MNI China Daily Summary: Wednesday, March 12

MNI BRIEF:Direction Of Inflation Shocks Harder To Call-Lagarde

MNI BRIEF: EU Targets Retaliation Tariffs On US Red States

MNI BRIEF: China To Boost Environmental Equipment Industry

MNI BRIEF: China SME Index Highest Since June 2021

MNI China Press Digest March 12: FDI, Cars, Retail Sales

MNI: US MBA: MARKET COMPOSITE +11.2% SA THRU MAR 07 WK

MNI: JAPAN FEB CORP GOODS PRICE INDEX +4.0% Y/Y; JAN +4.2%

MNI: USDA: 2024/2025 CORN PRODUCTION EST 14.87B BSL

GERMANY: Union/SPD Migration Alignment After Turmoil Threatened Debt Deal (BILD)

GERMANY: Official Interim Election Results Tilt Towards Missing BSW & FDP

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FOREX: Greenback Retreats Further as US Election Results Beckon

FOREX
  • Despite the odds for a Trump victory firming on Tuesday and an associated reversal higher for US yields, the dollar’s resolve is being tested and the USD index has extended session declines to 0.5% as the APAC crossover approaches.
  • There has been broad strength for G10 currencies against the dollar, with AUD a notable outperformer and the Swiss Franc displaying a relatively contained trading range.
  • For AUDUSD (+0.75%), the move has been assisted by the RBA maintaining a hawkish stance overnight, having seen little change in the economy over the last few months to warrant an adjustment to its higher-for-longer strategy.
  • Price action narrows the gap to initial resistance at 0.6648, the 20-day EMA. The more significant 50-day resides at 0.6691, which may limit the short-term topside given overnight straddle pricing currently points to a ~50pip move either side of the strike.
  • USDJPY (-0.35%) has also edged back below the 152 handle on Tuesday, printing a pullback low of 151.38. With the election remaining a close call, any early leanings towards a Harris victory could further weigh on USDJPY and there remains plenty of downside before initial firm support at 149.11, the 50-day EMA. The 20-day EMA is at 150.86.
  • Significant volatility has already been seen in the Mexican peso, rising as high 20.3560, before sharply paring that advance back to 20.18 at typing. USDMXN overnight implied vol did clear 100 points - an all-time high for the contract. This implied a ~4% swing for USD/MXN on the results, and will place the pair under the spotlight as results begin to emerge.
  • New Zealand employment data will play second fiddle to the US election developments overnight. Central bank decisions from Sweden, Norway, the BOE and Fed are all due Thursday. 
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