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수요일, 9월 19, 2018

Cable keeps trading on a positive note and extra gains are not ruled out in the near term, noted FX Strategists at UOB Group. Key Quotes 24-hour vie

Cable keeps trading on a positive note and extra gains are not ruled out in the near term, noted FX Strategists at UOB Group.Key Quotes24-hour view: “We highlighted yesterday “there is scope for GBP to move above the strong 1.3165/70 level but prospect for a break of the next resistance at 1.3215 is low”. In line with expectation, GBP broke above 1.3165/70 albeit marginally as it hit a high of 1.3173. While upward momentum remains lackluster, GBP could continue to grind higher but a clear break of 1.3215 would come as a surprise. Support is at 1.3135 but only a break of 1.3100 would indicate that a short-term top is in place”. Next 1-3 weeks: “We have held the same view since last Tuesday (11 Sep, spot at 1.3025) wherein we expect the rebound in GBP to extend to 1.3170. GBP finally reached this level as it touched an overnight high of 1.3173. As highlighted earlier yesterday (18 Sep, spot at 1.3150), while the advance in GBP is approaching overbought, there is no sign of weakness just yet and there is scope for further strength towards the next major level of 1.3215. This is a relatively strong resistance and a break of this level would be a good indication that GBP could continue to advance in the coming days. On the downside, the ‘key support’ is currently at 1.3045, higher from 1.3000 previously”.

The stance on the Aussie Dollar remains bid in the near term, aiming to test 0.7320 vs. the greenback, suggested Karen Jones, Head of FICC Technical A

The stance on the Aussie Dollar remains bid in the near term, aiming to test 0.7320 vs. the greenback, suggested Karen Jones, Head of FICC Technical Analysis at Commerzbank.Key QuotesAUD/USD is bid very near term. We would allow for recovery towards the 55 day ma at .7320 and we will need a close above here, and preferably above the 2018 channel at .7379, to confirm a short term reversal”. “We note that the market has eroded the May and December 2016 lows at .7161/46. However we also note that this break lower has not been maintained – and we are beginning to suspect a false break lower”. “Below the .7085 recent September low should be enough to open up the path to .6827 the 2016 low”.

European Monetary Union Current Account s.a: €31.9B (July) vs €28.5B

European Monetary Union Current Account n.s.a registered at €21B, below expectations (€22.4B) in July

EUR/USD daily chart               Daily high: 1.1706 Daily low: 1.1653 Support Levels S1: 1.1565 S2: 1.1609 S3: 1.1638 Resistance Leve

The pair remains bid so far this week and should keep intact its chances of a test of, initially, the 1.1745/50 band of 1.1790.A surpass of this area should pave the way for a continuation of the up move to June’s peak at 1.1853.The constructive bias in EUR/USD is expected to remain in place as long as 1.1508 underpins.EUR/USD daily chart              Daily high: 1.1706 Daily low: 1.1653Support LevelsS1: 1.1565 S2: 1.1609 S3: 1.1638Resistance LevelsR1: 1.1710 R2: 1.1754 R3: 1.1783

South Africa Consumer Price Index (MoM) below expectations (0.15%) in August: Actual (-0.1%)

South Africa Consumer Price Index (YoY) below expectations (5.2%) in August: Actual (4.9%)

Analysts at Nomura suggest that for the UK markets, the focus will be on the release of August CPI and PPI data to gauge the overall strength of the e

Analysts at Nomura suggest that for the UK markets, the focus will be on the release of August CPI and PPI data to gauge the overall strength of the economy.Key Quotes“We expect a small fall in inflation from 2.5% to 2.4% in August. This would be the same as the BoE’s estimate, though the MPC had expected inflation to rise to 2.6% in July which would have implied a 0.2pp fall (rather than a 0.1pp fall based on July’s actual outturn). RPI surprised on the downside in July on a narrowing of the RPI-CPI wedge. We assume that a partial reversal of this narrowing in August will raise RPI inflation to 3.3%, from 3.2%.” “Producer prices, Aug: Input prices look set to rise modestly due to the inflationary effect of a fall in GBP in August (down over 2% vs. USD and 1% vs. EUR) being only partially offset by a decline in commodity prices. The combination of still-elevated output price readings in the surveys and higher petrol prices will, we believe, push headline output prices up by 0.3% during the month (0.2% core).”

Markets have so far shrugged their shoulders over the recent escalation of trade war between the US and China and decided to rally, points out the res

Markets have so far shrugged their shoulders over the recent escalation of trade war between the US and China and decided to rally, points out the research team at Deutsche Bank.Key Quotes“Over the last 36 hours we have now seen the US announce tariffs on $200bn of Chinese exports to the US – with the potential for more – and China retaliate with the announcement of tariffs in the range of 5-10% on $60bn of US imports.”“Various theories did the rounds yesterday as to why risk assets have rallied in response to the escalation with the consensus being that it was mostly in line with what was expected. Also noteworthy was the Chinese government yesterday announcing a boost to infrastructure investment growth. Meanwhile with the US administration also suggesting that the tariff rate won’t be lifted to 25% until next year, there’s perhaps also some hope that negotiations could resume between the two governments and therefore some sort of agreement reached to walk back on the tariffs.”“In any case the next move is clearly crucial, particularly if the US administration acts upon China’s move by introducing tariffs on the remaining $267bn of Chinese exports to the US. You also can’t rule out the possibility of China going down the non-tariff route given the limitations on how much tariffs they can apply.”  

   •  Short-covering helps stage a goodish recovery from 1-1/2 month lows.    •  Brexit optimism might continue to underpin GBP and cap any runaway r

   •  Short-covering helps stage a goodish recovery from 1-1/2 month lows.
   •  Brexit optimism might continue to underpin GBP and cap any runaway rally.
   •  Today’s key focus will be on the UK inflation figures and informal EU Brexit summit.
After an initial dip to 0.8865 area, or 1-1/2 month lows, the EUR/GBP cross staged a modest rebound but remained below the 0.8900 handle ahead of the UK macro data.  The cross stalled overnight sharp retracement slide from levels just above the 0.8900 handle and managed to find decent support near 100-day SMA. The uptick lacked any obvious fundamental catalyst and could be attributed to some short-covering ahead of today's key UK inflation figures.  The headline CPI is expected to tick lower to 2.4% y/y from 2.5% previous. Any positive surprise would be enough to trigger a fresh leg of up-move for the British Pound and continue exerting downward pressure on the cross.  Meanwhile, growing optimism over a possible EU-UK deal to avoid a hard Brexit should help limit any immediate sharp downside for the British Pound and turn out to be one of the key factors keeping a lid on any runaway rally.  Hence, the key focus will remain on the upcoming informal EU summit in Salzburg on Wednesday and Thursday, which might now play a key role in determining the next leg of a directional move for the Sterling.Technical levels to watchImmediate resistance is pegged near the 0.8900-0.8910 region, above which the momentum could further get extended towards 0.8935 supply zone. On the flip side, the 0.8865 area (100-DMA) might continue to protect the immediate downside and is followed by the very important 200-day SMA support near the 0.8835 region.
 

Analysts at Danske Bank point out that the Chinese government yesterday responded to the 10% tariff imposed by the US by announcing retaliatory tariff

Analysts at Danske Bank point out that the Chinese government yesterday responded to the 10% tariff imposed by the US by announcing retaliatory tariffs of 10% on USD60bn worth of US goods.Key Quotes“Moreover, the Chinese Ministry of Commerce said that it has filed a complaint with the WTO over tariffs imposed by the US. In addition, China's Premier Li Keqiang said he will not let the currency devalue to stimulate exports. Hence, China's strategy right now appears to be to respond to US measures but without escalating tensions.” “Risk markets seems to have shrugged off concerns about trade tensions and the rally in global equity markets has extended this morning led by Japanese and Chinese markets . The positive reaction in risk markets likely reflects that the actions from both the US and China have been less aggressive than initially feared. Markets will continue to focus on the US-Chinese trade war and there is clearly a risk that tension will escalate further.”  

Somasundaram PR, Managing Director of the Indian operation at the World Gold Council, warned the Indian government against tampering with its gold imp

Somasundaram PR, Managing Director of the Indian operation at the World Gold Council, warned the Indian government against tampering with its gold import duty or imposing other restrictions to support the Rupee, as the yellow metal was “not at the center of the current account deficit issue”, Reuters reports. This comes after an Indian government document suggested that the Indian steel ministry is considering raising the import duty on steel to 15% in an effort to support the local currency.

According to analysts at Nomura, it is clearly premature for the SNB to start tightening and expect the SNB to keep its two pillar policies, preparedn

According to analysts at Nomura, it is clearly premature for the SNB to start tightening and expect the SNB to keep its two pillar policies, preparedness to intervene and negative policy rates, firmly unchanged.Key Quotes“Marked-to-market changes in the inflation forecast would lead to a higher near-term inflation forecast, but the SNB is likely to keep its mid-term projection unchanged, or it may even downgrade its mid-term inflation forecast again.” “To avoid further CHF appreciation, the SNB will likely show a slightly more dovish stance in its statement.” “CHF is now trading at its strongest level against EUR after the SNB changed its assessment slightly last September. The BIS-based nominal effective exchange rate also shows strong CHF appreciation recently partly because of EM currency weakness. European currencies including CHF are not trading so strongly against USD and real based effective exchange rate appreciation is more muted as inflation is much higher in the EM economies. Thus, the SNB is unlikely to change its valuation this week – our main scenario. Nonetheless, a slightly more dovish tone in its statement is likely, even after positive inflation data.”

Former UK Brexit secretary, David Davis was out on the wires in the last hour, saying that we should not expect much from Salzburg meeting on Brexit a

Former UK Brexit secretary, David Davis was out on the wires in the last hour, saying that we should not expect much from Salzburg meeting on Brexit and the EU may pile on extra requests.Key quotes:   •  That means Theresa May will get a deal she cannot bring back to parliament.
   •  I'm not going to vote for PM May's Brexit deal in the parliament vote.
   •  The standard approach should be to wait until the last minute for a deal.
   •  Negotiations will get to a point where there will need to be a reset.
   •  The free trade deal is possible off the shelf.

Senior Analyst at Danske Bank Morten Helt noted the European cross faces further volatility in the next months stemming from the Brexit negotiations.

Senior Analyst at Danske Bank Morten Helt noted the European cross faces further volatility in the next months stemming from the Brexit negotiations.Key Quotes“Conclusion. Brexit negotiations are entering a critical phase and we expect EUR/GBP to remain very volatile and sensitive to Brexit news. We target 0.89 in 1-3M, with risks skewed on the upside in the very near term ahead of the annual UK Conservative Party Conference (30 September– 3 October), which in our view is an important hurdle and potential source of volatility, before the final Brexit negotiations. As such, a stretched short speculative GBP positioning and fairly neutral UK interest rates should help curb EUR/GBP upside potential butBrexit is set to be a key driver and stretched positioning is not an obstacle for a significant break higher in EUR/GBP if the likelihood of a ‘NO deal’ scenario increases”. “Longer term, we still expect EUR/GBP to trade lower eventually, driven by Brexit clarifications and fundamental valuations. We target EUR/GBP at 0.84 in 6M and 0.83 in 12M”.

According to FX Strategists at UOB Group, there is still scope for the pair to visit the 1.1790 level in the short-term horizon. Key Quotes 24-hour

According to FX Strategists at UOB Group, there is still scope for the pair to visit the 1.1790 level in the short-term horizon.Key Quotes24-hour view: “Expectation for EUR to ‘ease off’ yesterday was wrong as it broke briefly above last week’s 1.1721 peak. Upward pressure has waned quickly with the subsequent sharp and rapid pullback from a high of 1.1724. The current movement is viewed as part of a consolidation phase and EUR is expected to trade sideways for today, likely between 1.1640 and 1.1710”. Next 1-3 weeks: “EUR touched a 3-week high of 1.1724 yesterday before easing off and ended the day on a soft note (NY close of 1.1665, -0.15%). While we continue see chance for EUR to move towards the major 1.1790 resistance, short-term momentum is ‘struggling’ and EUR has to move and stay above 1.1700 within these 1 to 2 days or the prospect for further strength would diminish quickly. On the downside, the ‘key support’ remains unchanged at 1.1605 even though a break of 1.1640 would serve as an early indication that a short-term top is in place”.

Additional comments are crossing the wires from the BoJ Chief Kuroda, as he speaks at the post-monetary policy meeting press conference. BoJ still wa

Additional comments are crossing the wires from the BoJ Chief Kuroda, as he speaks at the post-monetary policy meeting press conference. BoJ still wants to achieve 2% inflation target as soon as possible.  There is no change to that commitment. Inflation has been picking up but CPI is still below target. Inflation is taking longer than expected to accelerate. Will not continue current unconventional policy if 2% target is met. Sees no need to change joint-statement with the government on inflation.

In view of Karen Jones, Head of FICC Technical Analysis at Commerzbank, Cable remains bid and could test 1.3214 ahead of 1.3363. Key Quotes “GBP/USD

In view of Karen Jones, Head of FICC Technical Analysis at Commerzbank, Cable remains bid and could test 1.3214 ahead of 1.3363.Key QuotesGBP/USD is bid following the erosion of key short term resistance offered by the 55 day ma at 1.3010 and the 23.6% retracement at 1.3066. The close above here targets the 1.3214 July 26 high and the 1.3363 9 th July high. A move above the 1.3363 July high would imply a deeper corrective phase to the 1.3473/1.3522 June high and 200 day moving average”. “We have a short term up trend at 1.2867 which maintains immediate upside pressure”.

The UK August CPIs Overview The cost of living in the UK as represented by the consumer price index (CPI) is due later on Wednesday at 0830 GMT. The

The UK August CPIs OverviewThe cost of living in the UK as represented by the consumer price index (CPI) is due later on Wednesday at 0830 GMT. The headline CPI inflation is expected to accelerate to 0.5% inter-month in August while the annualized figure is seen ticking lower slightly to 2.4%. The core inflation rate that excludes volatile food and energy items is also expected to have softened to 1.8% last month.Deviation impact on GBP/USDReaders can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 15 and 80 pips in deviations up to 2 to -3, although in some cases, if notable enough, a deviation can fuel movements of up to 120 pips.How could it affect GBP/USD?A positive surprise in the UK CPI figures is likely to offer the much-needed impetus to the GBP bulls, that could help the rates retest the seven-week tops at 1.3175, above which the upside targets lie at 1.3210 (daily R2/ Fib R3) and 1.3250 (psychological levels). On a bigger-than-expected drop in the headline and core readings, the GBP/USD pair could fall to the 100-DMA support at 1.3102 below which floors open up for a test of 1.3076 (d10-DMA) and 1.3026 (Sept 13 low).Key NotesUK: Slight downside risks for inflation data - TDS UK CPI amongst market movers today – Danske Bank GBP/USD Forecast: 100-DMA continues to cap ahead of UK inflation figuresAbout the UK CPIThe Consumer Price Index released by the Office for National Statistics is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchasing power of GBP is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally, a high reading is seen as positive (or bullish) for the GBP, while a low reading is seen as negative (or Bearish).

EUR/USD is now posting decent gains, eroding yesterday’s small pullback although a breakout of the 1.1700 handle till remains elusive. EUR/USD looks

The pair clinches tops around 1.1690 on risk-on sentiment.The greenback remains subdued in the mid-94.00s.ECB’s Mario Draghi due to speak in Berlin.EUR/USD is now posting decent gains, eroding yesterday’s small pullback although a breakout of the 1.1700 handle till remains elusive.EUR/USD looks to Draghi, tradeSpot is looking to consolidate in the upper end of the weekly range, although is still unable to break above the critical 1.1700 handle on a convincing fashion. The lack of traction and some exhaustion around the US-China trade developments has been weighing on the buck in past sessions despite the pick up in yields of the key US 10-year note beyond the psychological 3.00% handle. Later in the session, President Draghi is due to speak in Berlin at an event entitled ‘Making Europe’s Economic Union work’. Across the pond, Building Permits, Housing Starts and Q2’s Current Account figures are due ahead of the EIA’s report.EUR/USD levels to watchAt the moment, the pair is up 0.09% at 1.1675 and a breakout of 1.1724 (high Sep.14) would open the door to 1.1745 (high Jul.31) and finally 1.1792 (high Jul.9). On the other hand, the next support lines up at 1.1634 (21-day SMA) followed by 1.1526 (low Sep.10) and then 1.1508 (low May 29).

In view of analysts at Nomura, suggest that the recent measures announced by Indian government to stabilise INR were underwhelming. Key Quotes “If o

In view of analysts at Nomura, suggest that the recent measures announced by Indian government to stabilise INR were underwhelming.Key Quotes“If overall global market conditions remain negative (regardless if driven by rising trade protectionism, a break higher in US yields, Middle East tensions etc.), we believe USD/INR could rise through recent highs (of around 72.915) and trade towards 74.00.” “That said, the risk of further actions following last weekend’s economic meeting between the prime minister, the finance minister and the central bank governor has risen, especially if INR underperforms/depreciates significantly on an idiosyncratic basis.” “While the risk of further actions would rise if spot USD/INR continues to test new highs, we see space for the Reserve Bank of India (RBI) to step up its FX USD selling intervention.” “We estimate there was around USD3.6bn of net selling in August (USD/INR 3.6% higher in the month), which still represents a significant slowdown from the April-June period.

   •  Investors looked past the escalating US-China trade tensions.    •  Fresh USD selling drives higher for the third straight session.    •  Bull

   •  Investors looked past the escalating US-China trade tensions.
   •  Fresh USD selling drives higher for the third straight session.
   •  Bullish commodities remain supportive of the momentum.
The AUD/USD pair built on its overnight strong up-move and touched 2-1/2 week tops, just above mid-0.7200s in the last hour. A combination of supporting factors kept pushing the pair higher for the third consecutive session on Wednesday. The market reaction to the latest escalation of the US-China trade spat turned out to be short-lived and was seen lending support to the China-proxy Australian Dollar. Meanwhile, the US Dollar struggled to preserve overnight recovery gains led by surging US Treasury bond yields, which coupled with a positive tone across commodity space, especially copper, providing an additional boost to commodity-linked currencies - like the Aussie. Today's strong up-move could further be attributed to some fresh technical buying following yesterday's bullish break through the 0.7200 handle. Hence, a follow-through up-move, possibly towards 50-day SMA, now looks a distinct possibility. Later during the early North-American session, the US housing market data - building permits and housing starts, will now be looked upon to grab some short-term trading opportunities.Technical levels to watchImmediate resistance is pegged near the 0.7270-75 region, above which the pair seems all set to aim towards reclaiming the 0.7300 handle (50-DMA). On the flip side, the 0.7225-20 region now seems to protect the immediate downside and is closely followed by the 0.7200 handle, which if broken might prompt some fresh weakness back towards 0.7150-40 strong horizontal support.
 

In the post-meeting press conference, the BoJ Governor Haruhiko Kuroda was noted saying that it is essential to continue current powerful monetary eas

In the post-meeting press conference, the BoJ Governor Haruhiko Kuroda was noted saying that it is essential to continue current powerful monetary easing and fewer ETF purchases in August doesn't mean a shift in policy.Key quotes:   •  Will maintain the low-yield environment for an extended period.
   •  Have maintained YCC policy, 10-year JGB yields target in this meeting.
   •  Japan's economy is expanding moderately and global growth is also continuing.
   •  Expects the domestic economy to keep expanding and foresees a positive economic cycle going forward.
   •  Too soon to assess effects from July changes on JGBs as summer period generally has less trading activity.
   •  Expects CPI to pick up towards 2% target.

Analysts at TD Securities suggests that the BCB will be rock steady at 6.50 today as the underlying inflation trends are nowhere near suggestive that

Analysts at TD Securities suggests that the BCB will be rock steady at 6.50 today as the underlying inflation trends are nowhere near suggestive that the BCB should be hurrying to hike rates.Key Quotes“Inflationary effects of the trucker's strike seems to have faded away and there is little if any pass-through on tradable or headline inflation, hence it will be difficult for the BCB to see reason to raise rates on the back of inflation.” “Nonetheless, market is pricing in the risk of a 25bp hike this week and more or less 50bps a meeting over the coming meetings. The market continues to price in too little a risk that rates remain on hold for at least another 5 months, making shorter-term rates (and BRL) look attractive, though political uncertainty remains a notable risk factor.”

FX option expiries for Sept 19 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1500 627m  1.1650 880m - US

FX option expiries for Sept 19 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1500 627m  1.1650 880m - USD/JPY: USD amounts 112.00 1.7bn

Analysts at Nomura note that China announced retaliatory tariffs of 5% or 10% on additional $60bn imports from the US, taking effect on 24 September i

Analysts at Nomura note that China announced retaliatory tariffs of 5% or 10% on additional $60bn imports from the US, taking effect on 24 September in reaction to the US tariffs.Key Quotes“Although President Trump took to Twitter and warned of more retaliatory measures against China around the same time Beijing’s action was announced, as of the time of this writing there has been no official statement released from the Trump administration on a threatened third tranche of tariffs on $267bn imports from China.” “Beijing’s announcement brings the total amount of US goods subject to Chinese tariffs to about $110bn. Importantly, China chose not to match the US tariff rate of 25% on $200bn imports, and set the rates at 5% or 10% instead. Thus, China’s retaliatory measures appear more measured and consistent with its restrained approach so far in dealing with China-US trade tensions.”

In today’s meeting, the Bank of Japan (BoJ) kept its monetary policy unchanged while the policy balance rate and the yield target on 10-year Japanese

In today’s meeting, the Bank of Japan (BoJ) kept its monetary policy unchanged while the policy balance rate and the yield target on 10-year Japanese government bonds was maintained at -0.1% and 0% (+/-20bp), respectively, notes the analysis team at Danske Bank.Key Quotes“The BoJ also maintained its forward guidance and left its asset purchases unchanged. The BoJ has clearly shifted to auto pilot mode after it announced some policy tweaks at the July meeting, and an unchanged signal from the BoJ today was fully expected. Hence, no reaction in USD/JPY or the Japanese fixed income market.” “PM Shinzo Abe is expected to win the LDP (Liberal Democratic Party) leadership election, which takes place tomorrow. The BoJ's aggressive stimulus has been an important pillar of 'Abenomics', and given that Abe will continue as PM for several more years, political support for the BoJ monetary policy is likely to remain intact. We expect the BoJ to keep its current policy intact until the end of 2019 at least.”

Analysts at TD Securities point out that UK inflation for August is released this morning, and they see slight downside risks, with core inflation fal

Analysts at TD Securities point out that UK inflation for August is released this morning, and they see slight downside risks, with core inflation falling from 1.9% y/y to 1.7% y/y (mkt: 1.8%) and headline falling from 2.5% y/y to 2.3% y/y (mkt: 2.4%).Key Quotes“Previously-announced energy price hikes in August and September will complicate the headline inflation picture somewhat, with risks skewed to the upside, though ultimately this will just be a timing issue.” “Pass-through from the weaker pound is abating, and we expect core inflation to hover near current levels for the remainder of the year. BoE Chief Economist Andy Haldane delivers a speech to mark the Central Bank of Estonia's 100th anniversary at 9am BST.”

Analysts at Danske Bank suggest that the release of UK CPI and global trade tensions in addition to the informal EU summit will be the key economic re

Analysts at Danske Bank suggest that the release of UK CPI and global trade tensions in addition to the informal EU summit will be the key economic release and events for the day.Key Quotes“Today and tomorrow, an informal EU summit is set to discuss Brexit and migration. At the summit, EU leaders could probably soften Michel Barnier's negotiation guidelines in order to make it easier to reach a withdrawal agreement in Q4. Media reports suggest another high level summit in the course of Q4 to finalise the Brexit deal.” “Markets will naturally focus on the likely retaliation measures from China in response to yesterday's announcement from President Trump adding tariffs worth USD200bn to the Chinese exports.” “We expect today's UK CPI inflation data to indicate a headline inflation decline to 2.3% y/y from 2.5% y/y in July, in particular because the impact of the GBP depreciation is fading. CPI core inflation is likely to have fallen to 1.8% from 1.9%.”

As reported by Reuters, further details are emerging following the summit held by North and South Korea, though plenty of details remain unclear and a

As reported by Reuters, further details are emerging following the summit held by North and South Korea, though plenty of details remain unclear and a lot of questions are being left unanswered.Key highlightsAlthough North Korea has unilaterally halted nuclear and missile tests, international inspections were still barred in May, drawing criticism of the small country; North Korea is apparently willing to allow nuclear experts from "concerned countries" to watch the closure of its missile engine testing site and launch pad at their Dongchang-ri facility, according to South Korea's Moon. North Korea has also reiterated its willingness to dismantle its main nuclear facilities in Yongbyon following a 'corresponding measure' from the United States, but what that move should be is unclear. Satellite photos of North Korea in recent months have shown that North Korea has continued to work on its nuclear programs in secret, at alternative facilities. North and South Korea have also pledged to make a joint bid for co-hosting the 2032 Olympic Games, as well as having pledged to work together at the upcoming 2020 Olympic Games in Tokyo, but sporting events are a far cry from upholding nuclear disarmament, and no timeline has been given for access to North Korean facilities, according to Melissa Hanham, a senior research associate at the James Martin Centre for Nonproliferation Studies: “I think we should take these steps as very positive, but remember that North Korea is still taking baby steps. We don’t have a timeline, and we also don’t have any guarantees about the larger nuclear and missile programs. Allowing inspectors to the (Yongbyon) site would be useful, but it depends how much they let them see and what instruments they are allowed to take.”  

New Zealand’s consumer confidence fell sharply in September as the Westpac-McDermott Miller Consumer Confidence Index fell by 5.1 points to 103.5 in t

New Zealand’s consumer confidence fell sharply in September as the Westpac-McDermott Miller Consumer Confidence Index fell by 5.1 points to 103.5 in the September quarter to its lowest level in six years, notes the research team at Westpac.Key Quotes“Households are particularly concerned about the outlook for their own finances and the general economy over the next year.” “This comes despite the Government’s Families package, which was initiated in July. This has presumably been outweighed by other concerns, such as rising petrol prices and cooling housing markets.” “These results present a challenge to our expectation that the economy will regain some momentum in the short term on the back of Government spending.” “Households’ inclination to save remains low.”

Switzerland’s State Secretariat for Economic Affairs (SECO) published its quarterly economic forecasts on Wednesday, with the key highlights found bel

Switzerland’s State Secretariat for Economic Affairs (SECO) published its quarterly economic forecasts on Wednesday, with the key highlights found below. 2018 economic growth seen at 2.9%; prior forecast 2.4%. 2019 economic growth 2.0%; prior forecast 2.0%. 2018 inflation seen at 1.0%; prior forecast 1.0%. 2019 inflation seen at 0.8%; prior forecast 0.8%.

The risk-on sentiment was the underlying theme in Asia this Wednesday, as the dust settles over the US-China trade war fears. The Asian equity markets

The risk-on sentiment was the underlying theme in Asia this Wednesday, as the dust settles over the US-China trade war fears. The Asian equity markets return to the green zone while Treasury yields clung to the overnight gains. The US dollar, however, failed to benefit from higher Treasury yields and offered support to most majors. The Aussie was the biggest gainer and tested the 0.7250 level, as the sentiment was lifted after the Chinese Premier Li said that China won’t devalue the Yuan to stimulate the exports. The Kiwi followed suit and regained the 0.66 handle. The USD/JPY pair was little changed on the BoJ’s status-quo and consolidated around 112.35. The Loonie was better bid amid hopes of the NAFTA deal and positive oil prices. Meanwhile, the GBP reversed the early spike to 1.3175 on Brexit headlines and consolidated near 1.3150 levels heading into the UK CPI release.Main topics in AsiaBrexit headlines coming through, pound piercing recent highs NZ: Q2 current account deficit widens to 3.3% of GDP – Westpac UK Prime Minister Theresa May: The EU must show goodwill for a Brexit deal China will use trade war with US to replace imports - state media China Premier Li: China won't devalue currency to stimulate exports BoJ leaves monetary policy unchanged BoJ leaves unchanged forward guidance on rates and economic assessment BoJ’s Kataoka dissents from view that inflation will accelerate toward 2%Key Focus aheadToday’s EUR calendar remains relatively busy, with the UK CPI report for the month of August to headline. The Eurozone current account and construction output data will be also published. The UK headline CPI is expected to come in a tad softer at 2.4% y/y vs. 2.5% previous while core figures are also seen lower at 1.8% y/y vs. 1.9% last. Meanwhile, the BOE Chief Economist Andy Haldane’s speech due at 0800 GMT will also remain in focus. In the NA session, the US housing data will be reported alongside the current account data at 1230 GMT, followed by the EIA crude stocks data at 1430 GMT. Besides, the ECB President Draghi’s speech will also grab a lot of eyeballs ahead of New Zealand’s Q2 GDP release at 2245 GMT. EUR/USD: Inverse head-and-shoulders breakout may remain elusive on rising US-DE yield spread The daily chart of the EUR/USD is flashing a bullish reversal pattern, but a breakout may remain elusive, as the bond yield differentials are rising in the EUR-negative manner. GBP/USD sticking to recent highs ahead of UK CPI reading Pound traders experience some much-needed relief on Brexit headlines after months of stonewalling and unmoving negotiations. Wednesday also features some potentially hard-hitting data, with the UK's inflation reading hitting at 08:30 GMT.  UK CPI Preview: With inflation decelerating in favor of real wages, Sterling will be supported The UK headline inflation is expected to have decelerated to 2.4% y/y in August while core inflation slow to 1.8% y/y. The UK Inflation outpaces the nominal UK wage growth by 0.2% y/y when bonuses are included and by 0.4% y/y excluding bonuses. How to trade the UK inflation with GBP/USD UK inflation is closely watched by the BOE and moves the British Pound. The Market Impact Tool shows trading opportunities in both upside and downside surprises on this event. New Zealand Q2 GDP seen lower at 0.5% - Westpac Analysts at Westpac offer their view on New Zealand’s Q2 GDP release due on the cards at 2245 GMT later on Wednesday.  

Daily chart Spot Rate: 94.55 Daily High: 94.69 Daily Low: 94.53 Trend: Cautiously bearish Resistance R1: 94.66 (neckline hurdle) R2: 95.00 (S

The daily chart of the dollar index (DXY) shows a head-and-shoulders breakdown - a bearish reversal pattern- which indicates the rally from the February low of 88.25 has likely ended and the bears are back in a commanding position.However, the breakdown could be a trap as the greenback tends to perform well in the fourth quarter.More importantly, the 10-year treasury yield printed a four-month high of 3.06 percent and could revisit yearly high of 3.13 percent, now that it has found acceptance above key resistance of 3.02 percent (July high).Daily chartSpot Rate: 94.55 Daily High: 94.69 Daily Low: 94.53 Trend: Cautiously bearishResistanceR1: 94.66 (neckline hurdle) R2: 95.00 (Sept. 14 high) R3: 95.50-95.60 (multiple daily highs)SupportS1: 94.30 (previous day's low) S2: 94.00 (psychological support) S3: 93.71 (July 9 low)

Karen Jones, Head of FICC Technical Analysis at Commerzbank, suggested the pair needs to retreat below 1.1508 to mitigate upside pressure. Key Quotes

Karen Jones, Head of FICC Technical Analysis at Commerzbank, suggested the pair needs to retreat below 1.1508 to mitigate upside pressure.Key QuotesEUR/USD is poised to encounter resistance offered by the 1.1745/50 area and the 1.1790 recent high. This has rejected the market many times and remains formidable resistance. A close above here is needed to trigger a move to the 1.1853 mid-June high and the 1.1907 55 week ma. We continue to view the recent low at 1.1301 as a significant turn for the market”. “The cross will need to drop sub 1.1508 to alleviate immediate upside pressure”.

Morten Helt, Senior Analyst at Danske Bank, sees the greenback gathering further traction towards end of 2018. Key Quotes “USD strength failed to ma

Morten Helt, Senior Analyst at Danske Bank, sees the greenback gathering further traction towards end of 2018.Key QuotesUSD strength failed to materialise yesterday despite the escalation in trade woes, as risk appetite stayed buoyant. In recent days, USD has notably shrugged off both the continued rise in USD yields above 3% and the trade issue”. “However, the recent ‘fatigue’ in the FX market regarding these factors may not last: the trade dispute is set to remain a source of uncertainty and the Fed will continue to out hike expectations, in our view. This should ensure pockets of USD strength towards year end”.

As reported by Bloomberg, the US and Canada continue to exchange sharp words over trade as NAFTA talks resume. Key highlights According to Bloomberg

As reported by Bloomberg, the US and Canada continue to exchange sharp words over trade as NAFTA talks resume.Key highlightsAccording to Bloomberg, Representative Steve Scalise of Louisiana warned that patience for Canada was "wearing thin", while Canadian Prime Minister Justin Trudeau continues to reiterate that he'd rather have no deal at all than a deal that is detrimental to Canada. Thursday is being considered the deadline to submit any official paperwork leading to and agreement, before yet another self-imposed 'deadline' sails by with no agreement in place. A tentative deal was initially reached with Mexico in August, though despite President Donald Trump threatening to go ahead and redraft NAFTA with just Mexico, the US Senate has stopped short of backing up Trump's statements, especially after Mexico has warned that it has no interest in a NAFTA deal without Canada. Bloomberg, quoting Jennifer Hillman: “It is growing increasingly unlikely that you can get text to the Congress by Sept. 30,” said Jennifer Hillman, a professor of law at Georgetown University and former general counsel to the Office of the U.S. Trade Representative. It’s even more unlikely to proceed quickly with only Mexico, she said. “Canada does still have some leverage.”

Reuters cites two sources and a government document that revealed India’s steel ministry’s proposal to hike the effective import duty on some steel pr

Reuters cites two sources and a government document that revealed India’s steel ministry’s proposal to hike the effective import duty on some steel products from current 5-12.5% range to 15%, in a bid to stabilize the local currency, the Rupee. According to the source: “The broader message is to address the trade balance but we will try to promote ‘Make in India’ by encouraging domestic (steel) production,” adding that there was no certainty that the proposed duty would be imposed.

Analysts at TD Securities point out that the market expectations of a rate hike by BoT at today's meeting grew in the wake of stronger than expected Q

Analysts at TD Securities point out that the market expectations of a rate hike by BoT at today's meeting grew in the wake of stronger than expected Q2 GDP data (4.6% y/y) and hawkish comments from BoT governor Santiprabhob, which he downplayed later.Key Quotes“Headline inflation has finally moved back within the BoT's target range, albeit at the lower end while core inflation remains low, suggesting no rush to tighten policy. Separately THB has outperformed and unlike the likes of Indonesia, BoT does not need to hike rates to defend the currency. As such we expect the BoT to stay on hold.”

The research team at Nomura suggests that in Norway, Norges Bank is widely expected to raise rates at this Thursday’s meeting and the focus will then

The research team at Nomura suggests that in Norway, Norges Bank is widely expected to raise rates at this Thursday’s meeting and the focus will then turn towards when the next hike will take place.Key Quotes“The current pace of tightening signals this could come in March, but we would not rule out a bank tightening at a faster pace.” “We expect these themes to keep NOK supported in coming months. However, NOK positive catalysts are unlikely to last indefinitely. Once a few hikes in, Norges Bank may take a more data-dependent approach, akin to the Bank of Canada (BoC).”

New Zealand’s Q2 current account deficit widened to -3.3% of GDP (mkt -2.9%) a combination of a trade surplus and drag from net income (outflows were

New Zealand’s Q2 current account deficit widened to -3.3% of GDP (mkt -2.9%) a combination of a trade surplus and drag from net income (outflows were larger than expected), notes the research team at TD Securities.Key Quotes“So while the deficit was wider, what matters for growth is that trade per se is healthy via strong export growth. We confirm that trade is expected to add around ¼%pts to GDP growth, released tomorrow (TD and mkt +0.8%/q). As an aside, net foreign debt at -52% of GDP is the lowest on record, and combined with a low current account deficit and a string of fiscal surpluses, we still wonder why NZ at AA is two notches below Australia at AAA (SnP).”

In view of analysts at Standard Chartered, one of the biggest challenges facing the Chinese economy is deteriorating demographics and if China’s two-c

In view of analysts at Standard Chartered, one of the biggest challenges facing the Chinese economy is deteriorating demographics and if China’s two-child policy continues, its working-age population (aged 15-64) will decline by an average 2.2mn per year from 2018-30, and 7.5mn per year from 2031-50.Key Quotes“As a result, China’s total labour force would drop by around 179mn, or 18%, from 2018-50, with a direct bearing on long-term economic prospects.” “Our analysis suggests that even assuming all else is equal, a shrinking labour force alone could reduce China’s average annual economic growth rate by 1ppt from 2018-50, by when China aims to become a leading world power.” “As a result, we argue that the time is ripe for China to fully abolish child limits. This would bring both demographic and economic benefits to China.”  

Pleased by the agreements between the North Korean leader Kim Jong Un and South Korea’s President Moon Jae-in, the US President Trump took to Twiter,

Pleased by the agreements between the North Korean leader Kim Jong Un and South Korea’s President Moon Jae-in, the US President Trump took to Twiter, noting: “Kim Jong Un has agreed to allow nuclear inspections, subject to final negotiations, and to permanently dismantle a test site and launch pad in the presence of international experts.” “In the meantime there will be no Rocket or Nuclear testing,” On repatriation of remains of the US service people killed in the Korean War, “hero remains to continue being returned home to the United States. Also, North and South Korea will file a joint bid to host the 2032 Olympics. Very exciting!”

Hourly Chart Spot Rate: 1.3150 Daily High: 1.3176 Daily Low: 1.3136 Trend: Mildly bearish Resistance R1: 1.3162 (100-day MA) R2: 1.3204 (May

The GBP/USD pair is struggling to beat the 100-day moving average hurdle of 1.3162 for the second day, having rallied close to three percent in the last two weeks.The bulls need to take out the long-term MA hurdle in the next couple of hours, else a pullback to 1.31 could be in the offing. The rising wedge breakdown seen in the hourly chart is also calling a minor retreat in the GBP/USD pair.Hourly ChartSpot Rate: 1.3150 Daily High: 1.3176 Daily Low: 1.3136 Trend: Mildly bearishResistanceR1: 1.3162 (100-day MA) R2: 1.3204 (May 29 low) R3: 1.3213 (July 26 high)SupportS1: 1.3125 (5-day MA) S2: 1.3043 (Aug. 30 high) S3: 1.2984 (50-day MA)

Analysts at TD Securities notes that there was no material change in the BoJ's assessment of the economy accompanying its policy rate decision. Key Q

Analysts at TD Securities notes that there was no material change in the BoJ's assessment of the economy accompanying its policy rate decision.Key Quotes“The policy rate was left at -0.1% and the 10yr target remained about 0%. Kuroda is unlikely to make comments spurring speculation of a near-term exit in the press conference this afternoon.”

Analysts at ANZ note that the New Zealand’s Q2 unadjusted quarterly current account balance switched from surplus to deficit (from a downwardly-revise

Analysts at ANZ note that the New Zealand’s Q2 unadjusted quarterly current account balance switched from surplus to deficit (from a downwardly-revised $0.1bn in Q1 to -$1.6bn), owing entirely to a narrowing services surplus on the back of the tourism-season wind down.Key Quotes“The mix of a wider quarterly deficit than we had expected and revisions to previous quarters saw the annual deficit land at $9.5bn (3.3% of GDP) – around $1bn wider than we had pencilled in. Overall, the annual deficit remains below its historical average of 3.6% of GDP.” “In seasonally adjusted terms, the quarterly current account deficit narrowed by $0.5bn to $2.7bn. As expected, this was driven by a widening services surplus ($0.1bn to $1.5bn) and narrowing goods deficit ($0.3bn to -$1.4bn).” “New Zealand’s net international liability position (NILP) widened $1.6bn to $157.9bn.” “There are no obvious implications from today’s data for tomorrow’s real GDP figures. We expect to see a 0.7% q/q expansion in production GDP. The drag from net exports to real expenditure GDP is expected to shrink as export volumes pick up from Q1.”  

Asian equity markets are rebounding for Wednesday as broader markets shrug off tariff battles between the US and China, and Japan's leading Nikkei 225

Asia sees green as trade war fears ease, if only for now.Equities are in full recovery mode as the broad Asia-Pacific region pushes into full recovery mode.Asian equity markets are rebounding for Wednesday as broader markets shrug off tariff battles between the US and China, and Japan's leading Nikkei 225 index is touching into 23,420 after surging higher into the mid-week. The US unloaded another round of tariffs on China, targeting $200 billion USD worth of Chinese goods crossing the US border, but markets were almost relieved when the tariffs, which were feared to be as high as 25%, only came in at 10%, and Trump's revolving threat of even further tariffs on $267 billion in Chinese goods is being ignored as Asian equities take a breather after weeks of trade war tension. In Japan, the Nikkei 225 index is up 1.27%, with the Tokyo Topix index also up a comparable 1.50%, while Australia remains comparatively more sedate, but still in the green at 0.47%; emerging markets are also getting a much-needed break, with the broad MSCI Asia-Pacific index rising by 0.62% for Wednesday, while Chinese equities experience a welcome rally, with the Hang Seng index clipping upwards by 0.97% and Shanghai's CSI 300 positive by 1.14%.Nikkei 225 levels to watchPrevious resistance has turned into support for the leading Nikkei 225 index at the 23,000 technical handle after today's rally, and the gap between current prices and 2018's all-time high of 24,130 is suddenly much closer than before; despite beginning to look overextended on technical charts, there remains little resistance in the way of Nikkei bulls, while support firms up from the last meaningful swing low at 22,170.

Bill Evans, Chief Economist at Westpac, notes that Australia’s six month annualised growth rate in the Westpac–Melbourne Institute Leading Index, fell

Bill Evans, Chief Economist at Westpac, notes that Australia’s six month annualised growth rate in the Westpac–Melbourne Institute Leading Index, fell from 0.5% in July to -0.02% in August.Key Quotes“Over the seven months from October last year to April this year the growth rate averaged 0.89%. In the four months since April the growth rate has averaged only 0.1% – a clear step down.” “Those readings to April were consistent with the strong, above trend momentum in the official growth figures that showed the Australian economy growing at a 4% annualised pace in the first half of 2018. However the weaker, though, volatile reads we have seen in recent months point to a slower growth pace over the second half of 2018 and into 2019.” “Westpac expects momentum to slow to around 2.5% in the second half of 2018, which will be slightly below trend, with this slower pace to be sustained through 2019 at around 2.7%.” “Over the six months from March to August the growth rate in the Index slowed from +0.7% to -0.02%.” “Westpac confirms its view that the cash rate will remain unchanged for the remainder of 2018 and through 2019 and 2020.”  

The NAB Cashless Retail Sales Index for Australian economy gained 1.1% in August, following a gain of 0.7% (revised) in July, notes the research team

The NAB Cashless Retail Sales Index for Australian economy gained 1.1% in August, following a gain of 0.7% (revised) in July, notes the research team at NAB. Key Quotes“All of the six major categories grew in the month; four saw an improvement while one saw (household goods) steady growth and another (cafes, restaurants and takeaway) saw growth moderate.” “Our data mapping suggests that the official ABS measure of retail sales will be flat in August, following a flat ABS print in July. Our forecast last month was 0.1%, but has been revised to -0.1%.” “The NAB Cashless Retail Sales Index was up a more encouraging 11.5% year-on-year in August, although this is still potentially distorted by special factors from late-2017, including the new to Australia Black Friday sales.” “Year-on-year growth is positive for all six NAB Cashless Retail Index major industry groupings.”The convergence in retail spending patterns across Australia, which has been present for some months, remains.”

The USD/INR is currently trading 72.70, having clocked a record high of 72.98 on Tuesday. The pullback could be short-lived and the currency pair cou

INR could slide to fresh record lows, courtesy of a pick up in the treasury yields.The limited policy response indicates India is preferring a weaker currency.The USD/INR is currently trading 72.70, having clocked a record high of 72.98 on Tuesday. The pullback could be short-lived and the currency pair could rise to new highs above 73.00 as the US 10-year treasury yield rose to a four-month high of 3.06 percent yesterday. More importantly, limited policy response and mild intervention by the Reserve Bank of India (RBI) indicates the world's fastest-growing major economy is warming up to the idea of a weaker currency. Indeed, the government announced measures on Friday to tackle the current account deficit, but those are unlikely to put brakes on the rupee fall and are well short of stronger measures like Non-Resident Indian (NRI) bonds, FX swap window for oil-marketing companies introduced during the previous bouts of rupee weakness.  

Analysts at Nomura suggest that due to the increasing concerns over Korean financial imbalances associated with the housing market, they have raised t

Analysts at Nomura suggest that due to the increasing concerns over Korean financial imbalances associated with the housing market, they have raised the probabilities they assign to near-tem rate hikes by BOK.Key Quotes“We now assign 30%, 60% and 10% probabilities to a 25bp rate hike to 1.75% in October, November and January, respectively. Previously, we assigned 10%, 40%, 30% and 20% probabilities to a 25bp rate hike in October, November, January and thereafter, respectively, as we trimmed our 2018 GDP growth forecast to 2.9% from 3.0%.” “We believe that the BOK will wait to assess the impact of tighter measures (announced on 13 September) on the housing market.” “The US midterm elections on 6 November could also be important for the BOK to watch as they could have some implications for US-China trade tensions and US-North Korea nuclear negotiations.” “That said, of the last two BOK policy meetings of 2018 (18 October and 30 November), we believe November is more likely than October when it comes to the timing of the next 25bp rate hike to 1.75%.”

Michael Gordon, Senior Economist at Westpac, notes that New Zealand’s annual current account deficit increased to 3.3% of GDP in June, compared to an

Michael Gordon, Senior Economist at Westpac, notes that New Zealand’s annual current account deficit increased to 3.3% of GDP in June, compared to an average market forecast of 2.9%.Key Quotes“While this was the largest deficit in three years, it is still low relative to history, and remains within the range of what we would consider to be sustainable.” “The balance of trade in goods and services improved in the June quarter, though it was softer than the same time last year.” “Despite the widening in the current account deficit, New Zealand’s international position remains on a sustainable path. Net international liabilities were steady at 54.6% of GDP, which is the lowest reading for this series dating back to June 2000.” “Relatively small current account deficits in recent years, and hence a smaller borrowing requirement, have meant that New Zealand has effectively been able to outgrow its debts.”

Analysts at Westpac offer their view on New Zealand’s Q2 GDP release due on the cards at 2245 GMT later on Wednesday. Key Quotes: “After a few quart

Analysts at Westpac offer their view on New Zealand’s Q2 GDP release due on the cards at 2245 GMT later on Wednesday.Key Quotes:“After a few quarters of patchy, subdued growth, the stars seem to have aligned for the New Zealand economy during the June quarter. Recent activity indicators have shown growth ranging from modest to strong across a wide range of sectors. We expect a 0.9% rise in GDP for the quarter.  In part, our forecast reflects some big one-off gains in particular services sectors that are unlikely to be repeated. However, there are also some temporary negatives. Shutdowns in fuel and methanol production will subtract around 0.2% from Q2 growth but will boost Q3 growth by the same amount.  The Q2 result could have an important bearing on the Reserve Bank's thinking, given its low expectation of 0.5% growth and its recent comments that it is nearing the trigger point for OCR cuts.”

The GBP/USD is testing into 1.3150 after slipping away from the current week's highs, but remains close by as improving Brexit sentiment bolsters the

Pound buyers are enjoying some Brexit relief as PM May and the EU's Michel Barnier appear set to begin working together towards a solution.UK inflation data due early Wednesday could derail buying opportunities.The GBP/USD is testing into 1.3150 after slipping away from the current week's highs, but remains close by as improving Brexit sentiment bolsters the Sterling ahead of Wednesday's UK CPI reading. Stiff-nosed Eurosceptics within Britain's Tory party are seeing Prime Minister Theresa May break significant ground in talks with the EU, with Brussels' head Brexit negotiator and PM May taking turns announcing that they are willing to reach fair middle ground in talks in order to avert a disorderly Brexit, and calls by the hardline Brexiteers to vote down any trade agreement that PM My secures with the EU, regardless of content, are largely being ignored for now as Pound traders experience some much-needed relief on Brexit headlines after months of stonewalling and unmoving negotiations. Wednesday also features some potentially hard-hitting data, with the UK's inflation reading hitting at 08:30 GMT. The CPI for the year into August is expected to tick down slightly from 2.5% to 2.4%, and GBP bulls will be hoping for a showing that at least hits expectations in order to keep the GBP/USD in a decidedly long-sided stance heading into the latter half of the week.GBP/USD levels to watchThe Sterling-Dollar matchup heads into Wednesday's London market session clattering into the week's highs, and as FXStreet's own Valeria Bednarik noted earlier: "(the GBP/USD) retains its bullish short-term stance according to technical readings in the 4 hours chart, as it continues developing above a firmly bullish 20 SMA. In the mentioned chart, the Momentum maintains its bullish slope above its 100 level, while the RSI is pulling back from overbought levels, not enough to suggest the current decline is poised to continue. The high of the day is critical, as the pair has there the 50% retracement of the 2016/18 rally, and a break above it should result in a steeper advance, particularly if supported by UK inflation data. Below 1.3120, on the other hand, the pair could correct lower, but bears won't take over unless 1.3045 gives up." Support levels: 1.3120 1.3090 1.3045 Resistance levels: 1.3170 1.3210 1.3240

The daily chart of the EUR/USD is flashing a bullish reversal pattern, but a breakout may remain elusive, as the bond yield differentials are rising i

The EUR/USD has charted an inverse head-and-shoulders pattern with a neckline hurdle at 1.1713.The pair may have a hard time scaling the neckline resistance, courtesy of the widening two-year and 10-year US-DE (Germany) yield spread.The daily chart of the EUR/USD is flashing a bullish reversal pattern, but a breakout may remain elusive, as the bond yield differentials are rising in the EUR-negative manner. At press time, the EUR/USD is trading at 1.1672 and the inverse head-and-shoulders neckline is located at 1.1713. A close above that level would imply that sell-off from the February high of 1.2556 has ended and the bulls have regained control. However,  it is easier said than done, as the spread between the US and German bond yields are rising in favor of the EUR/USD bears. For instance, the 10-year yield spread currently stands at 257 basis points - the highest level since Aug. 8. More importantly, the two-year spread, which is more sensitive to interest rate expectations, is hovering at 233 basis points - the highest level since 1989. The currency pair may find acceptance above the inverse head-and-shoulders neckline if US-DE yield differential drops sharply, although the odds of the spread rising further are high, as the Fed is expected to raise rates next week. The EUR could also pick up a bid if the Chinese yuan posts big gains against the USD.EUR/USD Technical LevelsResistance: 1.1713 (inverse head-and-shoulders neckline), 1.1791 (July 9 high), 1.1852 (June 14 high) Support: 1.1666 (200-day moving average), 1.1605 (50-day moving average), 1.1526 (Sept. 10 low)

Hourly Chart Spot Rate: 6.3732 Daily High: 6.3983 Daily Low: 3.3533 Trend: Bearish Resistance R1: 6.4625 (Sept. 18 high resistance on the hour

The USD/TRY pair has dived out of the rising channel, as per the hourly chart, signaling the corrective rally from the Sept. 14 low of 6.02 has likely ended.The downside break of the rising channel puts focus back on the bearish reversal signaled by the pennant breakdown on Sept. 13.The pair looks set to end the three-day winning streak. Only a daily close above 6.55 (Sept. 13 high) would neutralize the bearish outlook.Hourly ChartSpot Rate: 6.3732 Daily High: 6.3983 Daily Low: 3.3533 Trend: BearishResistanceR1: 6.4625 (Sept. 18 high resistance on the hourly chart) R2: 6.55 (Sept. 13 high) R3: 6.8354 (Aug. 30 high)SupportS1: 6.3214 (50-hour moving average) S2: 6.2497 (100-hour moving average) S3: 6.00 (psychological level)

More comments flowing in from China’s Premier Li, as he now speaking about the macroeconomic policies and economic outlook in his speech at the World

More comments flowing in from China’s Premier Li, as he now speaking about the macroeconomic policies and economic outlook in his speech at the World Economic Forum (WEF) event in Tianjin. Economy maintains steady growth, fundamentals healthy. There are significant changes in the external environment. Difficulties in maintaining steady growth increasing. China has ample policy tools to cope with difficulties and challenges. Will keep macroeconomic policies steady, will not resort to strong stimulus. Will fine tune policies in a pre-emptive way. Won't devalue the currency to stimulate exports.

Following the conclusion of the summit between both the North and South Korea, the North Korean Leader Kim Jong Un came out on the wires, noting: Wil

Following the conclusion of the summit between both the North and South Korea, the North Korean Leader Kim Jong Un came out on the wires, noting: Will turn Korean peninsula into place without nuclear weapons. Agrees to visit Seoul, likely later this year. South Korea’s state news agency, Yonhap, reported that South and North Korea signed the agreement at the end of their summit talks in Pyongyang. However, the details of the agreement signed by the leaders were not immediately available. 

The BOJ rate decision has turned out to be a non-event for the markets as expected. The central bank held rates unchanged at -0.1 percent and more im

The Bank of Japan (BOJ) kept rates unchanged as expected and reiterated a rosy economic view.The USD/JPY has barely moved after the BOJ rate decision and could take cues from the treasury yields during the day ahead.The BOJ rate decision has turned out to be a non-event for the markets as expected. The central bank held rates unchanged at -0.1 percent and more importantly, left unchanged the forward guidance that interest rates will remain extremely low for an extended period. Further, it retained its view that the economy is expanding moderately even though the escalating trade tensions pose a risk to the global economy. All-in-all, the BOJ offered little that markets already do not know, thus leaving the USD/JPY at the mercy of the Treasury yield. At press time, the 10-year treasury yield is trading at 3.05 percent, having clocked a four-month high of 3.06 percent yesterday. Meanwhile, the USD/JPY is seen at 112.35. With technicals biased toward bulls and treasury yields rising, the USD/JPY looks set to extend gains toward 113.00.USD/JPY Technical LevelsResistance: 112.39 (upper end of the range on 5-min chart), 112.80 (July 13 high), 113.00 (psychological hurdle) Support: 112.10 (5-day moving average), 111.83 (Aug. 29 high), 111.63 (10-day moving average)

China's Premier Li Keqiang is on the wires now, via Reuters, speaking at a World Economic Forum event in Tianjin. Key Headlines: Should maintain bas

China's Premier Li Keqiang is on the wires now, via Reuters, speaking at a World Economic Forum event in Tianjin.Key Headlines:Should maintain basic principle of free trade. Happy to see globalization moving forward. The trend of globalization cannot be stopped but there are flaws in the process. China's steps of opening up will quicken. Any unilateral actions will not resolve problems. The Chinese government will not resort to forceful stimulus.

BoJ board member and the dissenter Kataoka reiterated that the central bank needs to buy JGBs so yield for the duration of 10 years or longer falls fu

BoJ board member and the dissenter Kataoka reiterated that the central bank needs to buy JGBs so yield for the duration of 10 years or longer falls further.Additional Comments:BoJ should clarify it will ease further if domestic factors delay achievement of price target. Dissents from view that inflation will accelerate toward 2 pct.

Reuters reports additional insights on the Bank of Japan’s (BoJ) monetary policy decision, with the key points found below. Leaves unchanged forward

Reuters reports additional insights on the Bank of Japan’s (BoJ) monetary policy decision, with the key points found below. Leaves unchanged forward guidance on rates Will keep current extremely low rates for an extended period of time Board members Harada and Kataoka dissent board member. Harada said allowing yields to move up, down to some extent was too ambiguous as a guideline. BoJ says Japan's economy expanding moderately, keeps assessment unchanged.

Japan BoJ Interest Rate Decision meets forecasts (-0.1%)

At its monetary policy meeting today, the Bank of Japan (BoJ) made no changes to its monetary policy settings, holding rates at -10bps while maintaini

At its monetary policy meeting today, the Bank of Japan (BoJ) made no changes to its monetary policy settings, holding rates at -10bps while maintaining 10yr JGB yield target at 0.00%. The BoJ vote was 8 to 1, leaving its pledge to buy JGBs unchanged, so that its holdings increase at annual pace of around 80 trln yen.  

Hourly Chart Spot Rate: 0.6580 Daily High: 0.6598 Daily Low: 0.6573 Trend: Neutral Resistance R1: 0.6608 (previous day's high) R2: 0.6641 (61

In the last 24 hours, the NZD/USD pair failed twice to capitalize on the inverse head-and-shoulders breakout and has established a lower highs pattern on the hourly chart.So, the ascending trendline support of 0.6566 could soon be put to test. Acceptance below that level would further embolden the bears.The bulls need a quick move above 0.6608 (previous day's high).Hourly ChartSpot Rate: 0.6580 Daily High: 0.6598 Daily Low: 0.6573 Trend: NeutralResistanceR1: 0.6608 (previous day's high) R2: 0.6641 (61.8% Fib R of 0.6727/0.6501) R3: 0.6675 (50-day moving average)SupportS1: 0.6571 (5-day moving average) S2: 0.6539 (Sept. 17 low) S3: 0.6500 (psychological level)

The Bank of England (BOE) Monetary Policy Committee (MPC) member Gertjan Vlieghe was on the wires earlier today, via Reuters, expressing his take on t

The Bank of England (BOE) Monetary Policy Committee (MPC) member Gertjan Vlieghe was on the wires earlier today, via Reuters, expressing his take on the Kingdom’s labor market.Key Headlines:Pay growth in Britain is accelerating "quite slowly". Despite the unemployment rate falling to a more than four-decade low. Many people are still under-employed.  

The Barclays Research Team offers a sneak peek at what to expect from today’s UK CPI due to be released at 0830 GMT.  Key Quotes: “We forecast UK i

The Barclays Research Team offers a sneak peek at what to expect from today’s UK CPI due to be released at 0830 GMT.  Key Quotes:“We forecast UK inflation to have softened in August both at the headline and core level. The y/y acceleration of CPI in July is likely to have been temporary and we expect m/m clothing prices to be less positive than a year ago, resulting in negative base effects. We also expect the influence of the sharp GBP depreciation after the EU referendum to continue to drop out of y/y UK inflation. For RPI, we expect the RPI-CPI basis to widen to 0.9pp after contracting sharply in July.”

Currently, the AUD/USD pair is trading at 0.7216, having clocked a two-week high of 0.7234 earlier today. The currency posted solid gains on Tuesday,

AUD/USD has backed off from the two-week highs possibly due to an uptick in the treasury yields.The pair has retraced 50 percent of the drop from the Aug. 28 high of 0.7362.Currently, the AUD/USD pair is trading at 0.7216, having clocked a two-week high of 0.7234 earlier today. The currency posted solid gains on Tuesday, despite escalating US-China trade tensions and rising treasury yields, likely due to a 3 percent rise in NY copper and recovery in Chinese yuan. However, as of writing, the focus seems to have shifted to a rise in the 10-year treasury yield to a four-month high of 3.06 percent. Looking forward, the AUD could find acceptance above 0.7224 (50% Fib R of 0.7362/0.7085) if the CNY prints gains and the global equities remain bid.AUD/USD Technical LevelsResistance: 0.7238 (Aug. 24 low), 0.7256 (61.8% Fib R of 0.7362/0.7085), 0.7307 (50-day moving average) Support: 0.7191 (5-day moving average), 0.7142 (Sept. 17 low), 0.71 (psychological level)  

Crude oil prices peaked at a near-term high of with WTI tapping into 70.40 on Tuesday, but was unable to make a challenge of last week's high of 71.25

US oil takes a step backwards as American crude inventories continue to outstrip demand.OPEC is meeting soon to discuss output limits, which will give Saudi Arabia a chance to blame the US for rising prices.Crude oil prices peaked at a near-term high of with WTI tapping into 70.40 on Tuesday, but was unable to make a challenge of last week's high of 71.25 after US oil inventories showed yet another surprise build-up in their barrel counts yesterday. US crude stocks increased by 1.2 million barrels according to the American Petroleum Institute (API), sharply reversing the market forecast of -2.7 million barrels, raising prospects for a widening premium in the Brent versus WTI with crude runs worsening in Europe and Asia. OPEC ministers are also slated to meet this Sunday, but no decisions or adjustments are expected to be made while the OPEC group meets to discuss output policies and their compliance. Saudi Arabia has mentioned several times recently that they have no desire to push oil prices over $80/barrel, a move higher may be unavoidable as US sanctions on Iran are set to come into effect beginning November 4th.WTI levels to watchWith WTI falling back towards 69.50, buyers will be scrambling to keep prices bolstered from yesterday's late swing low of 69.30, with a floor underneath current prices from the weeks triple-touch near 68.50, while any bullish plays will have to clear last week's high at 71.25.

The yield on the 10-year treasury note jumped to four-month highs on Tuesday amid escalating US-China trade war. The benchmark yield rose to 3.06 per

Treasury yields rise to four-month highs despite escalating trade tensions.  China's Treasury holdings fell to six-month lows.  The yield on the 10-year treasury note jumped to four-month highs on Tuesday amid escalating US-China trade war. The benchmark yield rose to 3.06 percent yesterday - the highest level since May 23 - and was last seen at 3.045 percent. More importantly, the yields rose even though the United States and China slapped a new round of tariffs on each other. The Trump administration on Monday announced a 10 percent tariff on $200 billion worth of Chinese imports. Meanwhile, in retaliation, China has announced new tariffs on US imports worth $60 billion. Meanwhile, the official data showed that China's holdings of US Treasuries dropped to a six month low of $1.171 in July, from $1.178 trillion in June. 

The People's Daily newspaper published by the Communist Party is carrying a front-page article, which says that China will use trade war with the US r

The People's Daily newspaper published by the Communist Party is carrying a front-page article, which says that China will use trade war with the US replace imports, promote localization and accelerate the development of high-tech products.Key quotes (Source: Reuters, People's Daily)To deal with the trade war, what China really should do is to focus on doing its own thing well. China is not worried that the US trade countermeasures will raise domestic commodity prices by too much, but will instead use it as an opportunity to replace imports, promote localization or develop export-oriented advanced manufacturing. China has always managed to find the proper solutions to put its economy back on track. The trade conflict will not force China to succumb to US pressure. Instead, given its economic resilience, it will squarely face those challenges, find the right solutions, and emerge stronger  

The People's Bank of China (PBOC) set the yuan reference rate at 6.8569 vs Tuesday's fix of 6.8554.

The People's Bank of China (PBOC) set the yuan reference rate at 6.8569 vs Tuesday's fix of 6.8554.

Bank of Japan Monetary Policy Statement overview The Bank of Japan (BoJ) will be dropping their latest Monetary Policy Statement, along with their la

Bank of Japan Monetary Policy Statement overviewThe Bank of Japan (BoJ) will be dropping their latest Monetary Policy Statement, along with their latest Interest Rate Decision and an ensuing Press Conference to be chaired by the BoJ's chairman, Haruhiko Kuroda. The BoJ, deeply embroiled in an excessive quantitative easing model, is unlikely to be budged from their current stance on interest rates any time in the near future, and markets will be watching the Monetary Policy Statement release closely to see what, if any, adjustments will be made to the Japanese central bank's current strategy for trying to spur inflation growth within Japan's own economy. After making several key adjustments, including allowing the 10-year government bond yield to widen to 0.2%, the BoJ is unlikely to engage in much further activity immediately; media outlets may ask Kuroda about a further widening of bond yield targets, but the BoJ chairman is likely to remain non-committal in his statements.How could it affect the USD/JPY?The Dollar-Yen pairing is poised to take another step higher as long as broader market sentiment remains on the rails, and as FXStreet's own Valeria Bednarik pointed out, the USD/JPY is "at risk of extending its advance after breaching August high at 112.14, now the immediate support level. In the 4 hours chart, the pair continues moving away from its 100 and 200 SMA, with the shortest gaining upward traction, currently at around 111.45. In the mentioned chart, the Momentum indicator eases within positive territory, as a result of the pair being unable to surpass its previous high, but given that it remains near daily highs, and the RSI maintains gains around 65, the overall risk leans to the upside." Support levels: 112.15 111.80 111.45      Resistance levels: 112.60 112.90 113.20Key notesUSD/JPY analysis: bullish potential rises on break above 112.14 USDJPY: Resumes Uptrend, Eyes The 112.61 Resistance ZoneAbout the Bank of Japan Monetary Policy Statement An official monetary policy statement is released by the Policy Board of the Bank of Japan. By communicating the committee´s vote outcome regarding interest rates and other policy measures as well as the economic conditions influencing their decision, the statement gives clue to future changes in monetary policy.About the Bank of Japan Interest Rate DecisionBoJ Interest Rate Decision is announced by the Bank of Japan. Generally, if the BoJ is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the JPY. Likewise, if the BoJ has a dovish view on the Japanese economy and keeps the ongoing interest rate, or cuts the interest rate it is negative, or bearish.About the Bank of Japan Press ConferenceKuroda, BoJ's governor, will give a press conference in order to communicate with investors regarding monetary policy. He talks about the factors that affected the most recent interest rate decision, the overall economic outlook, inflation, and clues regarding future monetary policy.

USD/JPY has been in the hands of the bulls overnight, but the bullishness has faded as we move through the Tokyo open with the price shying away from

USD/JPY has started out the Tokyo day soft after a tremendous rally form European prices onto the 112 handle.In the 4 hours chart, the pair continues moving away from its 100 and 200 SMA.USD/JPY has been in the hands of the bulls overnight, but the bullishness has faded as we move through the Tokyo open with the price shying away from the overnight highs up at the 76.4% of July-Aug drop at 112.39. Currently, USD/JPY trades at 112.25, off the 112.38 high and up from the 112.25 session low. The Nikkei is trading at 23,746.50, consolidating the rally from 23,029 while trade wars remain the hot topic in the media, likely distracting the market from the matter at hand which is the divergence between the BoJ and FOMC with meetings in play tonight and next week respectively. Dollar due a bullish correction? Markets were risk-on markets despite the escalation of the trade dispute between the US and China. The pair was also supported by the 10-yr Tsy yields clearing the  3% mark as well as DJIA hitting all-time high following the big N225 breakout above the 4-month range top. However, we have the BoJ today seen on hold which underpins the upside CB divergence bid with the FOMC next week likely hiking rates. The Dollar is potentially due for a correction higher after its 2.5% decline over the last five weeks. Should the market figure that Trump will play hardball on China into the mid-terms, then this trade spat is not going to be resolved any time soon, that should be dollar bullish in the event of an exodus from EM-FX. USD/JPY levelsValeria Bednarik, chief analyst at FXStreet explained that in the 4 hours chart, the pair continues moving away from its 100 and 200 SMA, with the shortest gaining upward traction, currently at around 111.45: "In the mentioned chart, the Momentum indicator eases within positive territory, as a result of the pair being unable to surpass its previous high, but given that it remains near daily highs, and the RSI maintains gains around 65, the overall risk leans to the upside."  

As analysts at TD Securities noted, the markets are taking President Trump's declaration of new tariffs in stride with broad gains in North American e

Forex overnight was mixed for the dollar following the recent bearish developments in the trade war spat whereby China, as promised, retaliated to the further implementation of US tariffs on Chinese imports with 5-10% tariffs on USD60bn worth of imports.As analysts at TD Securities noted, the markets are taking President Trump's declaration of new tariffs in stride with broad gains in North American equities (SPX: +0.5%, TSX: +0.7%) following a similar risk-on session in Europe. We also had the US treasury yields climbing with the 2-year up 1.7bps and 10-year up 6bps onto the 3% handle. Global yields were biased higher also and oil rose 1% and gold fell 0.3%.  "Treasuries bear-steepened on a sharp (7bp) selloff in 30s while Canada outperformed by ~2bp across the belly and long-end. USD performance was more mixed with JPY (-0.4%) trading lower on the better risk backdrop while CAD (+0.5%) rallied on reports that NAFTA talks are to resume on Wednesday. AUD (+0.5%) also outperformed despite the new tariffs while EUR (-0.1%) and GBP (-0.1%) saw modest declines. The BoJ, NZ Current Account, and a speech by the RBA's Kent will provide the regional focus for Wednesday's event calendar," the analysts explained.  Currency actionMeanwhile, the euro was rejected ahead of key resistance yet again on the 1.17 handle and dropped in the NY session, reaching a low of 1.1652 before stabilising there around the 100-DMA and 100-HMA. The pair lifted as the dollar came off again and moved up to 1.1682 as the yen weakened and EUR/JPY picked up a bid on strong stocks -  EUR/JPY nears 131.50. Cable was falling just shy of a potential break out on positive Brexit sentiment. The pair was sold off at 1.3148 to 1.3134 before it caught a bid back through 1.3172 prior early NY highs and went on to trade at 1.3175 on UK's press noting that EU's chief Brexit negotiator is playing ball with PM may over Irish border and also reported that UK's PM May has said, " the withdrawal agreement is virtually agreed" -  Daily Express. On the eve of a key EU leaders' summit, EU's chief Brexit negotiator Michel Barnier said he is "ready to improve" backstop plans for preventing a hard Irish border after Brexit. This also sent the cross lower, reaching as low as 0.8864 before climbing into the Tokyo open to 0.8873. The cross had ended the NY session flat by 0.8875, within an NY range of  0.8908-0.8871. USD/JPY bulls were charging in on the 112 handle and the pair made a subsequent high of 112.38 from a low of 111.85 in the European session. The move met the 76.4% of July-Aug drop at 112.39  due to risk-on markets despite the escalation of the trade dispute between the US and China. The pair was also supported by the 10-yr Tsy yields clearing the  3% mark as well as DJIA hitting all-time high following the big N225 breakout above the 4-month range top. We have the BoJ today seen on hold which underpins the upside CB divergence bid with the FOMC next week likely hiking rates. Meanwhile, we have the Aussie stuck at a crossroads, with bulls not committed enough to take the pair through a critical resistance level at 0.7230, (21-D SMA 0.7219). However, oil and copper are supporting the bullish case but the sharp widening of the AU/US spread hinders the bullish case for now.  Key notes from US session:Wall Street rebounds strongly led by industrials and technologyKey events ahead:Key events for DM currencies - TDS 

According to the rating agency Moody's, the Chinese Yuan is due to experience greater-than-normal volatility as China's current account evolves. Key

According to the rating agency Moody's, the Chinese Yuan is due to experience greater-than-normal volatility as China's current account evolves.Key highlightsStatements from Moody's suggest that the Yuan's current depreciation won't affect China's credit profile for the time being. As devaluation continues, Yuan volatility expected to rise. China's foreign currency reserves should provide a sufficient buffer to temper any excess volatility seen in the Yuan. Over the long term, volatility could be seen spiking as China shifts from its current account to a structural deficit. The Chinese authorities are likely to continue developing policy tools designed specifically to adjust to a more volatile currency.

As reported by Reuters, the Bank of Japan (BoJ) has undergone a monetary policy strategy that has proven incredibly unpopular with the nation's bankin

As reported by Reuters, the Bank of Japan (BoJ) has undergone a monetary policy strategy that has proven incredibly unpopular with the nation's banking institutions by forcing down yields.Key highlightsThe BoJ has been pursuing record-setting quantitative easing for the past five years. buying large volumes of Japanese government bonds, keeping short-term yields at -0.1%. The purpose is to meet the bank's 2% inflation target, ostensibly by encouraging people to spend money, discouraging savings by pushing down yields and interest rates. The BoJ's purchases are so large they have crowded out investment banks from their own bond market, driving down commission earnings on bond trading. The BoJ also adopted a negative interest rate policy on their own reserves, charging banks -0.1%, cutting banks' profit margins and making it more difficult for banks to lend money. Negative rates on yields have cost Japanese banks approximately ¥96 billion since early 2016 on reserve interest paid, not including losses from declines in lending rates. Earnings from bond trading remains non-existent, to the point that the BoJ said they would double the 10-year target yield twice, once to 0.1% and again to 0.2%, but industry leaders say the current rates are simply too unprofitable to warrant investors trading in Japanese bonds, and the Japanese central bank has found itself being the only player in its own government bond market.

Australia Westpac Leading Index (MoM): 0.1% (August) vs 0%

Analysts at Nomura offered their model's projection for today's fix in USD/CNY. Key Quotes: "Model projection: 6.8629 versus 6.8554 previous (75 pip

Analysts at Nomura offered their model's projection for today's fix in USD/CNY.Key Quotes:"Model projection: 6.8629 versus 6.8554 previous (75 pips higher; 15 pips lower from the previous official spot close). Model projection with counter-cyclical factor: 6.8534 (20 pips lower from previous fix)."

GBP/JPY Chart, 15-Minute Spot rate 147.88 Relative change 0.11% High 148.01 Low 147.60  

The GBP/JPY pair is popping to test the 148.00 key barrier early on Wednesday after headlines broke that the UK and the EU may be much closer to achieving a workable trade deal than previously thought.Overbought readings are beginning to show on intraday indicators, implying the bullish push may face some downward pressure before the trend can resume.Wednesday will also be seeing inflation data for the UK at 08:30 GMT, and GBP traders should be braced for a bearish turnaround if the numbers fail to meet expectations.GBP/JPY Chart, 15-MinuteSpot rate 147.88 Relative change 0.11% High 148.01 Low 147.60     Trend Bullish     Support 1 147.20 (50-hour EMA) Support 2 146.32 (current week low) Support 3 145.84 (200-hour EMA)     Resistance 1 148.00 (major technical level) Resistance 2 149.31 (July swing high) Resistance 3 150.00 (major technical level; May swing high)  

Japan Adjusted Merchandise Trade Balance below expectations (¥-144.1B) in August: Actual (¥-190.4B)

Japan Merchandise Trade Balance Total came in at ¥-444.6B, above expectations (¥-468.7B) in August

Japan Imports (YoY) came in at 15.4%, above expectations (14.9%) in August

Japan Exports (YoY) above forecasts (5.6%) in August: Actual (6.6%)

According to Reuters, citing unnamed sources in Downing Street, the UK's Prime Minister Theresa May will be speaking in Austria later today, where she

According to Reuters, citing unnamed sources in Downing Street, the UK's Prime Minister Theresa May will be speaking in Austria later today, where she is expected to deliver comments doubling down on the UK's reconciliatory stance towards negotiations with the European Union, even as her own Tory party threatens to undermine any efforts she succeeds in accomplishing.Key highlightsPM May is urging the EU to reflect Britain's position on Brexit and begin showing flexibility, stating that goodwill and determination are required to avoid a disorderly Brexit. PM May promises to honour her commitment to ensure there is a workable protocol on the Irish border issue, but that agreement must still respect the UK's economic integrity. Both the EU and the UK need to stop demanding the "unacceptable" from the other side, using the external customs borders within different regions of the UK as an example. While the UK is not seeing EU rights membership without obligations, May will be repeating that she is seeking a "fair arrangement".

Analysts at TD Securities offered their outlook for today's out for the developed market currencies, (DMs). Key Quotes: "AUD RBA Assistant Governor

Analysts at TD Securities offered their outlook for today's out for the developed market currencies, (DMs).Key Quotes:"AUD RBA Assistant Governor Kent speaks on “Money Creation” to an RBA event for educators, so unlikely to be much for the markets.JPY After the tweak in policy in July the BoJ has shown little inclination towards further changes anytime soon. Inflation is edging higher though still a considerable way off the 2% target. As such we think this meeting will be largely uneventful. However, we think the BOJ could introduce additional flexibility as soon as Q1-2019 insofar as the output gap continues to remain decisively positive. "GBP Inflation for August is released this morning, and we see slight downside risks, with a moderation in both headline and core inflation, with core inflation falling from 1.9% y/y to 1.7% y/y (mkt: 1.8%) and headline falling from 2.5% y/y to 2.3% y/y (mkt: 2.4%). Previously-announced energy price hikes in August and September will complicate the headline inflation picture somewhat, with risks skewed to the upside, though ultimately this will just be a timing issue. Pass-through from the weaker pound is abating, and we expect core inflation to hover near current levels for the remainder of the year. BoE Chief Economist Andy Haldane delivers a speech to mark the Central Bank of Estonia's 100th anniversary at 9am BST.USD Housing starts and building permits are expected to show some recovery in August, with TD looking for starts to rise by 6.3% m/m to a 1.242m unit pace (market: 1.238m). The market looks for permits to see a more modest 0.5% increase while the Q2 current account deficit, the only other data release, is seen narrowing to $103.4bn."
 

Gold had been sliding from the $1,203 early bird North American session highs and made a low of $1,196 in the NY afternoon as the price continues to c

Gold bulls stepping up to challenge downside pressures.DXY losing its trade appeal, drifting sideways while the euro rallied and yen sold off. 94.70 was as high as the DXY got and it even traded as low as 94.32 at one point.Gold had been sliding from the $1,203 early bird North American session highs and made a low of $1,196 in the NY afternoon as the price continues to carve out a bullish symmetrical triangle pattern on the charts. The moves of late are associated with the performance in the greenback where traders are buying into cautiously. Fundamentally, the intensifying U.S.-China trade dispute is the driver ahead of next week's FOMC meeting.  However, we have only seen modest moves in the greenback so far and markets, in fact, took the trade headlines in their stride. Even with President Donald Trump announcing $200 billion tariffs against China on Monday that provoked an expected and swift retaliation from the nation, fear has yet to really show up in the market and the US benchmarks were higher with the DJIA making another all-time record high.Bulls left out in the rainThe dollar bulls were subsequently left out in the rain with the DXY drifting sideways while the euro rallied and yen sold off. 94.70 was as high as the DXY got and it even traded as low as 94.32 at one point. In most recent trade, spot gold has scored fresh highs of $1,199.46 as the dollar drifts lower. Eyes will now be on whether China come forward to speak to the US - if they do not, this could well drag on for some time and indeed, with the midterms around the corner, Trump will want to go into those with the upper hand looking strong - so the first move needs to come from China. Gold levelsGold remains in a sideways consolidation between 1214 and 1182 but is making the case for a break higher according to the bullish symmetrical triangle. For bulls to get back control, whereby the market is heavily short of gold and to reconsider its positioning, (net speculative short positions, or bets an asset’s price will fall, in gold, are up 275% year to date), then they need to get and hold above the 50-D SMA at 1211 first, then 1214 which is resistance and then the 200-W SMA at 1233 will need to be challenged. A retry of the downside now should target 1146/20 monthly levels.

GBP/USD Chart, 15-Minute Spot rate 1.3166 Relative change 0.15% High 1.3175 Low 1.3135  

The Sterling is popping in the early overnight session for Wednesday as Brexit headlines cross the wires, with hopes on the rise for a workable resolution being imminent.The GBP/USD has touched into a fresh weekly high on the news at 1.3175 and buyers will be looking for a continuation of momentum.Hourly Stochastics and RSI are pointing towards the potential for a continued bullish push, crossing their medians but remaining below overbought conditions.GBP/USD Chart, 15-MinuteSpot rate 1.3166 Relative change 0.15% High 1.3175 Low 1.3135     Trend Sideways to bullish     Support 1 1.3118 (previous day high) Support 2 1.3057 (200-hour EMA) Support 3 1.3034 (50-day EMA)     Resistance 1 1.3213 (July 26th swing high) Resistance 2 1.3294 (200-day EMA) Resistance 3 1.3350 (major technical level)  

According to analysts at Goldman Sachs, the 'bottom line' for the Reserve Bank of Australia (RBA) will be keeping the central bank on hold well into t

According to analysts at Goldman Sachs, the 'bottom line' for the Reserve Bank of Australia (RBA) will be keeping the central bank on hold well into the future.Key highlightsAs GS noted, The RBA's September Board Meeting Minutes remained overall positive with very little adjustments to the overall outlook, while the RBA did make a point of noting above-trend growth and a still-declining unemployment rate, coupled with a slow-yet-steady improvement in wage growth. The RBA, according to GS, looks comfortable with the current developments within the Australian housing markets, despite the recent mortgage rate hikes made by some Aussie banks. Because of the RBA's comfy-looking stance on current economic conditions, GS is expecting any adjustments on rates to not materialize until sometime towards the tail-end of 2019.

New Zealand Current Account (QoQ) registered at $-1.62B, below expectations ($-1.05B) in 2Q

New Zealand Current Account - GDP Ratio came in at -3.3%, below expectations (-2.8%) in 2Q

New Zealand Current Account (QoQ) registered at $-1.619B, below expectations ($-1.05B) in 2Q

EU's chief Brexit negotiator is playing ball with PM may over Irish border according to the UK's press which have reported that May has said, " the wi

EU's chief Brexit negotiator is playing ball with PM may over Irish border according to the UK's press which have reported that May has said, " the withdrawal agreement is virtually agreed", read in the UK's Daily Express. On the eve of a key EU leaders' summit, EU's chief Brexit negotiator Michel Barnier said he is "ready to improve" backstop plans for preventing a hard Irish border after Brexit.
 

Greg Gibbs, founder, analyst, & PM at Amplifying Global FX Capital Pty Ltd, (AmpGFX) explained that the USA fired off its biggest missile yet in its t

Greg Gibbs, founder, analyst, & PM at Amplifying Global FX Capital Pty Ltd, (AmpGFX) explained that the USA fired off its biggest missile yet in its trade war with China and has rolled up more artillery. Key Quotes:"There is little doubt that they are in for the long fight and this poses significant downside risks for Asian markets." "AUD has been a proxy for tariffs and rebounded on Tuesday, in-line with a bounce in Asian currencies and equities." "But the trade war suggests this reprieve may be short-lived.  If you close one eye, the Australian economy is performing well, and the AUD looks cheap." "But if you open both eyes, the downside risk coming from China, housing and the next election is large." "The falling Australian housing market may bring to the surface more problems for banks over past lending practices." "New Zealand economic survey data is pointing to a weak second half and rising risk of significant further RBNZ rate cuts."

The AUD/USD managed to gain some ground on Tuesday, vaulting over the 0.7200 handle as rising equities helped bolster the Aussie. The Reserve Bank of

The AUD/USD popped on Tuesday despite US-China tariffs continuing to ramp up.After yesterday's as-expected RBA showing, the econ calendar for the Aussie remains tepid at best.The AUD/USD managed to gain some ground on Tuesday, vaulting over the 0.7200 handle as rising equities helped bolster the Aussie. The Reserve Bank of Australia (RBA) delivered little of note yesterday, and broader markets took a moment to pause as the US imposed further tariffs on China, to come into effect next Monday, and traders will be keeping an eye out for a response from China. The AUD, tired of getting sold off across the marketscape, took a step up over the 0.7200 technical level on the back of bumping equities that recovered from the risk-off tariff response earlier in the day. Wednesday is a thin showing for the AUD/USD except for a speech from the RBA's Kent at 01:30 GMT, who is expected to tow the familiar line being delivered by the Australian central bank.AUD/USD levels to watchAussie bulls will be hoping for a continuation of the early week's long bias, and momentum thus far remains on their side, according to FXStreet's own Valeria Bednarik: "the pair tested a couple of times the resistance at 0.7225, the 50% retracement of its latest daily slide, but so far remain unable to break above it. A bullish breakout will depend on market mood, rather than on data, as a continued advance in equities, and commodities will likely keep the Aussie supported. Technical readings in the 4 hours chart support additional gains, as the price settled above its 20 and 100 SMA, with the longer one still heading lower and above the shortest one, while technical indicators remain within positive levels, the Momentum advancing to fresh weekly highs and the RSI currently stable at around 60." Support levels: 0.7190 0.7165 0.7130    Resistance levels: 0.7225 0.7260  0.7300

New Zealand Westpac consumer survey: 103.5 (3Q) vs previous 108.6

Analysts at Scotiabank explained that sterling retains a firmer undertone overall but we remain concerned that gains may be based on rather fragile fo

Analysts at Scotiabank explained that sterling retains a firmer undertone overall but we remain concerned that gains may be based on rather fragile foundations. Key quotes:"Market sentiment has recently been cheered by suggestions that the UK/EU can reach a deal in the next few weeks but there is precious little hard evidence that any of the major differences have been addressed at this point." "PM May reiterated that there was only one alternative to her Chequers plan and that was a “no deal” divorce. We think the GBP may be able to extend gains in the short run but reality may bite back as the clock runs down for an agreement later this year." "GBP/USD short-term technicals: neutral/bullish – Sterling has risen steadily through Sep so far and broader patterns (gains above the 1.2950/1.3050 range earlier this month) suggest scope for the rally to extend towards 1.33 (38.2% Fib retracement of the 1.47/1.26 drop)." "Intraday patterns are looking a little tired and loss of support around 1.3115 may trigger modest corrective losses to the 1.3050/75 area. Resistance intraday is 1.3175."

Analysts at Nomura explained that in reaction to the US decision to initially start with a 10% tariff on $200bn imports from China yesterday, China an

Analysts at Nomura explained that in reaction to the US decision to initially start with a 10% tariff on $200bn imports from China yesterday, China announced retaliatory tariffs of 5% or 10% on an additional $60bn imports from the US, taking effect on 24 September, as China had previously announced on 3 August.Key Quotes:"Although President Trump took to Twitter and warned of more retaliatory measures against China around the same time Beijing’s action was announced, as of the time of this writing there has been no official statement released from the Trump administration on a threatened third tranche of tariffs on $267bn imports from China." "Beijing’s announcement today brings the total amount of US goods subject to Chinese tariffs to about $110bn. Importantly, China chose not to match the US tariff rate of 25% on $200bn imports, and set the rates at 5% or 10% instead. Thus, China’s retaliatory measures appear more measured and consistent with its restrained approach so far in dealing with China-US trade tensions." "It appears likely that the tariff rates on US products will be raised once US tariff rates on Chinese goods are raised to 25% on 1 January 2019. In the statement, Beijing indicated that it hopes to have dialogues while threatening further tariffs if the US retaliates. However, given continued escalation in trade tensions by the US, it remains unclear if any high-level US-China negotiation ahead of the next G20 leader summit from 30 November to 1 December will yield any material results. While survey measures have been resilient despite ongoing tensions, we continue to see a notable risk that the recent escalation could lead to a material deterioration of US business and consumer sentiment."

Analysts at Scotiabank explained that the JPY was down overnight and was making fresh two month lows, underperforming all of the G10 currencies. Key

Analysts at Scotiabank explained that the JPY was down overnight and was making fresh two month lows, underperforming all of the G10 currencies.Key Quotes:"Trade tensions are providing headline risk however the broader tone appears remarkably resilient leaving JPY unable to benefit from risk aversion." "The outlook for relative central bank policy remains dominant into the upcoming BoJ policy decision." "No changes are expected and interest rate differentials continue to widen in a JPY-negative manner."

NZD/USD trades in a 50 pip ATR 14 between the 21-D SMA and 10-D SMA with higher highs and lows on two daily sticks, with rallies capped by the descend

NZD/USD is tracking the Aussie which has remained resilient in the face of US trade policy and the uncertainty that continues to dominate as market participants assess the latest developments in the U.S.-China trade dispute and ongoing NAFTA negotiations. NZD/USD is currently trading at 0.6568, down from 0.6608 but off the 0.6561 lows. NZD/USD trades in a 50 pip ATR 14 between the 21-D SMA and 10-D SMA with higher highs and lows on two daily sticks, with rallies capped by the descending trend line. The greenback has been under pressure of late due to lower inflation readings and key misses in various data that threw the prospects of a December hike into the air.The table about to turn for the dollar?However, the tables may well be turning as we head into the FOMC next week while Central Banks elsewhere are left behind, bring the divergence trade back to the table. The DXY has found a base down at 93.107 (50% fib) on the weekly sticks and then 94.02 (38.2% fibo) on the weekly. However, on the same sticks, the candles are bearish - bulls need a break above the 21-D SMA at 95.00 in the first instance to negate the downside pressure which should knock EM-FX, the CHN and antipodeans down a few pegs.  As for Kiwi data today, analysts at TD Securities explained that for the Q2 current account we look for exports to lift by +4.2%/q and imports to rise by +2%/q, for a trade surplus of +$NZ1b. Exports of dairy, meat and fruit all expanded in the quarter. After accounting for a wide invisibles deficit, the current account deficit is expected to be -$NZ1.3b, or -3% of GDP (mkt -$NZ1.3% and 2.9%). We will also look for confirmation that net exports add around +¼%pt to Q2 GDP growth (released tomorrow)."NZD/USD levelsThe 21-D SMA caps for now but a broke there opens 0.6685 1st July lows. However, 0.6711 would be the 76.4% retracement of the daily downtrend from 0.7393. The next target would be the 61.8% retracement target of the same sell-off at 0.6841 (this falls in line with the lows of 15th May). A continuation of the downside and break of 0.6500 would open up 0.6344 and 0.6306 on the wide. 

S&P500 daily chart Spot rate:                  2,905.75 Relative change:       0.56%      High:                         2,910.75 Low:          

Bulls came back and keep extending the longest run ever in US equities.The S&P500 Index is trading above its 50, 100 and 200-period simple moving averages which are all rising and widening while the RSI, MACD and Stochastics indicators keep being constructive. The next objective for bulls will be to retake the all-time-high and to travel towards 2,938.00 and 2,950.00S&P500 daily chartSpot rate:                  2,905.75
Relative change:       0.56%     
High:                         2,910.75
Low:                          2,879.25 Main trend:               Bullish Resistance 1:           2,917.00 all-time-high
Resistance 2:           2,938.00, 138.2% Fibonnacci extension (Aug-Sept, high/low)
Resistance 3:           2,950.00, 161.8% Fibonnacci extension (Aug-Sept, high/low) Support 1:                2,900.00 figure
Support 2:                2,877.00 January swing high
Support 3:                2,863.75 August 7 high
Support 4:                2,853.00 August 9 low