Article / 16 November 2017 at 1:41 GMT

Morning Report APAC: Asia opens mixed on US data

APAC Sales Trading Desk / Saxo Capital Markets


  • US inflation data did little to alter the likelihood of Fed lifting rates
  • The Topix index swung between gains and losses in early trading
  • Hong Kong’s Hang Seng Index futures climbed 0.4%
  • USDJPY was at 112.93 early today, close to the strongest in about a month

By Saxo APAC Sales Trading

Economic data of the day (Singapore Time)


Speeches (Singapore Time - GMT +8)

1645: EC – ECB’s Mersch speaks in Brussels
2000: UK – BOE’s Carney,  Braodbent, Cunliffe, Place, Ramsden, Woods speak
2210: US – Fed’s Mester delivers keynote address at Cato Conference
2230: EC – ECB’s Vileroy De Galhau speaks in Amsterdam
0210: US – Fed’s Kaplan speaks to CFA Society in Houston
0400: EC – ECB’s Constancio speaks in Ottawa

Overnight news

US: CPI came in at 0.1% MoM and 2.0% YoY but most importantly, Core CPI rose 0.2% following a 0.1% increase in September, as expected and 1.8% YoY (Exp. 1.7%).

The probability of rate hike in December has now moved up to 97%. Retail Sales dropped from 1.6% to 0.2% (Exp. 0.0%) MoM and 0.1% ex Autos (Exp. 0.2%).

The jobless rate averaged 4.3 percent between July and September but employment fell by 14,000, the first decline since October last year and the biggest drop since June 2015.

Basic wage growth stayed at just above 2 percent, well below the rate of inflation, and the number people neither in work nor looking for a job rose by the most in more than seven years.

Foreign exchange



It was a very volatile day for the USD which started to sell off aggressively as soon as London came in on a continuation of the previous day and it moved broadly to all the currencies.

A stronger core CPI in the US reversed the course of the night and USD managed to find some good bids during NY time.

DXY is managing to hold at the 100d MA at 93.683 but below the 94.00 H&S line. We should see some bids back today in DXY following the good CPI numbers last night in the US.

The  EURUSD stop fest continued overnight pushing the pair to 1.1860 before reversing and finding good selling interest after the CPI numbers. In any case, there will be a good resistance level ahead of 1.2000.

Emerging Markets: USDKRW was the story of the night breaking the lows of the year on an unexpected day on stops from macro funds.

As soon as 1110 broke, the market gapped lower in New York to 1106. On another note on KRW, South Korea and Canada form a bilateral currency swap. 

Foreign exchange movements
There was volatility in the spot market, moving higher first on the USD selling, especially against EUR but reversing at the end of the day.

USDJPY risk reversal are very bid with 112.50 and 112.00 strikes in demand.


US Treasuries advance for another day as risk off feel lingers, however the curve was flattened with CPI data overbeat prompting almost certainty of December rate hike.

Bunds climbed on risk off buying, peripherals underperformed while gilts yield dropped for a third day after it was reported that the number of people in work falling for the first time in almost a year, adding on to support from Brexit uncertainties. 







US: Target Corp slumped 9.9% after the retailer reported adjusted quarterly profit of 91cps, 5cps above estimates, but the company offered a downbeat profit outlook for the current quarter and said it expected a “highly competitive” environment for holiday sales.

Boeing rose 0.4% after the aircraft maker announced a deal to sell Dubai-based Flydubai up to 225 more of its 737 Max 8 planes at a list price value of $27 billion, while rival Airbus SE (+2.4%) secured one of the largest aircraft deals in history with US private equity group Indigo Partners LLC agreeing to pay roughly $49.5 billion for a fleet of Jetliners.

Cisco shares jumped 4% in after-hours trading Wednesday after the company expects to snap a two-year streak of revenue declines. While revenue is still down 2% from the year before, investors were comforted by the promise of 1% to 3% year-over-year growth in the upcoming second quarter.

Europe: Lanxess  dropped 3.1% after the German specialty chemicals company said third-quarter net profit fell to 55 million euros on a 25% rise in sales to €2.40 billion vs consensus forecast of €2.42 billion.

Hong Kong: Tencent likely outperform today after the Chinese internet giant posted a 69% jump in its quarterly net profit, blowing past estimates on the back of its popular mobile games and social media apps. Earnings leapt to Rmb22.75bn ($3.43bn), while monthly active users on its WeChat and Weixin platforms hit 980m.

There are trading debuts for Bestway Global Holding (3358) and Yixin Group (2858) – Yixin Group, China’s largest online car retailer backed by Tencent, is likely to be in focus today as deemed as one of the tenth hottest HK IPO, with grey market indicating price as high as HK$11.5, a 49% above IPO offer price of HK$7.7 apiece.

 Making a difference: hot new IPOS in HK today might lift the market. Photo: Shutterstock

– Edited by Adam Courtenay

This report was compiled by the Saxo APAC Sales trading team in Singapore – the home of social trading. Follow the team on @SaxoStrats or post your comment below to engage with Saxo Bank's social trading platform. Follow us on @SaxoStrats on Twitter

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