MNI China Daily Summary: Monday, October 14

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CHINA SEP EXPORTS +2.4% Y/Y VS MEDIAN +6.0% Y/Y: CUSTOMS

EZ/UK Bond Supply Calendar: Luxembourg Synd; UK, FI Due Tuesday

MNI: CHINA YTD EXPORTS +6.2% Y/Y IN YUAN TERM: CUSTOMS

MNI BRIEF: China Sep CPI Slows To 0.4% Y/Y On Base Effects

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FOREX: Lower Core Yields Provide Moderate JPY Boost

FOREX
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  • In stark contrast to the state of the week, currency markets have traded in a very subdued manner Friday, with lower core yields moderately boosting the likes of the Japanese Yen and Swiss Franc.
  • USDJPY trades down 0.45% as markets very gradually reversed the swift gains following Thursday’s jobless claims data in the US. The pair fell just shy of 147.90 resistance overnight and continued to trade with a bearish tilt throughout the session, reaching as low as 146.27 before stabilising around 146.60 as we approach the close.
  • Note that the USDJPY bear trend remains in an extreme oversold condition, and the latest recovery - a correction - is allowing this condition to unwind. Given the extreme volatility, technical levels of note include initial firm resistance at 151.57, the 20-day EMA and bear trigger support at 141.70, the Aug 5 low.
  • In similar vein, the Swiss Franc traded on the front foot, rallying around 0.25% against its major G10 counterparts.
  • EURUSD exhibited a 22pip range on the session as a lack of tier-one data and the aftermath of a busy week curtailed volatility.
  • Mixed employment data from Canada (lower jobs change, lower unemployment rate) was unable to spur any momentum for the Canadian dollar, which also trades close to unchanged around 1.3725. Trend conditions in USDCAD remain bullish and recent gains reinforce this theme. The most recent retracement appears to be a correction and is allowing an overbought condition to unwind.
  • Inflation data from the UK and US headline next week, with central bank decisions also scheduled in New Zealand and Norway.
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  • In stark contrast to the state of the week, currency markets have traded in a very subdued manner Friday, with lower core yields moderately boosting the likes of the Japanese Yen and Swiss Franc.
  • USDJPY trades down 0.45% as markets very gradually reversed the swift gains following Thursday’s jobless claims data in the US. The pair fell just shy of 147.90 resistance overnight and continued to trade with a bearish tilt throughout the session, reaching as low as 146.27 before stabilising around 146.60 as we approach the close.
  • Note that the USDJPY bear trend remains in an extreme oversold condition, and the latest recovery - a correction - is allowing this condition to unwind. Given the extreme volatility, technical levels of note include initial firm resistance at 151.57, the 20-day EMA and bear trigger support at 141.70, the Aug 5 low.
  • In similar vein, the Swiss Franc traded on the front foot, rallying around 0.25% against its major G10 counterparts.
  • EURUSD exhibited a 22pip range on the session as a lack of tier-one data and the aftermath of a busy week curtailed volatility.
  • Mixed employment data from Canada (lower jobs change, lower unemployment rate) was unable to spur any momentum for the Canadian dollar, which also trades close to unchanged around 1.3725. Trend conditions in USDCAD remain bullish and recent gains reinforce this theme. The most recent retracement appears to be a correction and is allowing an overbought condition to unwind.
  • Inflation data from the UK and US headline next week, with central bank decisions also scheduled in New Zealand and Norway.