Global Markets:

  • Asian stock markets: Nikkei down 1.20 %, Shanghai Comp lost 1.10 %, Hang Seng and ASX up 0.30 %
  • Commodities: Gold at $1239 (-0.15 %), Silver at $17.40 (-0.20 %), Crude Oil at $83.00 (-0.35 %)
  • Rates: US 10 year yield at 2.14, German 10 year yield at 0.82, UK 10 year yield at 2.11

News & Data:  Japan Tankan Index 8, Previous: 10.0

FX Overview:

After all the volatility, it was a rather quiet session in Asia. EUR/USD consolidated in a 1.2792-1.2815 range. Dealers saw some buying from Asian sovereign names, but flows were light overall. Good offers reported in the mid-1.28’s, while bids resting towards 1.2740.

GBP was the outperformer in FX yesterday and it hit a high of 1.6110 in the Asian session. Banks saw good buying in GBP/JPY from leveraged names in the early session, but momentum waned as it hit 171.50 and eventually retraced back to 170.70. The charts suggest there is still plenty of upside potential in the pair, which had a heavy decline from 180 to 168.00 in just one month.

Similar story in USD/JPY, which was kept bid in the early Tokyo session, but then declined to 106.15. There is talk of decent offers at 106.70 and stops through 108.85 in good size.

NZD/USD dropped sharply on a Bloomberg headline that said “RBNZ days NZ currency level unjustified, unsustainable”, but the headline wasn’t new and it was an error by a reporter. The pair quickly retraced the losses and reached a high of 0.7857.

Upcoming Events:

  • 12:30 GMT – US Building Permits (2.8 % MoM, 1.03mln)
  • 12:30 GMT – US Housing Starts (4.8 % MoM, 1.01mln)
  • 12:30 GMT – Canadian CPI (0.0 % MoM, 2.0 % YoY)
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