Kiwi jumps on strongest growth in two years

Kiwi higher as Q2 growth beats forecasts

New Zealand recorded its best quarter-on-quarter growth in Q2 as the economy expanded 1.0%, a faster pace than the 0.8% growth economists had expected. On an annual basis, growth was also higher than expected, rising 2.8% y/y, topping estimates of a 2.5% increase. New Zealand’s Statistics Agency reported that growth was broad-based with mining the only industry to decline. The largest contribution to growth was agriculture, which rose 4.2%.

The kiwi popped higher in a knee-jerk reaction to the data, with NZD/USD rising to its highest level this month. The 55-day moving average is at 0.6687 and NZD/USD has traded below this average since April 19.

 

NZD/USD Daily Chart

Source: Oanda fxTrade

 

NAFTA talks slow

It is looking increasingly less likely that any agreement on renewing the NAFTA this week with talks reportedly stalled and going nowhere. Canadian PM Trudeau said yesterday there would need to be a bit more flexibility from the US if the two sides are to reach a deal by the end of the month.

The Canadian dollar has been rising for the past two days, though more likely due to weakness in the US dollar rather than strength in the Canadian one. USD/CAD is currently trading at 1.2918, above the 200-day moving average at 1.2866. USD/CAD has traded above this moving average since April 19.

 There are $1.1 billion worth of USD/CAD options expiring today at strike 1.30

 

USD/CAD Daily Chart

Source: Oanda fxTrade

 

 

EU leaders summit to produce more Brexit headlines?

EU leaders begin a summit in Austria today with an increasing risk that more Brexit-linked headlines will be released. The latest news was that UK’s May had rejected the EU’s improved proposal on the Irish border and the pound suffered as a result.

Other data points include UK retail sales for August which are expected to show negative month-on-month growth again after a positive July.  The US releases weekly jobless claims and the September reading for the Philadelphia Fed manufacturing index together with August’s existing home sales.

 

You can view the full MarketPulse data calendar at https://www.marketpulse.com/economic-events/

 

Live FX analysis – 18 September 2018 (Video)

Senior Market Analyst Craig Erlam discusses the key market themes from the summer – most notably US tariffs and Brexit – and the events to watch out for this week.

Craig also gives his live analysis on EURUSD (17:48), GBPUSD (21:36), EURGBP (24:42), AUDUSD (25:44), USDCAD (28:33), GBPCAD (31:02), NZDUSD (32:41), USDJPY (34:16), GBPJPY (35:25) and EURJPY (36:31).

Super Thursday, indeed

Super Thursday, indeed

Super Thursday for some but a Topsy-Turvy one for others. Of course, much of that had to do with what side of the US dollar coin you were on.

Hope springs eternal for emerging markets anytime the US dollar weakens and yesterday was no exception. As indeed the stars aligned for emerging markets (EM) assets after an astonishing interest rate hike from the Central Bank of Turkey (CBT) of 625bp and an exceedingly soft US CPI data. And for beleaguered emerging markets, the timing could not have been any better as traders were coiled and ready to strike after the past fortnights of intense EM  bloodletting. Meanwhile, the BoE meeting proved a total non-event but the ECB, more constructive.

Not surprising, interbank EM currency volumes surged as a solidarity rally by proxy ensued, much to the relief of just about everyone quite frankly, as
US stocks pushed higher with the technology sector rebounding as participants took a more calming view of the US-China trade dispute while emerging market assets rallied on the weaker US dollar which supported a very bubbly risk environment.

Indeed, we could see this “risk on”shift that was set in play in early Asia yesterday extend throughout today’s APAC session. Mind you, chasing short covering rally can be fraught with danger.

With that in mind, let me do my best spoil the party by suggesting that much of this rally will depend on what level of diplomacy that can be reached from the US-China talks and if  President Trump is willing to fold a strong hand and not impose 200 billion in tariffs? But failing any progress on these fronts, the Pboc will be less incentivised to keep the RMB complex in check, and we could be in for another EM fracas if the Pboc guides the Yuan incredibly cheaper. And of course, there that small matter about rising US yields which generally sounds the death knell for EM currencies, but let’s leave that one alone until next week.

Oil Markets

Topsy Turvey Thursday indeed!!

Oil futures markets gave back Wednesday’s gains, but there must be more to it than a realisation that last weeks inventory reports included a significant increase in product inventories that more than offset the US crude inventory draws. That’s second nature for the Willey oil trading community, so the issue does run deeper Specifically, those same Willey veterans latched on to International Energy Agency report which indicated daily crude-oil output in the Organization of the Petroleum Exporting Countries climbed in August by 420,000 barrels a day, to average 32.63 million a day.

So, while the anticipated production drought from Venezuela and Iran could be an issue in the future, it’s not an imminent one as OPEC total crude production came in the right on top of estimates and triggered a bearish correction on both WTI and Brent prompt contracts.

So, in a nutshell, the market came off aggressively as Crude Oil supplies are not tight, well not yet anyway. But when you look at in the context that EM countries crude demands are at risk from an economic slowdown( tariff impact) coupled with the sturdy supply report, there are some concerns that increases from OPEC and non-OPEC producers can offset the Iran sanction concerns.

Gold Markets

A convincing snap in the  XAU-DXY  correlation overnight suggesting that the de-escalation in US-Sino trade dispute is having a calming effect on overall risk, and despite the dollar trading considerably weaker after the soft US CPI data, the tight correlation snapped.

Of course, from a hedger perspective, the focus has been on US equities as opposed to the US dollar so with global equities back on the boil there is little demand for gold in general. At the heart of the matter, ETF flows remain stagnant, and gold continues to be little more than a dead money trade at this point.

But the enormous tail-risk remains in play as when dollar strength return sand that tight XAU-DXY  correlation will come back with a vengeance with a high degree of certainty.

Currency Markets

Oh my, what a carry!!

The CBT set the one-week repo to an astonishing 24%! (+625bps) And that sigh of relief you heard out of Japan, was from Tokyo’s fervent carry traders who now have 24% annualised wiggle room to manoeuvre. We did see more TRYJPY buying this week than average, so there will be more than a few happy Japanese investors this morning especially after being nearly toppled when USDTRY rose more than three per cent yesterdy on President Erdogan who was bizarrely advocating for a rate cut.

And as expected on this decisive policy shift, it has triggered concurrent relief rally across EM.

EURO
Draghi was steady on headline inflation but a tweak in the core which is easily interpreted in the less dovish context that the ECB does expect inflation to concenter at its target as monetary accommodation is reduced at the fringe. A bit of a tough pill to swallow for EUR bears but, price action must be respected, and with US CPI providing little relief for the nascent dollar correction, I suspect the EUR bears will remain sidelined until more definitive signals emerge.

Australian Dollar
Price action was telling as indeed short position was much cleaner after the yesterday’s short Aussie squeeze, so we didn’t get that outsized reaction on positive EM development nor the weaker US CPI print that many had expected. But since we get to do this all over again next week, “Prudence”, suggests its time for the sidelines and to fight another day.

Malaysian Ringgit

Regional risk should trade positively today, suggesting the MYR will be mildly supported, but with Oil prices falling overnight, it will likely balance out the EM solidarity knock-on effect from the astonishing 625 bps CBT rate hike, so we could expect the MYR to trade neutral bias given the mixed signals.

Gold shines as the dollar fades

– Gold prices on Thursday held steady near a more than one-week high hit in the previous session, with hopes for a new round of U.S.-China trade talks weighing on the dollar.

Gold prices have fallen nearly 12 percent since a peak in April amid intensifying global trade tensions and under pressure from rising U.S. interest rates.

Higher rates make non-yielding bullion less attractive, and tend to boost the dollar, in which gold is priced.

“Gold is trading entirely on the mercy of the U.S. dollar … to judge gold by any other metric in this environment provides an indecisive, inconclusive and highly inconsequential signal,” said Stephen Innes, Asia-Pacific trading head for OANDA.

 

Reuters

Channel one’s confidence

Channel  one’s confidence

USDJPY and Emerging markets traded with a more positive tone overnight, although EM is hardly out of the weeds just yet, as US equity markets ignored a shaky start to finish higher on the day led by energy and telecom sectors.

When the S&P markets rally in the face of higher global yield and a slightly steeper US yield curve, only good should come out of this for investors. Indeed, this price action does suggest we could be in for a bullish extension in US equities over the near term. The buoyant US markets continue to benefit from the run of very robust US economy and should continue to do so as the US economy is firing on all cylinders. Forget that September blues nonsense the markets are readying to take off again!!

Oil Markets

The combination bullish market calls, Iranian sanction developments, preparation for Hurricane Florence were all positive for oil prices overnight and the API data added to the momentum in late NY trade.

The American Petroleum Institute figures for the week ended September 7 showed a much larger-than-expected 8.6 million barrels and WTI had reacted positively to the release on this relatively dramatic decline versus analyst’s expectation. Even Cushing which everyone was fretting about early in the week due to pipeline bottlenecks showed a decrease of -1.17 million barrels.
But the survey did show larger-than-expected 5.8 million barrels build in distillate inventories and a larger-than-expected 2.1 million increases in gasoline stocks. So, we see the drop in crude stocks offset by rising oil products suggesting inventory runs are high.

So, the modest uptick in WTI prices on the headline remains in line with the change in total petroleum inventories.

But energy markets have been supported overnight as there was much more focus on Hurricane Florence than markets had priced in, indeed a case of batten down the hatches along the Colonial Pipeline.

But its Brent that continues to drive sentiment as the premium to WTI has widened out to more than $10 per barrel as concerns of potential supply outages on the back of reduced Iranian imports are driving the global benchmark higher while WTI has been held back by the prospects seasonal builds ahead of the maintenance period.

The Iran sanctions are the most dominating driver and will continue to be so, but with the Whitehouse hawks circling above, the administration issued a stern warning that US will hold Iran accountable for any attacks by proxies in Iraq that cause injury to Americans or damage to US facilities. So again, the middle east risk embers are smouldering and reading to ignite. Typically, escalation and provocations in the Middle East tend to push prices higher, so worth watching this development.

Gold Markets

Gold caught a remarkable strong tailwind overnight as hedgers were in covering possible tail risks prospects for escalating U.S.-China trade tensions. But those constantly smouldering Middle East embers could ignite into raging geopolitical firestorm after the Whitehouse warned that if Iran or their proxies threaten any American assets in the region, there will be a severe price to pay.

However, higher US yields should remain US dollar supportive and does continue to suggest upticks to $1200 will stay fleeting as gold bears will add to shorts at this crucial level. But it will be Thursday’s US CPI and Friday’s retail sales data that will provide the next big test for this bearish theory.

Asia Markets
South Asia market risk is an entirely different kettle of fish, and “when in doubt stay out” as there are few clear-cut risk decisions on the back of the looming China tariffs, tech sector woes and likely slowdown in China. One look at the Hang Seng price action should be enough to scare even the most prominent contrarians.

However, Emerging Market moves are less idiosyncratic and becoming more a function of global risk sentiment. Which is encouraging as we could see all regional markets, even those under extreme currency pressure could benefit immensely from the subtle optimism around global trade disputes being resolved. But its a matter of how to channel one’s confidence in the appropriate manner in these under-owned conditions based after the recent waves of regional capital outflows. Be nimble!!

Currency Markets

Canadian Dollar
Patience is a virtue and even more so when trading the Canadian dollar which is best done from a playbook. The Loonie is still at the negotiating table but with US President Trump saying the talks are going “very well. The latest Reuters headline suggesting Canada is ready to offer limited access to the Canadian dairy market to the US as a concession. Goodwill concessions are apparent, and the Canadian Dollar has reacted favourably, and as we get down to the nitty-gritty and on any trilateral NAFTA announcement, the USDCAD could drop to the low 1.29’s in a heartbeat, but in the meantime, we could be in for more stop and go on headline risk.

Australian Dollar

Not too unexpected the AUDUSD is putting up a staunch defence at the .71 levels but this could be little more than due oversold conditions as some traders are looking to play a contrarian’s hand as any weakness in US data could see a much greater outsized move on short squeeze than sell off on reliable data. I try to avoid this type of “fools logic “, but it does play a part in the thought process, but with NAB business confidence falling to a two-year low compounding all the negatives from last week, I fully expect the Aussie to bleed from a differential perspective alone with a test of .7000 in the offing. If not for the reprieve from trader’s insatiable demand from buying USDCNH overnight, we could be trading nearer the .7075 levels today in my opinion.

The Euro
The biggest issue is we seem to be doing the same thing over and over. And the EURUSD is doing little more than testing the near-term ranges. Participation is predictably low as the EURUSD remains mired in the ” no trade zone” straddling the 1.1600 level.

Japanese Yen
We should test the 112.00 if risk remains intact, but the big question is, however, do you want to own USDJPY risk at this level. Risk sentiment is turning positive every so gradually while US yields continue to move higher, we could push through that 112.00 on a positive CPI print.

EM

South African Rand

Nothing like a ZAR rally to signal the market has turned on the risk lights back on. Although the test of 15.00 was faded, the market has been holding on these gains on the back of this week positive Brexit headline. Former colonies have enjoyed favourable terms trade with the UK, and Brexit progress will be viewed in a favourable light.

The Malaysian Ringgit

Trade wars are one of the most significant regional factors, and while an escalation will negatively impact the MYR, the currency is much better insulated from terms or trade shifts other ASEAN countries will feel due to Oil exports. Next to that is the negative impact of higher US yields. So, expect the market to open mixed today with US Treasury yields higher, and trade war fears still front and centres.

Dumping Risk or panic attack?

Dumping Risk or panic attack?
Risk sentiment has gone in the tank on the continued rhetoric around Trump’s scheme to raise China tariffs to 25% instead of 10% with China claiming they will retaliate.
Global equities have buckled while commodities like copper, oil and soybeans are feeling the pinch from escalating tensions.
Oil Markets
Oil prices were struggling to gain traction on the back of July production numbers from Saudi and Russia, higher domestic inventories and Saudi Aramco’s decision to slash costs on September deliveries in an attempt to sell more barrels are contributing to the bearish mode.
 However, prices are have turned higher in early NY indicating a high degree of pliancy in the face of supply concerns. The move could be little more than hedging possible Strait of Hormuz weekend tail risk, but with S &P trading higher, Oil prices could be taking their cue for lightly better US equity risk sentiment.
Gold Markets
The precious space continues to be uninspiring with gold climbing to $1,221 overnight and lasts unchanged around $1,214, trading in just a $7 range, but longer-term value investors likely see opportunities on this move to $1200 to hedge capital market tail risk possibilities.
Equity Markets
Asia equity markets were smacked mercilessly overnight on the retaliatory comments from China. The Nikkei fell over 1% and gave back yesterday’s gains while China shares fell over 2% on both the Hang Seng and the SHCOMP
Also, a slightly more hawkish lean from the Fed has not endeared itself to global equity investors.
However, in early trade, US investors are in bargain hunting mode with Apple shares leading the charge, but the big questing is this the bulls last gasp before full-out bear mode takes control.??
 
Currency Markets
On currency markets, the Yuan depreciation has announced it’s self again as the go-to spot to expresses trade war bias. USDCNH is back to new highs at 6.87, not too surprising given the increased trade tensions.  While the JPY has strengthened as it’s starting to reaffirm itself one again as a critical risk correlation plays in G-10
The Dollar has ripped higher against both G-10 and EM currencies with Asia markets particularly sensitive getting peer pressure from the weaker RMB complex which remains at the epicentre of currency trade. But it’s not just trade data weighing on the Yuan sentiment, but the latest run of China economic data has been less than stellar playing into USD vs CNY policy divergence.
JPY: Post BoJ long USDJPY positions are giving way as risk aversion is settling in.
GBP: The Pound initially cratered after the BoE .25 % rate hike which had a decidedly one and done feel about it. But with central forecast thoroughly conditional on a smooth Brexit process, there remains a high level of uncertainty around the UK rate hike trajectory. Suggesting the GBP is still bearish post-BOE
MYR: Regional risk aversion, melting regional equity markets, a more hawkish Fed and slippery oil prices have proved to be a toxic elixir for Ringgit sentiment.

Risk on as US and Europe avert trade battle

Trump/Juncker meeting has results

European Commission President Jean-Claude Juncker did not come away from Washington empty-handed. The two presidents reached an accord which included expanding imports of US liquefied natural gas and soybeans while reducing industrial tariffs on each side. Previously, Trump had threatened to impose a 25% tariff on imports of European cars. If Europe can do it, how about China? That will be the next question on everyone’s lips.

The news came late in the session and helped Wall Street to a stronger close after struggling for most of the session. Boeing and AT&T were drags after disappointing earnings. The US dollar retreated across the board, losing almost 1% versus the Canadian Dollar and touching its lowest level in six weeks.

USD/CAD Daily Chart

Source: Oanda fxTrade

Oil rises on stockpiles drawdown

Data released by the Energy Information Administration showed a larger than expected drawdown on crude inventories in the week to July 20. Estimates suggested a drawdown of 2.33 million barrels however a total of 6.15 million barrels were required. This drawdown more than wiped out the 5.84 million barrels added to stockpiles the previous week.

Source: MarketPulse

ECB in focus on the data calendar

All eyes will on the ECB rate meeting and subsequent press conference today. Not that there are any expectations for any shift or tweak in policy but, as Craig points out, it can sometimes be painful to ignore any central bank meetings, particularly the ECB.

Will ECB offer any surprises on Thursday?

The rest of the calendar is populated with US goods trade balance for June, with the deficit seen widening to $67.0 billion from $64.85 billion. Recall, China’s trade surplus ballooned to a record surplus in the same month, according to data reported earlier this month. Other items include US wholesale inventories and durable goods orders.

There is also a seven-year US note auction which, if yesterday’s five-year auction was an indicator, should be well received. The five-year auction drew a bid-to-cover ratio of 2.61, up from 2.55 at the previous auction and above 2.49 over the past 12 auctions. The five-year yield edged up to 2.815% from 2.719%.

You can see the full MarketPulse data calendar at: https://www.marketpulse.com/economic-events/

Live FX Market Analysis – 24 July 2018

In this week’s FX webinar, Senior Market Analyst Craig Erlam discusses the latest events that are moving financial markets – Trump attacks the Fed, Brexit plans widely criticized etc – and previews the week ahead.

Craig also gives his live analysis on EURUSD (9:22), GBPUSD (11:48), EURGBP (18:45), AUDUSD (19:34), USDCAD (21:04), GBPCAD (22:14), NZDUSD (23:31), USDJPY (24:38), GBPJPY (27:41) and EURJPY (29:09).

Trade ,earnings ,teapots and the US dollar

Trade, earnings, teapots and the US dollar

Strong domestic growth and on-target core inflation continue to suggest the US economy is in that happy place,  but this week’s US economic data will begin to shape market expectations for Q2.

And equally significant will be Fed Chair Powell’s semi-annual monetary policy testimony before the Senate Banking (Tuesday) and House Financial Services (Wednesday) Committees. We should expect Powell testimony to reflect the minutes of the June 13 meeting broadly. But members did note the increased risk to their base economic outlook from trade wars, but since then, President Trump has tabled a review of tariffs on $200billion of additional goods from China. But of course, this escalation was widely telegraphed by the Trump administration, which suggests the FOMC trade concerns were based on the 200 billion in trade war escalation anyway.

However, the new tariffs would not be put in place before the end of August and could be even further kicked down the road as the US and China seek to a secure a lasting bilateral trade based on freer and fairer policy.

But, should the US eventually move ahead with these tariffs, China could not escalate on an even basis given China only imports roughly 130 billion annually from the US suggesting they would either need to levy higher trade tariffs on a small number of selected products or take the least attractive measure of tactically weakening the Yuan. Hence the lack of immediate response from China, as administrators will be ultra-careful not to send the wrong signal triggering another market melt in China.

One does get the sense that investors believe this latest threat from Trump will bring back both parties to the negotiating table and yield some form of compromise.

Economic Union ( EU) chiefs Jean-Claude Juncker and Donald Tusk will take their anti-Trump trade roadshow to China and Japan hoping to preserve some semblance of free trade world order. And as opposed to Trumps fire and fury style of negotiation, there’s excepted to be fewer fireworks although the EU leader will press China for free access to China markets while discussing Chinas propensity to dump cheap steel on EU markets.

But absent continued headline risk from trade war this week, desk noise should be a few decibels lower, but it will be far from a walk in the park, with the Trump-Putin still tentatively set for Monday despite Friday “coincidental” set of indictments of 12 Russian military intelligence in Mueller gate. While this isn’t great news for the US-Russian relations unless the citations reveal an actual smoking gun,  don’t expect too much to be focused on this despite the abundance of partisan political posturing.

US markets

What trade war? It is clear as a bell the US economy is on fire. Soaring business confidence and corporate tax cuts are fuelling surging company profits, but more significantly for the prolonged effect, Americans are returning to the works force end masse.

So, despite all the trade war bluster, US markets continue to grind higher, even with numerous trade headwinds. Indeed, the only thing unlucky about Friday the 13th was for equity market bears.

But earnings season is always a bit of a wildcard, and with investors hoping for a  contiued buying binges. They could be a bit disappointed given that sentiment continues to run at peak optimism, even more so, if markets start dialling in more trade war pessimism to the calculus.

Indeed, this week’s key US economic data will be so crucial in shaping investor expectations for Q2, especially around the retail sales data.

Among the companies due to report are Bank of America, Goldman Sachs, Johnson & Johnson, Morgan Stanley and Microsoft.

Oil markets

The oil market consolidated into the weekend as traders were still rehashing the myriad of developments which saw prices head sharply lower last week. The reported increase in Libyan crude oil production was perhaps the most significant fundamental eye-opener of the week, but then Russian Energy Minister Alexander Novak chimed in about a possible supply increase and then stated Russia might swap goods for Iranian oil, a move that would severely dent the impact of US sanctions.

Also, the decline in China’s crude oil imports for June raised a few eyebrows on Friday and did weigh negatively on the demand side of the equation. But given that  China crude import numbers are highly volatile, the markets tend to sidestep a one-off print. But looking under the hood, Chinas crude imports fell -12.04% month on month to 34.35 m tons last month, its lowest level since December. Reduced imports were likely due to China ordering at least five independent refineries (teapots) in Shandong to cut run rates ahead of the Shanghai Cooperation Organization (SCO) summit to be held the port city of Qingdao on June 9-10. So, it possible the teapots will gear up again on additional quotas.

Despite last week’s plethora of bearish signals Oil prices rallied towards $71.50 during Friday’s  New York session, but the rally was cut short by media headlines suggesting ” “The Trump administration is actively considering tapping into the nation’s emergency supply of crude oil as political pressure grows to rein in rising gasoline prices before the mid-term congressional elections”

While trade war rhetoric should subside this week and could be a possible plus for oil prices, with the Trump administration actively considering tapping into the nation’s Strategic Petroleum Reserve, it could weight negatively on trader’s cerebral side of the oil price equation.

Gold Markets

The precious space continues to hold critical support at $1,240, but the gold complex remains under pressure. US equity markets continue to trade well triggering few if any defensive allocations into Gold as ETF flows have remained muted lately. With sluggish demand for precious metals and the USD on solid footing, gold prices will stay pressured lower for the foreseeable future as gold has wholly lost its glittering appeal in this enduringly bullish equity and USD environment.

Currency Markets

JPY
Massive move in USDJPY last week which caught everyone flat-footed given the volumes turned and the breadth of the movement. The break above the yearly highs does suggest this move has more ways to run although during Friday trade flows were much more balanced perhaps reflecting the softer Michigan Sentiment index and the negative US political fallout for Mueller gate escalations. USDJPY is signalling the most significant break out in years, and the long USDJPY is a position severely under-owned which suggests the pair will explode higher on any positive news. One can only imagine spot will trade if an intense wave of risk on kicks in or trade war fizzles out.
Only a week ago we were lamenting on how UDJPY was the low beta range trade so what the heck changed. For one, equity markets are surging, 2 year US yields are moving higher, but that only paints a corner of the picture.

1) There is the fair value argument that USDJPY is undervalued supported by interest rate differentials

2) Trade war fears are good for the US dollar because it could shrink the trade deficit when they become competitive enough. Primarily, if the Trump administration puts the automobile tariff in practice, it will exert a fatal blow to Japan’s economy and an already weakening trade balance, which will act as a JPY negative eventually.

3) Japanese institutional investors are increasingly looking outward for investment particularly in the US. And as well are not hedging full returns. The how the notion of Japanese investors repatriating when global risk rises are diminishing.

4) The old FOMO as traders move from what’s not to what’s hot. But arguably this position is under-owned with many structural risks off long JPY still in play, so a push into the 113 could trigger a significant extension of the current rally as more risk off hedged unwind, and more traders become believers.

MYR and the knock-on effects of the Yuan

The perfect storm of negatives saw the USDMYR predictably take out the 4.05 level on Friday trade. Despite the KLCI trading in the green while tracking local burses higher as risk sentiment recovered on Friday, the local currency unit didn’t fare so well. Despite the obvious political overhang from IMDB investigations and political and fiscal uncertainty weighing negatively for the Ringgit. The USD started to reassert itself, and when coupled with increasingly bearish signals from the oil patch, the market was prone to a selloff. But even worse when the $Asia shows sings of recovering, the Ringgit continues to lag the moves.

In addition, the RMB complex continues to set the pace of play in regional currency markets and besides the daily risk YO-YO on equity markets taking its toll on regional sentiment, with the Pboc weighing possible policy options around mainlands economic slowdown, this uncertainty is having a negative knock-on effect in local currency markets.  Uncertainty around policy, trade and retaliation will keep the riks reward needle skewed negatively for the Yuan near-term.

Live FX Market Analysis – 10 July 2018 (Video)

In this week’s webinar, Senior Market Analyst Craig Erlam discussed the latest Brexit developments as two members of her team resign after an apparently united and productive meeting on Friday. He also talks Trump, after the latest imposition of trade tariffs and ahead of his trip to the UK and the NATO summit, and previews the week ahead.

Craig also gives his live analysis on EURUSD (12:20), GBPUSD (15:03), EURGBP (17:50), AUDUSD (19:35), USDCAD (24:12), GBPCAD (26:19), NZDUSD (28:31), USDJPY (30:22), GBPJPY (32:25) and EURJPY (34:52).

GBP/USD – British pound steady on modest GDP growth

USD/JPY – Japanese yen dips to 7-week low, inflation reports next

Commodities Weekly: Gold saved by dollar’s retracement