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Asia FX Market Prep for Monday the 27th of April

Asia FX Market Prep for Monday the 27th of April

The dollar was little changed Friday, leaving it up for the week, as stocks climbed and U.S. President Donald Trump signed a $484 billion spending package to bolster the economy. The euro was the best performer among Group-of-10 currencies, while the Canadian dollar lagged even as oil rebounded. Long-term Treasury yields fell as the Federal Reserve said it will reduce the pace of its purchases next week.

WHAT TO WATCH:

  • Bank of Japan policy decision
  • Hong Kong imports and exports

FRIDAY TRADING SESSIONS:

  • The Bloomberg Dollar Spot Index was little changed Friday; greenback traded within a +0.3% and -0.2% range on the day; up 0.9% on the week
  • Asia Pacific G-10 FX (as of late Friday in New York)
    • USD/JPY -0.1% to 107.46; greenback falls for 3rd straight week vs the Asian currency
    • AUD/USD +0.4% to 0.6394; aussie up for third straight week
    • NZD/USD +0.2% to 0.6018; kiwi fell a second week
  • The benchmark 10-year Treasury yield was down -0.07bp to 0.6008%

TOP NEWS:

  • Pelosi, McConnell Set to Collide on Follow-Up to $3 Trillion Aid
  • Fed Trims QE Treasury Buying Even Further to $10 Billion a Day
  • Boeing Scraps $4.2 Billion Embraer Deal as Market Shrinks
  • U.S. Cases Rise 4.5%; U.K. Premier Returns to Work: Virus Update
  • Gilead Poised to Upend Market With Its First Covid-19 Study Data
  • Italy Affirmed at BBB by S&P; United Kingdom Affirmed at AA by S&P

KEY VIEWS:

  • Treasury Investors See 20-Year Issue Hurting 30-Year: JPMorgan

DATA RELEASED FRIDAY:

  • U.S. durable goods orders, March, -14.4% vs est. -12.0%
  • U.S. University of Michigan Sentiment, April, at 71.8 vs est. 68.0

ECONOMIC DATA (All times HK):

  • TBA: (Japan) April BOJ Policy Balance Rate, est. -0.1%, prior -0.1%
  • TBA: (Japan) 2Q BOJ CPI Current Forecast, prior 0.6%
    • April BOJ 10-Yr Yield Target, est. 0.0%, prior 0.0%
    • 2Q BOJ CPI Current Forecast +1, prior 1.0%
    • 2Q BOJ CPI Current Forecast +2, prior 1.4%
    • 2Q BOJ GDP Current Forecast, prior 0.8%
    • 2Q BOJ GDP Current Forecast +1, prior 0.9%
    • 2Q BOJ GDP Current Forecast +2, prior 1.1%
  • 9:30am: (China) March Industrial Profits YoY
  • 4pm: (Taiwan) March Monitoring Indicator, prior 24
  • 4:30pm: (Hong Kong) March Exports YoY, est. -14.6%, prior 4.3%
    • March Imports YoY, est. -16.1%, prior -0.1%
    • March Trade Balance HKD, est. -38.2b, prior -38.6b

GOVERNMENT:

  • Nothing major scheduled

CENTRAL BANKS (All times HK):

  • TBA: (Japan) BOJ Policy Balance Rate, est. -0.1%, prior -0.1%
    • BOJ 10-Yr Yield Target, est. 0.0%, prior 0.0%

BOND SALES/PURCHASES (All times HK):

  • 9:30am: Korea to Sell KRW 1.1Tln 3-Year Bond
  • 9:30am: Korea Central Bank to Sell KRW 600Bln 1-Year Bond
  • 10:30am: Korea to Sell KRW 1.6Tln 3-Year Bond

MARKETS as of late Friday in New York

  • USD/JPY -0.1% to 107.46 (range 107.37-107.76)
  • EUR/USD +0.4% to 1.0819 (range 1.0727-1.0820)
  • AUD/USD +0.4% to 0.6394 (range 0.6337-0.6394)
  • NZD/USD +0.2% to 0.6018 (range 0.5976-0.6018)
  • USD/CAD +0.2% to 1.4097 (range 1.4024-1.4120)
  • GBP/USD +0.2% to 1.2364 (range 1.2298-1.2377)
  • USD/CHF -0.2% to 0.9741 (range 0.9728-0.9803)
  • 1-mo. USD/TWD NDF +0.2% to 29.915
  • Bloomberg Dollar Spot Index little changed at 1260.89
  • JPM Emerging Mkt FX Index -0.2% to 52.27
  • JPM FX Volatility Index +1.6% to 9.78
  • U.S. stocks higher
    • S&P 500 +1.4% to 2836.74
    • ​​​​​​ DJIA +1.1% to 23775
  • Commodities:
    • ​​​​​​WTI Crude +3.6% to $17.10/bbl
    • Gold -0.2% to $1,727/oz (range $1,711-$1,736)
    • Copper +0.8% to $2.3365/lb

TECHNICAL OUTLOOK (simple overview)

  • USD/JPY — Keeps bearish tone
    • Resistance: 108.32, 200-DMA; 109.38, April 6 high
    • Support: 106.92, April 1 low; 106.76, March 18 low
  • EUR/USD — Bearish bias on series of lower highs; 21-DMA caps
    • Resistance: 1.0885, April 22 high; 1.0900, 21-DMA
    • Support: 1.0738, lower Bollinger; 1.0636, YTD low
  • EUR/JPY — Bearish bias on new three-year low
    • Resistance: 117.28, conversion line; 117.50, April 16 high
    • Support: 115.83, lower Bollinger; 114.85, April 17, 2017 low
  • AUD/USD — Bullish tone above 55-DMA
    • Resistance: 0.6445, April 14 high; 0.6492, March 12 high
    • Support: 0.6351, 55-DMA; 0.6254, April 21 low
  • NZD/USD — Consolidating near 21-DMA
    • Resistance: 0.6092, April 20 high; 0.6131, April 14 high
    • Support: 0.5920-22, April 7 and April 16 lows; 0.5844, April 3 low
  • USD/KRW — Bullish tone above 55-DMA
    • Resistance: 1,249.65, March 24 low; 1,296.75 YTD high;
    • Support: 1215.45, 55-DMA; 1205.20, March 27 low
  • USD/THB — Neutral bias after pivoting higher
    • Resistance: 32.792, April 14 high; 33.177, YTD high
    • Support: 32.102, March 13 high; 31.926, Feb. 26 high
  • USD/SGD — Flag continues to form above Feb. 20 high
    • Resistance: 1.4416, April 3 high; 1.4511, March 26 high
    • Support: 1.4119, March 12 high; 1.4053, March 16 low
  • USD/TWD — Remains steady near 55-DMA
    • Resistance: 30.486, Feb. 24 high; 30.583, Nov. 14 high
    • Support: 29.880, March 4 low; 29.850, YTD low
  • USD/MYR — Consolidation below YTD high
    • Resistance: 4.4032, April 22 high; 4.4490 YTD high
    • Support: 4.2435, Feb. 26 high; 4.2172, March 9 high
  • USD/PHP — Neutral bias as orbits 100-DMA
    • Resistance: 51.160, 200-DMA; 51.630, April 16, 2019 low
    • Support: 50.550, March 11 high; 50.370, YTD low
  • USD/INR — Nears YTD high as fills gap
    • Resistance: 76.9163, YTD high; 77.1714, upper Bollinger
    • Support: 74.4175, March 18 high; 74.3150, March 27 low
  • USD/IDR — Keeps bearish tone, eyes gaps at lower levels
    • Resistance: 15880, April 9 low; 16070, March 27 low
    • Support: 15224, March 18 high; 14968, March 16 high
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