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Forex Today: Risk-off extends into Asia, UK monthly GDP – key focus

FXstreet.com Monday, 10 December 2018
Forex Today in Wednesday’s Asian trading session witnessed good two-way businesses while the US dollar extended its move lower amid growing concerns over the US economic outlook, in light of Friday’s downbeat US NFP report. The Aussie staged a comeback from three-week lows reached below the 0.72 handle on disappointing Chinese trade and inflation data released over the weekend. The Yen also recovered ground on risk-aversion and pushed USD/JPY back towards the five-week lows of 112.22. The spot quickly trimmed losses and reverted to 112.50 levels, despite the sell-off in the Asian equities and Treasury yields.

The Asian equity markets tracked the declines on its Wall Street counterparts while gold prices on Comex hit five-week tops above the 1255 level. Both crude benchmarks, on the other hand, consolidated Friday’s rally that was triggered by the OPEC’s decision to cut the output by 1.20 million barrels per day (bpd).

*Main Topics in Asia*

RBA’s Kent: next rate move likely to be up

48 no-confidence letters in PM May have been delivered - UK Times

US affirms March 1st 'hard deadline' for China trade deal - Reuters

New Zealand’s Treasury Monthly Economic Indicators

Odds of a March Fed rate hike seen slightly below 50% - Goldman Sachs

IMF’s Obstfeld: US likely to feel the impact of a sharp slowdown in global growth

Oil looking for Monday lift, WTI ticking over $52.50

Gold clocks five-month high in Asia

UK’s Johnson: PM Theresa May should renegotiate Brexit deal if loses vote in parliament

China copper imports dropped for the first in 2018

Eurogroup Head Centeno: “We must treat Italy like every other country”

*Key Focus Ahead*

Monday’s EUR economic calendar kicks-off with the second-liner German trade and current account data at 0700 GMT, followed by the ECJ filing on Article 50 to be announced at 0800 GMT. A fresh batch of UK economic releases will be reported at 0930 GMT, including the monthly GDP figures, industrial and manufacturing output. At the same time, the Eurozone Sentix Investor confidence data will be released.

In the NA session, the Canadian housing and employment data will headline amid a lack of significant macro news from the US docket. However, the US JOLTS job openings data will be eyed at 1500 GMT for fresh insights on the American labor market, following dismal NFP numbers.

*Besides, the following central bankers’ speeches will also remain in focus for fresh insights on their respective monetary policies. *

0630 GMT: BOC Governing Council member Lane, BOE MPC member Cunliffe

1245 GMT: BOC Governing Council member Lane again

EUR/USD: Probing key hurdle on broad-based USD weakness

A daily close above 1.1435 would confirm a triangle breakout and allow a sustained move above 1.15. The bull breakout, however, may remain elusive if the treasury yields turn higher.

GBP/USD remains at familiar 1.2750 level as Tuesday's Brexit vote approaches

Some key data for the UK will be appearing for the day that could see a spark of action on the intraday charts; UK m/m Industrial Production for October (forecast 0.1%, last 0.0%), UK Manufacturing Production for October (forecast 0.0%, 0.2%), and the UK's latest monthly GDP reading (forecast 0.1%, last 0.0%) will all be dropping at 09:30 GMT.

Brexit to dominate agenda in busy week for FX

Undoubtedly, the GBP/USD and other pound crosses will garner most of the attention next week as the UK parliament votes on the Brexit Withdrawal Agreement on Tuesday evening. 

GBP/USD Weekly Forecast: Sterling may benefit if parliament says “You shall not pass!” to Brexit deal

The UK parliament is set to vote on Brexit deal on Tuesday evening with little hope for other scenarios than the rejection of the proposed agreement.
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