Forex Today: Kiwi crumbles post-China data, UK CPI, EZ GDP, CB speeches eyed
Forex today witnessed tight trading ranges across most majors, while risk trends drove the markets. Risk-on sentiment somewhat faded after the Chinese dataflow disappointed markets. As a result, the Aussie stalled it’s post-NAB business conditions induced rally, while the Kiwi dived deeper into the red zone and hit fresh nine-day lows at 0.6861. The USD/JPY pair wavered above mid-113s, although further upside lacked follow-through amid a pause in the Treasury yields rally. The Asian equities turned cautious ahead of key central bankers’ speeches due later in the day ahead.
Main topics in Asia
Australia’s business conditions surged to the highest on record - BBG
Bloomberg offers fresh insights on the Australian NAB Business conditions data that surged to the highest levels on record.
Australia politics - Senator Jacqui Lambie resignation unlikely to affect Turnbull's government
Australia’s dual-nationality crisis has claimed an eighth victim, says a Bloomberg report.
China Oct data dump: Downbeat across all indicators
China’s Oct retail sales YoY, the number came in at +10.0 vs 10.4% exp and 10.3% last, with industrial output YoY at 6.2% and 6.3% exp and 6.6% last.
China 10-yr yield nears 4% for first time since 2014
China's campaign excessive borrowing continues to boost the bond yields. The benchmark 10-year Chinese bond yield rose to 3.99 percent; the highest level since Oct. 2014.
Key Focus ahead
We have a busy session ahead, kicking-off with the German GDP and CPI data due ahead of the European open. The UK CPI and PPI reports will offer fresh impetus to the GBP traders, followed by the Eurozone flash GDP and industrial production data.
Also, of note remains the German ZEW economic surveys, while the main highlight in Europe is expected to be the speeches due to be delivered by the ECB Chief Draghi, BoJ Governor Kuroda, BOE Head Carney and lastly the Fed Chair Yellen at the ECB Communications Conference, in Frankfurt.
In the American session, the US PPI numbers will be reported, while the BOE MPC member Cunliffe’s speech is scheduled later in the American afternoon.
GBP/USD - risk reversals decline ahead of UK CPI, focus on 2Y yield spread
Cable did take a hit on Monday on the back of political uncertainty but managed to close above the 100-day MA.
EUR/USD gathers pace for a test of 1.1700 ahead of key risk events
The bears continue to guard the 1.1680 resistance, prompting the EUR/USD pair to enter a phase of consolidation in Asia, as investors remain in a wait-and-see mode ahead of the Eurozone dataflow and ECB President Draghi’s speech due today.
Eyes on European Central Bank (ECB)’s communication’s conference - UOB
Analysts at UOB Group explained that the European Central Bank (ECB)’s communication’s conference in Frankfurt on this week will see key global central bankers converging with a scheduled panel discussion by FOMC Chair Janet Yellen, ECB President Mario Draghi, BoJ Governor Haruhiko Kuroda and BoE Governor Mark Carney.