1) Overnight Wrap
Another quiet session here in Asia ahead of Bernanke’s speech at 1400 GMT. Players remains sidelined with position adjustment to continue. Short squeeze in risk pairs, AUD and Euro in particular, were seen early in the morning . Real money reported buying Audusd before market open below 1.0450. Later we have RBA Steven , who mentioned inflation outlook, said the Bank did not have a pre-committed notion and good for policy to sit still during global turbulence. This sounds contradicting to the general market anticipation of a rate cut by end of this year. That has caught analysts off guard and Audusd printed the day high of 1.0503 in the wake of that. Eurusd, moving in tandem with Audusd, also bounced to day high to take out weak stops above 1.4400. Usdjpy off the overnight high but holds well above short term support 77.20 area with momentum players seen buying. Elsewhere, Regional stocks are marginally lower and Gold stalling most of time around the high of the overnight range.
DJ AUSTRALIA’S RBA: “USEFUL TO SIT STILL” AT TIMES OF TURBULENCE
DJ AUSTRALIA’S RBA SAYS RECENT SHOCKS MAY EASE UPWARD PRESSURE ON INFLATION
DJ AUSTRALIA’S RBA SAYS INFLATION TO REMAIN ABOVE 3.0% IN 3Q
DJ JAPAN JUL OVERALL CPI +0.2% ON YR
DJ TOKYO AUG CORE CPI -0.2% ON YEAR; MKT EXPECTED -0.1%
2) Orderbook & Flow
EURUSD has few stops before 1.4200 below and 1.4500-20 above.
EURGBP offers just below 0.8900 handle.
USDJPY has stops collection at 76.80 below with little of note topside before 79.00.
Overnight Flows were light and we were net buyers of AUDUSD.
3) USD/Asia Run
USDKRW 1083.5 (Thursday open 1086.0)
USDINR 46.22 (46.18)
USDPHP 42.48 (42.40)
USDCNY1y 6.2955 (6.2910)
USDIDR 8590 (8575)
USDMYR 2.9940 (2.9845)
USDTWD 28.99 (28.97)
USDSGD 1.2060 (1.2100)
4) Opening Levels
EUR 1.4422
GBP 1.6317
JPY 77.20
CHF 0.7931
WTI 85.1
Brent 110.7
XAU 1774.0
Silver 40.65
X-Over 701
Greece 2297
Porutgal 1039
Ireland 837
Spain 376
Italy 377
UK 10y 2.46
Ger 10y 2.15
US 10y 2.24
Bund 134.84
Spain over bunds 282
Italy over bunds 288
BeBanks Index 75.49
3m Eur Xccy -81.7
5) Thursday Data
US
• Initial jobless claims for the week ending Aug 19 fell to 417K (vs. 408K previously)
Europe
• Germany’s Sep GfK consumer climate index fell to 5.2 (vs. 5.4 in Aug)
• France Government announced more austerity to try to meet the 2012 deficit target
• UK’s Aug CBI distributive trades- total sales fell to -14.0 (vs. -5.0 in Jul)
Asia
• Hong Kong’s Jul exports rose 9.3% y-o-y (vs. 9.2% y-o-y in Jun)
• Hong Kong’s Jul imports rose 10.2% y-o-y (vs. 11.5% y-o-y in Jun)
• Hong Kong’s Jul trade balance rose to HKD -35.9bn (vs. -40.3 in Jun)
• Philippines Jun imports rose 6.6% y-o-y (vs. 1.6% y-o-y in May)
• Philippines Jun trade balance rose to USD -376.0mn (vs. USD -780.0mn in May)
• Thailand’s Jul custom exports rose 38.3% y-o-y (vs. 16.8% y-o-y in Jun)
• Thailand’s Jul custom imports rose 13.5% y-o-y (vs. 26.1% y-o-y in Jun)
• Thailand’s Jul trade balance rose to USD 2,798mn (vs. USD 1,268mn in Jun)
HSBC Global Research