Packed Data Docket

A busy data session in Asia-Pac so far has failed to inspire dramatic price action.

• AUD looking slightly soft after flash retail sales fell 4.2% in December, compared to an expectation of a 4.2% decline, the weak print erased gains sustained earlier in the wake of stronger manufacturing PMI.
• NZD is faring slightly better in minor positive territory, but off session highs. Westpac have backpedalled on their RBNZ easing call and said that they now expect no OCR reductions in the foreseeable future, ditching their earlier forecast of two 25bp cuts in 2021. CPI data earlier in the session rose above estimates which also supported the bid.
• JPY is slightly weaker, Japanese CPI deflation accelerated, with the index falling 1.2% Y/Y vs. exp. of a 1.3% slide. Core CPI printed at -1.0% Y/Y vs. exp. of -1.1%. Jibun Bank M'fing PMI suggested that Japan's manufacturing sector returned into contraction, with headline index deteriorating to 49.7 from 50.0. Elsewhere there are press reports that the Japanese government has privately concluded the Tokyo Olympics will not go ahead this year.
• EUR is slightly higher while GBP has dropped back. EUR/GBP some 46 pips higher. There are reports that France will require all visitors to have a negative Covid-19 test, while in the UK ministers are reportedly pushing for Britain's borders to be closed.
• The PBOC fixed USD/CNY at 6.4617, the banks liquidity injections matched withdrawals today despite repo rates creeping up. A stronger greenback has helped firm USD/CNH despite the lower fix. The fix was once again above sell side estimates, indicating the PBOC asymmetric response function.