On the last trading day of the week, ambiguous news on the US-China trade talks and a possible overnight settlement translated into an optimistic Asian trading atmosphere. Due to the lack of detail on trade trends and increasing uncertainty, the FX markets are left in a tizzy. Several majors then kept narrowing trade ranges as the US dollar sustained its new decline against its main rivals.
Between many Asia-PAC currencies, the USD / JPY pair traded around a steady climb near 108.60 despite a three-week lows bounce in Asian stocks, while Aussie's multi-day lows recovery was limited by the 0.68 handles.
Just ahead of the 0.64 handles, the Kiwi also posted small gains. In the middle of a decline in oil and the lackluster trade in gold prices, the Antipodeans had little follow-through on the upside. Positive yields from the treasury kept the yellow metal under control.
Markets are ready for a big day soon, with information on the operation of the international manufacturing industry to lead and shed new light on the state of the world economy. The final update of the German Q3 GDP, falling at 0700 GMT, is first on the EUR calendar. Releases of the Eurozone Markit Preliminary Manufacturing and Services PMI will begin seeping in from 0815 GMT, with the key German and Eurozone reports due respectively at 0830 GMT and 0900 GMT.
Markit's new UK flash PMI readings from Manufacturing and Services will be closely watched at 0930 GMT. Meanwhile, the speech by the new ECB President Lagarde, as she is scheduled to make her first political address at the European Banking Congress in Frankfurt, scheduled at 0830 GMT, which is likely to steal the show.
We also have a packed NA meeting, with Weidmann's, the ECB Governing Council member, speech and data from Canadian Retail Sales falling open in front of the US. The US Markit Preliminary Production and Services PMI data will later be released at 1445 GMT, accompanied by the US Michigan Consumer Sentiment Index at 1500 GMT. Baker Hughes oilfields services company will release data from the U.S. Oil Rigs Count at 1800 GMT in the American mid-morning.
Following an eventful Friday docket, events related to trade in the US-China are likely to undermine and continue to steer risky movements as we wrap up a controlled week of data-light yet cautious-trading.
Tags : Asia-PAC currencies, FX markets, USD / JPY pair trade, Eurozone Markit Preliminary Manufacturing,