Broad-based US dollar comeback was the main theme in Asia across the fx board this Tuesday, as a rally in 10-year Treasury yields lifted the sentiment around the greenback that was downed by dovish Fed Chair Powell’s comments and Fed pause risks.
Most majors experienced good two-way businesses, with the USD/JPY pair having staged a solid rebound from 108.51 to 109.00 while the Aussie was sold-off at 0.7150 amid disappointing Australian trade figures. The Kiwi also failed to sustain at higher levels and turned lower near 0.6730 levels amid unabated USD buying. The common currency was also one of the biggest loser this session, dragged back below 1.1450 barrier. Meanwhile, the Cable traded better offered near 1.2760 region amid looming Brexit jitters.
Among the commodities, gold futures on Comex dropped sharply towards 1280 levels while both crude benchmarks traded modestly flat heading into the US weekly crude supplies report.
Main Topics in Asia
EU and UK officials are discussing the possibility of extending Article 50 - Telegraph
China Stats Bureau head says 6.5% growth is achievable
Australian Trade Balance dips to 1.925 billion amidst downward revisions
UK's May spokesperson: No intention of extending Article 50
Brexit uncertainty drives at least £800 billion in assets out of London into Europe - EY Financial
WH Eco. Adviser Hassett: Will be `some' economic impact from shutdown - Fox
Gold: $1,300 break remains elusive despite the weak tone in the US dollar
Oil markets testing higher on trade hopes, production limitations
N. Korea leader visits China after warning of alternate path to US talks – Reuters
USD/JPY: value of bearish bets has dropped sharply in the last three days
Key Focus Ahead
Tuesday sees a busy European calendar, but with a void of first tier macro releases. Markets brace for the Swiss jobless rate at 0645 GMT, soon followed by the much-awaited German industrial figures that drops in 0700 GMT. The retail sales report from Switzerland will be published at 0730 GMT. From the Euroland, a raft of confidence numbers will be released at 1000 GMT. Meanwhile, the UK docket remains light, with the only Halifax house prices on the cards. Apart from the data, the Brexit-related headlines will remain the primary focus in the EU session, as the Brexit deal vote is scheduled early next week.
In the NA session, the trade balance data from the US and Canada will drop in at 1330 GMT, followed by the US JOLTS job openings at 1500 GMT. At 2130 GMT, the API weekly crude data will be out that will offer fresh trading impetus to the oil and CAD traders.
EUR/USD: 100-day MA is proving a tough nut to crack
1.14 could come into play, if the Eurozone consumer confidence, due at 10:00 GMT misses estimates.
GBP/USD struggling to hold onto near-term highs above 1.2750 as Brexit bends the Pound
Tuesday's economic calendar is decidedly low-tier for the Cable today, with only Halifax Housing Prices on the docket at 08:30 GMT, with the quarterly figure expected to improve from 0.3% to 0.4%, and the US offering looks similarly thin …
EURO - What Will Drive it Above 1.15?
Industrial production and Eurozone confidence numbers could hurt more than help the currency but what matters the most is risk appetite. If stocks continue to recover, EUR/USD could shrug off these reports and make a clean break above 1.15.
FOMC Minutes Preview: The risks behind the pause
The Fed minutes are an edited version of the FOMC discussions. They are accurate and they are also part of the policy narrative that the Fed presents to markets and the world.
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