AUD: AUD/USD - Challenging 0.6750 As The USD Falls
The AUD/USD had a range overnight of 0.6724-0.6747, Asia is trading around {AUDUSD Curncy}. The AUD pushed strongly up through 0.6730 and is challenging 0.6750 highs at the moment. The AUD price action remains constructive, can it get the momentum it needs to break and extend higher. I find it tough to reconcile going long AUD when risk is under pressure, but the price action in the USD is not looking good for the moment and this continues to provide it with tailwinds. In the Asian session, watch for support initially should we dip back toward the 0.6700-0.6720 area looking to challenge the 0.6750 area at some point again and then beyond.
- Bloomberg - “The Danish pension fund AkademikerPension, said it will exit the US debt market by the end of the month, it holds only about $100 million of Treasuries. While the Danish pension fund tied its decision to unsustainable US fiscal trends and not to the Greenland initiative, the European Union effectively suspended the ratification of a trade agreement reached with the US last year following the threats against countries that oppose it.”
- Bloomberg - “Macquarie Group’s asset management arm is in talks to buy Axiata Group Bhd.’s telecom infrastructure business, according to people with knowledge of the matter.”
- Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6800(AUD394m). Upcoming Close Strikes : 0.6800(AUD591m Jan23), 0.6800(AUD494m Jan26) - BBG
- The AUD/USD Average True Range for the last 10 Trading days: 42 Points
- Data/Event: Westpac Leading Index
Fig 1: AUD/USD spot Weekly Chart
Source: MNI - Market News/Bloomberg Finance L.P
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JPY: USD/JPY - Surges Higher After BOJ, Focus Turning Toward 160
The Friday night range was 155.98 - 157.78, Asia is currently trading around {USDJPY Curncy}. The BOJ is in a tough spot, hike rates and your currency explodes higher. The minimal reduction in differentials is not incentivizing a market that is concerned about Japan’s Fiscal policy to start buying Yen. A test of the BOJ/MOF resolve looks inevitable at the moment as the market turns its focus to the important 160.00 area. Technically USD/JPY remains in an uptrend, while the first support back toward the 152.50-154.50 area holds it remains a buy on dips. In today's Asian session, we might get some reversion back to the mean after such a strong move on Friday but look for buyers to reemerge on dips back toward the 15.60-90 area initially.
- Bloomberg - “Yen Needs a Volatility Shock as Policy Normalization Falls Short. While the Bank of Japan’s latest rate increase represents further progress toward normalizing rates back toward neutral levels, it does little to meaningfully improve Japan’s deeply negative real-rate profile. Governor Kazuo Ueda’s emphasis on optionality, coupled with the absence of explicit forward guidance, reinforces expectations that tightening will proceed only gradually.” {NSN T7J0JBKGIFPG <GO>}
- MNI BOJ WATCH: Ueda Signals More Hikes, Timing Unclear. Bank of Japan Governor Kazuo Ueda laid the groundwork for further interest rate increases, but provided little clue as to timing and stressed that policymakers must examine the impact of higher rates on the economy, inflation and financial conditions
- Options : Close significant option expiries for NY cut, based on DTCC data: 155.00($1.25b), 156.00($870m), 157.50($1.22b). Upcoming Close Strikes : 156.00($1.32b Dec 23), 158.00($868m Dec 23) - BBG.
- The USD/JPY Average True Range(ATR) for the last 10 Trading days: 101 Points
- Data/Event : Tokyo Condominiums for Sale YoY
Fig 1 : USD/JPY Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
ASIA: Government Bond Issuance Today
- Bank of Korea to Sell KRW500 bn 91-Day Bonds
- South Korea to Sell KRW800 bn 5-Year Bonds
- Hong Kong to Sell 40 Billion 6-M PBOC Bills
ASIA: Coming Up in Asia Today
| 0200GMT | 0900HKT | 1100AEDT | South Korea Exports 20 Days YoY |
| 0200GMT | 0900HKT | 1100AEDT | South Korea Imports 20 Days YoY |
| 0300GMT | 1000HKT | 1200AEDT | CHINA 1-Year Loan Prime Rate |
| 0300GMT | 1000HKT | 1200AEDT | CHINA 5-Year Loan Prime Rate |
| 0530GMT | 1230HKT | 1430AEDT | Thailand Car Sales NOVEMBER |
| 0600GMT | 1300HKT | 1500AEDT | Malaysia CPI YoY NOVEMBER |
| 0600GMT | 1300HKT | 1500AEDT | Malaysia Foreign Reserves |
| 1000GMT | 1700HKT | 1900AEDT | Taiwan Unemployment Rate |
| 1030GMT | 1730HKT | 1930AEDT | Hong Kong BoP Current Account Balance 3Q |
| 1030GMT | 1730HKT | 1930AEDT | Hong Kong BoP Overall 3Q |
| 1030GMT | 1730HKT | 1930AEDT | Hong Kong CPI Composite YoY NOVEMBER |
| 1330GMT | 2030HKT | 2230AEDT | India Eight Infrastructure Industries NOVEMBER |
source: Bloomberg Finance LP / MNI
