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IFR Markets ForexWatch Asia Regional Daily Briefing
October 14, 2016 / 12:57 AM / a year ago

IFR Markets ForexWatch Asia Regional Daily Briefing

SYDNEY, Oct 14 (IFR) - Market Briefs
    * U.S. jobless claims unchanged at 246k, hold at 43-year
low, 4-wk average of claims falls 3.5k

    * US import prices +0.1% v 0.2% Rtrs f/c, -0.2% pvs; on
gains in petroleum, food costs 

    * US Export prices +0.3% v 0% Rtrs f/c, -0.8% pvs; on motor
vehicle parts & consumer goods (ex-autos)

    * Fed's Harker (non-voter/moderate): supports one vote in
'16, 2 in '17 (will vote in 2017)

    * Central bank signals, possible extension of QE, knock
German bond yields off one-month peak

    * Risk rallies in NY aft, oil  +0.2% shrugs off first
US crude build in 6 weeks 

    * US equities off worst of day, hovers near flat into close

    * Disappointing China trade data spurs fears recovery may be
faltering, adds to worries China to let CCY weaken further

    * Reuters Poll:   ECB to keep policy steady in Oct; extend,
tweak QE in Dec

Macro Themes in Play
    * Markets down on China trade news, RMB seen being guided
lower, export deflation;  copper crashes, bank sectors
underperform as BOJ and ECB yield curve steepening plays hit

    * USD settles back with rates, yield push earlier in week
had more to do with Street setting up treasury auction
concession than fundamentals; Dec rate hike slips small to
2-in-3 (prev 7-in-10) in futures market; Retail Sales and Yellen
speech key events tomorrow

    * GBP up but weak, still doesn't trade short; USDJPY lower
with stocks; EUR retraces after blowing out barriers at 1.10

    * CAD better with oil; AUD impressive, gold miners bounce
hard off 200 dma support

    * Crude hangs on despite inventory build, tension builds
between US and Iran in Yemen

Looking Ahead - Economic Data (GMT)
    * 23:50  JP Foreign Bond Investment         w/e   

    * 23:50  JP Foreign Invest JP Stock                    
w/e    251.7b-prev

    * 23:50  JP Corp Goods Price MM*                      Sep  
f/c -0.1%, -0.3%-prev

    * 23:50  JP Corp Goods Price YY*          Sep   f/c -3.2%,

    * 01:30  CN PPI YY*                                 Sep  
f/c -0.3%, -0.8%-prev

    * 01:30  CN CPI YY*                                 Sep  
f/c 1.6%, 1.3%-prev

    * 01:30  CN CPI MM*                                Sep   f/c
0.3%, 0.1%-prev

Looking Ahead - Events, Other Releases (GMT)
    * 00:30  AU  Reserve Bank of Australia publishes Financial
Stability report 

Currency Summaries
    * EUR/USD broke through 1.1000 options to trade a 1.0985 low

    * Very large volumes seen around purported barriers 1.1000

    * 1.0985 low completed a Fibo off Monday's 1.1205 high

    * 38.2% of 1.1205-1.10985 is a tic above Wed's 1.1068 high;

    * Broken up TL fm Jun-Jul lows will be at 1.1065 on Friday

    * RSI rebounding from O/S & rebound fm stretched lower Bolli
are bullish

    * All eyes on EZ banking index, US Retail Sales & Corp
earnings Friday

    * JPY broadly on the rebound after weak China Trade data &
US ylds pullback

    * USD/JPY's 104.63 high roughly finished a Fibo move fm the
100.09 Sep low

    * Daily Cloud top at 103.52 was probed & hourly TL & Cloud
broken in NY

    * But prices held above the 200-HMA, then by the 103.34
session low

    * A bounce in oil helped stocks & risk rebound, deterring
more JPY buying

    * EUR/JPY broke 114, but again reverted to the thin Cloud at

    * Weekly MOF flows & Sep Corporate Goods Prices are on tap

    * US Retail Sales, Corp Earnings & Yellen's speech are the
main event risks

    * Frothy USD/CHF knocked lower after Thur's high stopped a
tic below Wed's

    * O/S RSI has rolled over & prices have fallen back below
the stretched Bolli

    * General USD pullback led by haven JPY after weak China
Trade data

    * All eyes on US RS & bank earnings Fri to see if pullback

    * Risk-off flows & weak EZ bank stocks got EUR/CHF below
1.0894 props

    * That level's the Cloud base & 50% of Sep-Oct rise; above
it near the close

    * Oil's intraday rebound steadied stocks & risk trades a bit

    * Swiss Sep Producer & Import Prices are due Fri; -0.4% y/y

    * Risk rally in NY afternoon lifts GBP to 1.2274 high, pair
ends NY 1.2250

    * Tesco confirms pricing row with Unilever has been settled

    * Cable fell to 1.2132 early Lon amid ongoing hard Brexit

    * EUR/GBP rose to a 2-day peak of 0.9068 in Europe, ends NY

    * Legal challenge to UK govt's right to trigger A50 begins

    * Scottish govt to publish independence referendum
consultation bill next week

    * O/N range 1.3240/3307, Noram range 1.3185/62 close 1.3189
(NY -60 pips)

    * USD/CAD's London stall at 1.3307 prompted profit taking in
USD/CAD longs

    * Strong CAD cross demand a primary factor, CAD/JPY +0.27%
in NY, 78.46

    * AUD/CAD led the CAD charge higher but petered out, +0.2%
in NY, 0.9990

    * DXY -0.44% (-0.28% NY) S&P -0.10%  (+0.4% NY) EUR/CAD
1.4580 -0.21%, gold +0.3%

    * Brent/WTI +0.5/0.6% on DXY drop; Fri-PPI, retail sales,
biz inv, U-Mich [page:2417]

    * AUD/USD opened NY  0.7552, NY range 0.7537/83, O/N range

    * Oz closing c 0.7575, +0.16% DXY -0.44% (-0.28% NY) AUD/JPY
78.44, -0.41%

    * EUR/AUD 1.4492, +0.25%m S&P -0.10% (+0.4% NY) Dalian iron
ore +-0.5%, Cu -2.4%

    * Gold +0.3%. CAD led commodity ccys higher [page:2346]
AUD/CAD -0.5%, 0.9986

    * AUD/NZD traded 1.0649/1.0708 in NY, closed -0.3% 1.0663
(O/N 1.0649/1.0740)

    * O/N we have Japanese data due & the RBA's Financial
Stability Review [page:2417]

    * NZD/USD opened NY 0.7067, traded 0.7050/7102, closed @98
(O/N 0.7035/70)

    * A busy Noram session with profit taking in USD pairsm DXY
-0.44% (-0.28% NY) 

    * S&P -0.10%  (+0.4% NY) Kiwi was mixed vs commodity
currency peers

    * NZD/CAD -0.16%, 0.9354 with Brent +0.5/0.6% on DXY drop,
AUD/NZD -0.3% 1.0663

    * Nov milk -0.9%, gold +0.3%, corn +3.7%, wheat +5.1%
lifting Ags in general

    * O/N we have Japanese data due & the RBA's Financial
Stability Review [page:2417]

    * Risk reverses early US swoon, USD/MXN off NY high by 19.10
ends NY near 18.93

    * Early USD strength on weak China trade data & US crude
build shrugged off

    * Banxico: recent hike unanimous, wary US election may fuel
MXN slide 

    * USD/BRL ends NorAm 3.1915 -0.37%, Brazil FX inflows total
USD534 mn to Oct 07

    * USD/CLP +0.66% to 671, copper -2.37%, CLP gains muted
owing to early NY close

Questions over BoE Carney's term could weigh on GBP
For financial markets, an additional worry to Brexit is whether
BoE Gov Carney will choose to end his term mid-2018. The
prospect of a messy outlook for the UK economy under Brexit
negotiations, a change in UK PM and political attacks on the
BoE's pre-referendum stance as well as policy, suggest reduced
odds of Carney staying beyond mid-2018. Carney has always
indicated he will stay on for five years instead of the eight
written into legislation. The BoE's website states that Carney's
term will end in June 2021. However, a dramatic shift in the
economic and political landscape post the Brexit referendum
makes it doubtful he will serve full term. If Carney leaves
mid-2018 then this will be another negative for UK assets on top
of rising political and economic risks due to Brexit. GBP
remains vulnerable as caution from investors will likely make it
difficult to finance the large current account deficit. Full

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