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THE ASIA FX/RATES DAYBOOK: FX/RATES DAYBOOK ASIA: Treasuries Fall, Dollar Steady

(Bloomberg) — Treasury yields extended rebound from YTD lows reached at end of last week, while pound saw strong advance on better-than-expected U.K. inflation data. Yen tumbled and dollar eked out a small gain. WHAT TO WATCH

  • Australia Westpac Consumer Confidence
  • Bank of Japan bond purchases; see more below

OVERNIGHT TRADING SESSIONS

  • GBP/USD rose to a new YTD high $1.3298 after the U.K.’s strongest inflation print since August 2011; USD/JPY gained past 110.00 for first time in more than a week
  • UST yields rose by 1.5bp-4bp across the curve; 10Y sector led losses, cheapening the 5s10s30s fly; stocks climbed to records
  • In European trading, GBP rose to $1.3282 ; USTs stumbled, with yields higher by 1bp-2.5bp across the curve, 10Y by 2.3bp and 5s10s30s fly cheaper by ~1bp

TOP OVERNIGHT NEWS

  • Yellen is among the contenders being considered by Trump to run the Fed after her current term expires in February, Treasury Secretary Mnuchin said
  • Two top Trump administration officials said it may not be possible for Trump to deliver on his promise to cut corporate tax rates to 15%
  • Mnuchin warned the U.S. may impose additional sanctions on China — potentially cutting off access to the U.S. financial system — if it doesn’t follow through on a fresh round of UN restrictions against North Korea
  • JPMorgan Chase CEO Jamie Dimon said he would fire any employee trading bitcoin for being “stupid”
  • Malaysia Airlines is closing in on a multibillion-dollar order for Boeing 787 Dreamliners, 737 Max 10 jets and General Electric engines, Malaysian PM Najib said at a meeting with Trump at the White House

KEY VIEWS

  • A market correction could start “very soon” prompted by events such as “North Korea, a disappointing earnings report, anything,” said Omega Advisors’ Leon Cooperman

DATA RELEASED OVERNIGHT

  • JOLTS job openings rose to record 6.17m in July vs est. 6m, highlighting robust labor conditions; quits rate rose to 2.2%

ECONOMIC DATA (All times HK):

  • 5am: (South Korea) Aug. Import Price Index MoM, prior 0.4%
    • Aug. Export Price Index MoM, prior 1.0%
    • Aug. Import Price Index YoY, prior 5.4%
    • Aug. Export Price Index YoY, prior 8.0%
  • 6:45am: (New Zealand) Aug. Food Prices MoM, prior -0.2%
  • 7am: (South Korea) Aug. Unemployment rate SA, est. 3.7%, prior 3.6%
  • 7:50am: (Japan) 3Q BSI Large All Industry QoQ, prior -2
    • 3Q BSI Large Manufacturing QoQ, est. 5, prior -2.9
    • Aug. PPI MoM, est. 0.1%, prior 0.3%
    • Aug. PPI YoY, est. 2.95%, prior 2.6%
  • 8:30am: (Australia) Sept. Westpac Consumer Conf Index, prior 95.5
    • Sept. Westpac Consumer Conf SA MoM, prior -1.2%

CENTRAL BANKS (All times HK):

  • 9:10am:
    • BOJ Outright Bond Purchase 1-3 Years
    • BOJ Outright Bond Purchase 3-5 Years
    • BOJ Outright Bond Purchase 5-10 Years

GOVERNMENT:

  • Japan PM Abe begins three-day visit to India

BOND SALES/PURCHASES (All times HK):

  • For corporate bonds, see New Issue Monitor
  • 9am: Australia Plans to Sell A$900.0m 2.75% 2028 Bonds
  • 10:35am: China To Sell CNY28.0b 2-Year Bonds
    • China to Sell CNY40.0b 5-Year Upsized Bonds
  • 11am: Thailand Plans To Sell THB25.0b Bonds Due 2022
  • 12:30pm: Taiwan to Sell TWD40.0b 2-Year NCD
  • 5:30pm: Vietnam To Sell VND500.0b 5- Year Bonds
    • Vietnam To Sell VND500.0b 7-Year Bonds
    • Vietnam To Sell VND500.0b 10-Year Bonds
    • Vietnam To Sell VND500.0b 15-Year Bonds
  • 5:30pm: Sri Lanka to Sell LKR13.0b 182-Day Bills
    • Sri Lanka to Sell LKR10.0b 364-Day Bills
  • 5:30pm: India to Sell INR100.0b 91-Day Bills
    • India to Sell INR60.0b 364-Day Bills

MARKETS as of ~4:15am in HONG KONG

  • USD/JPY +0.7% to 110.17 (range 109.24-110.25)
  • EUR/USD +0.1% to 1.1965 (range 1.1926-1.1978)
  • AUD/USD -0.1% to 0.8019 (range 0.7998-0.8049)
  • NZD/USD +0.5% to 0.7289 (range 0.7217-0.7321)
  • USD/CAD +0.6% to 1.2184 (range 1.2083-1.2190)
  • GBP/USD +0.9% to 1.3283 (range 1.3161-1.3298)
  • USD/CHF +0.4% to 0.9605 (range 0.9545-0.9618)
  • 1-mo. USD/TWD NDF -0.1% to 29.92
  • USD/CNH little changed at 6.5365 (range 6.5324-6.5518)
  • Bloomberg Dollar Spot Index +0.1% to 1143.39
  • JPM Emerging Mkt FX Index -0.3% to 71.02
  • JPM FX Volatility Index -0.5% to 8.20
  • U.S. stocks higher
    • S&P 500 +0.3% to 2496.48
    • DJIA +0.3% to 22119
  • Commodities:
    • WTI Crude +0.4% to $48.26/bbl
    • Gold +0.3% to $1,331/oz (range $1,323-$1,332)
    • Copper -1.2% to $6,668/mt

TECHNICAL OUTLOOK by Bloomberg strategist Vincent Cignarella

  • USD/JPY — Higher toward 50-DMA
  • Resistance: 110.47 Sept. 1 high; 110.66 50-DMA
  • Support: 109.51 Sept. 11 high; 109.27 Sept. 7 high
  • EUR/USD — Rally stalled at 1.2092 5th major wave
  • Resistance: 1.2015 Sept. 8 low; 1.2036 Sept. 11 high
  • Support: 1.1922 Sept. 4 high; 1.1876 2nd upper band
  • EUR/JPY — Upward momentum may be resuming above 50-DMA
  • Resistance: 131.35 Sept. 1 high; 131.71 Aug. 30 high
  • Support: 130.66 Sept. 8 high/Sept. 1 low; 130.40 Sept. 6 high
  • AUD/USD — Held upper band, new range 0.7965/0.8146
  • Resistance: 0.8049 Sept. 7 high; 0.8073 Sept. 11 high
  • Support: 0.7994 Sept. 1 high; 0.7965 2nd upper band
  • NZD/USD — Consolidating, holding below 0.7316 50-DMA
  • Resistance: 0.7335/37 multiple tops; 0.7371 Aug. 10 high
  • Support: 0.7207/10 Sept.1/Aug. 31 highs; 0.7192/98/96 Aug. 24/23 lows/100-DMA
  • USD/KRW 1M Fwd — Consolidating around 50/100-DMAs
  • Resistance: 1136.90 Sept. 7 high; 1138.15 Sept. 6 high
  • Support: 1126.29 Sept. 11 low; 1119.65 Sept. 4 low
  • USD/THB — Consolidating losses below 50-DMA
  • Resistance: 33.175 Sept. 6 high; 33.229 Aug. 31 high
  • Support: 33.035 Sept. 7 low; 32.969 May 1 2015 low
  • USD/SGD — Consolidating within downtrend
  • Resistance: 1.3483 Sept. 6 low; 1.3539 Sept. 6 high
  • Support: 1.3411 Sept. 11 low; 1.3346 Sept. 8 low
  • USD/TWD — Consolidating within downtrend
  • Resistance: 30.065 Sept. 7 high; 30.177 Sept. 4 high
  • Support: 29.897 Sept. 7 low; 28.860 July 4 2014 low
  • USD/MYR — Attempting to fill gap
  • Resistance: 4.2262 Sept. 7 high; 4.2695 Sept. 5 high
  • Support: 4.1825 Sept. 8 low; 4.1775 Nov. 9 low
  • USD/PHP — Lower, testing 50-DMA
  • Resistance: 51.194 Sept. 6 high; 51.222 Aug. 29 high
  • Support: 50.666 Sept. 8 low; 50.576 Aug. 10 low
  • USD/INR — Consolidating below multiple DMAs
  • Resistance: 64.0550 Sept. 7 high; 64.2600 Sept. 6 high
  • Support: 63.8375 Sept. 11 low; 63.7862 Sept. 8 low
  • USD/IDR — Spike higher within downtrend
  • Resistance: 13305 Sept. 7 low; 13335 Sept. 7 high
  • Support: 13098 Nov. 10 low; 13052 Nov. 9 low

To contact the reporter on this story: Katherine Greifeld in New York at kgreifeld@bloomberg.net To contact the editors responsible for this story: Boris Korby at bkorby1@bloomberg.net Greg Chang

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