Aussie downed by poor Australian housing data; UK construction PMI eyed

Broad-based US dollar recovery from post-NFP troughs was the main theme in Asia this Monday, with an eventful macro calendar offering some impetus to the traders amid holiday-thinned markets this week. The Chinese markets are closed on a week-long break on account of the Chinese New Year.

An unexpected slump in the Australian building permits data dragged the AUD/USD pair back towards the 0.72 handle, with the recovery attempts capped near 0.7250 region. Meanwhile, the Kiwi also traded on the back foot below 0.6900 levels amid negative tone seen across the commodities and mixed Asian stocks. The Yen also remains strongly offered against the greenback, driving the USD/JPY pair back towards the 110 mark. Markets continued to cheer the optimism around the strong US jobs report, as gold prices on Comex traded below the 1320 levels.

Main Topics in Asia

Brexit progress, or there lack of: Britain would permanently regret leaving

Fed’s Kashkari: Issues the Fed is nervous about include slowing global growth

UK BrexitMin Barclay to work with compromise Brexit plan Conservatives on Monday

German Govt Doc: Germany could face budget deficits for years to come – Bild

Sources: EU agrees no-deal Brexit compensation for Irish farmers – Sunday Times

Australia: Dwelling approvals down sharply – Westpac

Gold Technical Analysis: Rising wedge restricts the surge

WTI oil fades the drop to $55, upside favored on tightening supplies

NZ Treasury: Early indicators for the December quarter point to a pickup in growth

USD/INR hits highest since Dec. 17, eyes 100-day MA hurdle

Asian stocks report modest gains, USD strengthens on strong jobs report

Key Focus Ahead

The European calendar on the first trading day of the week appears relatively busy, with the UK construction PMI and Eurozone Sentix Investor confidence data to headline, in absence of first-tier economic releases. The UK construction PMI, due at 0930 GMT, is expected to drop to 52.6 in January vs. 52.8 previous. Also, in focus will remain the Eurozone PPI figures for some trading incentives. In the NA session, the US factory orders data will be closely eyed at 1500 GMT amid other minority reports.

Besides, the ECB Governing Council member Mersch’s speech and FOMC member Mester’s speech will also garner some attention later on Monday.

EUR/USD: Indecisive market, bulls need break above 1.1570

Essentially, the pair created a classic doji candle last month, which is widely considered a sign of indecision in the market place. The next big move depends on the follow-through to that doji candle. 

GBP/USD: Eyes on Irish backstop issue, UK construction PMI

At the data front, the January month Construction purchasing manager index (PMI) for the UK is expected to print 52.6 against 52.8 figure for the month of December 2018.

UK BrexitMin Barclay to work with compromise Brexit plan Conservatives on Monday

Following the recent Brexit-related news over the weekend, Reuters reports the statement out from the UK PM Theresa May’s office that the UK Brexit Minister Stephen Barclay will hold a meeting of a new working group of Conservative lawmakers on Monday …

RBA: Less upbeat tone likely tomorrow – TDS

According to Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities, the tone of the RBA’s Feb statement is likely to be less upbeat than the Dec statement, but the statement is likely to disappoint the doves.



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