly bid
    * Brief pause on bids into 1.0700, slight bounce above 1.0720 sold into
    * USD bid unrelenting & big lift in equities see pair slip below 1.0680 late
    * Tech bearish as 10-DMA caps & RSIs still give bears momentum
    * DE Nov ZEW, UK & US Oct CPI readings likely to impact EUR tomorrow

    * Soft JPY GDP, lingering Dec Fed hike expectations & N225's rebound lift
    * Rebounded from 122.23 O/N (post France attack) low by rising Tenkan line
    * Clears last 3 days' highs & nearing Nov 9 post NFP peak at 123.60
    * BOJ unlikely to ease this week, but more of a risk for Dec & Jan meetings
    * N225 & other stocks up on expected ECB & BOJ easing
    * USD/JPY's 100 & 200-HMAs are converging to support by 122.75-80
    * EUR/JPY may finally close below 131.80, the 61.8% of the Apr-Jun rise
    * EZ CPI a tenth above f/c, but still far too weak to avert more ECB easing
    * US CPI & IP are Tues's main event risks

    * EUR short-covering influenced EUR/GBP rise to 0.7078 European am high
    * 0.7025 3mth low in Asia after Friday's Paris attack 
    * Offers touted at 0.71 near Fri's high (0.7098), 10-DMA/200-HMA caps by
    * GBP/USD traded in tight 1.5182-1.5237 range on the day, NY session
    * Oil rally into the NY close hits USD, Cable on its heels as US exp'd to
hike in Dec
    * Offers tipped 1.5250, 1.5270 Nov 13 high & 1.5300 opt interest, daily
cloud base 1.5314
    * Boris Johnson makes waves ahead of Brexit referendum 

    * EUR/CHF soft in wake of attacks in France; strong ECB easing expectations
    * 100 DMA @ 1.0770, 30 DMA lower Bolli @ 1.0761. Thurs base @ 1.0757
    * Cloud base, yet to be closed below, is now at 1.0791
    * Sight deposit data suggests no intervention last wk despite speculation
    * See &  
    * USD/CHF up in broad USD advance & closing gap on Mar peak at 1.1028
    * Fed still favored to hike in Dec, but USD gains could make it a closer

    * O/N range 1.3291/3337, Noram range 1.3304/72, close 1.3335, NY +23 pips
    * Brent crude +0.38%, WTI +2.5%, alum. -1.6%, copper -2.4%, gold +0.27%
    * AUD/CAD +0.25%, 0.9460, CAD/JPY +0.37%, 92.42, EUR/CAD -0.54%, 1.4238
    * DXY +0.41% (+0.3% NY) US stocks +0.8/+1.1% (S&P +1.2% in the NY session)
    * Cda mfg sales sunk 1.5% (f/c +0.1) Int'l  Secs +3.35bn fgnrs , -6.1bn
    * Tue- US CPI, wkly earnings, IP, cap util, mfg output lots more [page:2417]

    * Bear pressure applied Europe morning stalls near 200-HMA & bounces into NY
    * Near 0.7125 in early NY, bear pressure resumes on broad USD bid & copper
    * 200-HMA breaks & 0.7081 low hit, bounces near 200-HMA late
    * Stock rally & JPY weakness has pair near 0.7100 late
    * RBA risk later, speech by RBA's Kent & minutes of last meeting due
    * Techs lean bearish, Nov 13 doji sees downside today while 21 & 55-DMAs

Large bear pressure in Europe's morning on AUD/NZD's rise toward 1.0970
Pair clears 55-DMA, 0.6500 support area & dives into the daily cloud
Near 0.6485 into NY's open, more pressure applied on commodity slide & USD rally
0.6469 low hit but slide loses momentum as risk turn upbeat on equity lifts
Soft JPY lifts NZD/JPY from 79.60 near 80.15 helps NZD/USD bounce above 0.6500
Continued USD bid sees dip near 0.6490 late
RBNZ Q4 inflation expectations due later, if low NZD likely gets hit
    * USD/CLP rallied to new 2015 above 709.90, near 714, high not seen since
    * Codelco cut copper premiums sending copper -2.4% to Jun '09 lows
    * USD/MXN ends NY at 16.78 +0.6%, in light holiday trade
    * oil rallying into the close helped reverse early NY gains to 16.8380
    * USD/BRL ends NorAm near session lows sub-3.82, despite political turmoil &
weak econ
    * BCB survey sees 2015 inflation above 10% (at 10.04%), '16 at 6.50; '16 GDP
-2% from -1.9%

ECB silence supports deeper deposit cut pricing
April 17 was the last day of the post-QE core/semi-core eurozone govt bond
market rally, when the German curve was negative all the way out to 7 years and
10-yr yields dipped below 5 bps. A rout followed over the next few weeks,
leaving some of those yields less negative and others back in positive
territory. When looking at the current market compared to then, two interesting
observations: (1) the percentage of total outstanding bonds with negative bid
yields then was 37.1% vs 35.5% now, but (2) the total amount of 2-30 year
maturities trading below the ECB's deposit rate floor of -0.20% now stands at
12.8% vs 10.3% in April. The greater current proportion of bonds not qualifying
for QE because they have a yield below the ECB's deposit rate highlights the
extent to which markets are priced for a deposit rate cut. The ECB's silence
suggests a degree of comfort with such pricing, unlike back in April.

 Overnight NDF ranges and closing NY NDF prices unavailable

 (Reporting by Peter Whitley)

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