Key overnight events:
- A largely uneventful night as US markets were closed for Martin Luther King Day. In Europe, most markets gave up early session gains to close in the red. Crude oil futures continued to trade near its lows around the $29/bbl handle.
- Early trading in Asia was lacklustre, with most market participants preferring to stay on the side lines prior to the release of a slew of economic data in China.
- China’s GDP rose 6.8% in the 3 months through December from a year earlier, below the median estimate of 6.9% in a Bloomberg survey. It is worth noting that the latest China GDP figure is the first missed forecast since 1Q 2013.
- Industrial production and retail sales figures for the same period both came in a touch weaker than expected as well. Industrial production rose 5.9% in December from a year earlier, compared with 6% growth forecasted, while retail sales increased 11.1% year-on-year, weaker than the 11.3% rise expected by economists.
- Spot 1.4389
- USDSGD continues to consolidate in a tight range near its highs. A move either way is possible once a breakout above 1.4450 or below 1.4300 materialises.
- However, the longer term uptrend for USDSGD still remains in play, and signals further weakening of the Singapore dollar against the greenback.
- In response the yesterday’s weaker-than-expected export numbers, DBS warned that 4Q GDP figures could be revised downwards and that MAS’ exchange rate policy is still on an easing bias.
- Spot 0.6850
- Made a new intraday low of 0.6839 following China’s weaker-than-expected economic data, and looks set to retest last Friday’s low of 0.6827.
- Multi-year downtrend still intact and a continuation of the trend could result in AUDUSD reaching the 0.6500 level in due time.
- Spot 1.4528
- USDCAD continues to be well-supported at the 1.4500 level.
- With the Bank of Canada’s rate decision due tomorrow night, any major moves for the loonie prior to its release is unlikely.
- The implied probability of a 25bp rate cut, as reported by Bloomberg, currently lies at 60%.
- Spot 6.5969
- USDCNH rebounded of intraday lows of around 6.5800 following the release of China’s missed economic figures. 6.6200 remains the near-term region of resistance, while 6.5800 continues to provide ample support.
- Spot 8.9058
- USDNOK hit an intraday high of 8.9207 last night, rising to as high as 1.87% from its low on Friday.
- In a report released by OECD yesterday, the organisation stated that Norway should reduce taxes, deregulate private enterprises and speed up public sector reforms to boost competitiveness as concerns over oil prices persist.