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IFR Markets ForexWatch Asia Regional Daily Briefing
February 27, 2017 / 11:09 PM / 9 months ago

IFR Markets ForexWatch Asia Regional Daily Briefing

    SYDNEY, Feb 28 (IFR) - 

Rate rise lifts USD, Le Pen dip lifts EUR
Market Briefs
    * US Durable goods orders jump 1.8% as f/c,  Core capital goods orders fall
0.4% v 0.5% Rtrs f/c in January

    * US pending home sales -2.8% v Rtrs f/c 0.9%, 0.8% pvs,  fall to lowest
level in a year

    * Fed's Kaplan: Repeats that rate hike should be sooner than later

    * Atlanta Fed’s GDPNow 2.5% vs 2.4% on Feb 16

    * Dollar weaker as investors await details on Trump tax plans, Investors
fear lack of details from Trump

    * Trump seeks 'historic increase' in US defense spending, cuts elsewhere;
budget to be a nat’l security budget

    * ECB won't announce another round of TLTROs, as current pgm expires next
month - Traders

    * French 10-year bond yields hit 1-mos lows as political jitters ease, Polls
show Macron beating Le Pen in runoff

    * EZ banks cut cross-border lending as stability fears grow, Cross-border
loans between banks down 6 pct in Jan


Looking Ahead - Economic Data (GMT)
    
  * 23:50  JP  Industrial output prelim mm    Jan   f/c 0.3%, 0.7%-prev
    * 23:50  JP  IP Forecast 1 Mth Ahead      Jan   3%-prev

    * 23:50  JP  Retail Sales YY                     Jan   f/c 0.9%, 0.6%-prev

    * 00:00  AU HIA New Home Sales m/m    Jan   0.2%-prev

    * 00:30  AU Private Sector Credit*             Jan   0.7%-prev

    * 00:30  AU Housing Credit*                     Jan   0.5%-prev

    * 05:00  JP  Construction Orders YY        Jan   7.1%-prev

    * 05:00  JP  Housing Starts YY*              Jan   f/c 3.2%, 3.9%-prev


Looking Ahead - Events, Other Releases (GMT)
    * --:--       JP Bank Of Japan Executive Director Shigehiro Kuwabara to
attend the Third FinTech Forum.


Macro Themes in Play
    * USD mixed, no theme, crosscurrents dominate action; Trump expected to lay
out fiscal plans in speech tomorrow night, key to Trump trade are tax cuts,
equity market remains optimistic despite possibility legislation pushed into
2018

    * US rates up, March rate hike trades at best odds YTD to better than
1-in-3, Dallas Fed’s Kaplan saying nothing different than colleagues but somehow
resonates with STIR market on otherwise quiet day; core Durable Goods falls for
first time in four months

    * EURUSD firm, bears belatedly realizing currency should have  gone much
lower last week (but didn’t) with Euro short rate collapse/political turmoil;
USDJPY up with rates/stocks; Cable down on talk of another Scottish referendum,
Deutsche Boerse/LSE merger falls apart

    * AUD, CAD, commodity FX trade heavy, CRB breaks down; gold hangs on, still
sending negative USD signal; oil fades from higher open, massive spec long
positions continue to build


Currency Summaries
EUR/USD  
    * Pair lifts in Europe's morning, NY opens just below the 200-Hour SMA

    * Tight range early-on but bull pressure emerges as the USD & UST yields
slide

    * Rally sees 10 & 55-Day SMAs and thin daily cloud pierced, Feb 20 high
neared

    * USD & UST yields reverse course, DE-US spreads widen towards recent wides

    * EUR/USD slips below aforementioned techs, long upper wick on daily candle

    * Monthly techs bearish, suggests 1.0330/40 test is likely

    * No major EZ data due tomorrow, US Q4 GDP & Feb Chicago PMI risks are due


USD/JPY 
    * USDJPY spurts higher on US rate move
    * Fed’s Kaplan comments put March rate hike in play
    * But USDJPY bulls still not in clear, needs to make higher high (than prev
day)
    * 112.90-113.10 resistance on hourlies

    * GBP/JPY holds above 100-DMA at 138.68/Feb's 138.50 low so far

    * Cross broke pennant support Friday, ADX confirming dntrend in prices

    * Japan Jan IP & Retail Sales are out Tuesday


USD/CHF
    * USD/CHF is marking time ahead of Trump's speech Tuesday night

    * Pair is back above the Tenkan, but below the twisting Cloud

    * Bulls need a close above 1.0154 (61.8% of Jan's slide) 

    * EUR/CHF is away fm 1.0632 Feb 8/21 lows, close to 1.0623 Brexit low

    * Some help from narrowing OATs-Bunds spreads, but burden's on bulls

    * SNB domestic deposits rise to CHF 470.161bln w/e Feb 24 fm prev 467.99

    * Total also up             . Data continues to indicate SNB defence

    * SNB's Zurbruegg defended the need for cash             

    * Feb KOF leading Indicator is out Tues


GBP/USD   
    * Cable fell to 1.2384 Lon AM low amid focus on the Scottish question

    * Times said May preparing for indyref2 demand to coincide with A50 trigger

    * Scottish indyref2 only binding if May gives green light             

    * Pair rallied buy Lon fix rose to NorAm high 1.2479 settles at 1.2450 by NY
EOD

    * EUR/GBP ends NorAm 0.8508 +0.37%, EUR bid as Le Pen threat downgraded

    * Pair pierces 10/21-DMA, res 30-DMA (0.8544), lwr 30-d Bolli supports
(0.8417)

    * LSE scuppers Deutsche Boerse merger hopes             


USD/CAD
    * O/N range 1.3085/3122 O/N, Noram range 1.3084/3154, last 1.3152 (NY +38
pips)

    * US durable goods +1.8% was on f/c but inflated by civ/def aircraft orders

    * Core capital goods fell  but was offset by a 0.4% increase to previous
[page:2417]

    * Bldg permits +5.3%, pending home sales -2.8% (inventory shortage
            

    * USD/CAD up on higher US yields after UST sell off              DXY +0.08%

    * Brent/WTI -0.05%/+0.15% Tue - Cda PPI/RMPI, US data slew (including GDP
rev)

 
AUD/USD     
    * Opens NY near 0.7675 after a slide in Europe's morning, choppy in early NY

    * Bull pressure emerges as the USD & UST yields slip, pair nears 0.7700

    * NY gains fade though as broad based USD buys hit, pair falls back below
the 10-DSMA

    * Pair near 0.7675 late to leave it nearly flat on the day

    * Long upper wick on today's candle suggests bears are asserting themselves

    * Oz January housing & private sector credits are second tier data risks in
Asia


NZD/USD
    * Pair slips to the 200-Hour SMA in Europe's morning, NY opens just above it

    * Bull pressure early on as the USD gets hit and UST yields slip a bit

    * Pair nears the 21-Day SMA but the gains quickly reverse as the USD rises
sharply

    * A long upper wick forms on the daily candle and the pair nears the 10-Day
SMA late

    * Monthly charts lean bearish, suggests a break of support in the 0.7115/35
zone is due

    * NZ Jan trade data, NBNZ business outlook & own activity data are risks in
Asia


LATAM
    * USD/MXN ends NY near NorAm session high (19.9390) at 19.93

    * US rates rise as March hike outlook rises, CME Fed watch to 37% from 26%
Fri

    * Fed's Kaplan reiterates sooner rather than later on hikes             

    * USD/BRL (offshore) flows light owing to Carnevale holiday Mon/Tues, holds
3.11

    * USD/CLP closed NorAm  'unched' at 647.30, days range 643.8/64722; copper
flat


Out of the blue, March rate hike odds jump
    * Trading in March rate hike odds now at best in cycle

    * Futures market sees odds at better than 1-in-3

    * Dallas Fed's Kaplan says rate increase should happen sooner than later

    * Consistent with his and colleagues' recent comments

    * But somehow strikes a chord on otherwise uneventful day

    * More here:                 and                


CHART OF THE DAY (NZD/USD)
    * Pair consolidates gains after recent bounce off the 200-Day SMA

    * Daily RSI is biased up and pair holds above the 10-Day SMA

    * A close above 21-DSMA (0.7232) and Thursday’s high (0.7246)should
encourage bulls

    * February (0.7375) and November high (0.7403) would then be in play

NZ Jan trade data, Q4 ToT & China Feb Mfg PMIs are risks to bulls

    

 (Reporting by IFR and NY buzz team)
  

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