Key overnight events:

  • The Bank of Japan surprised markets last Friday, cutting its policy rate by 20bps to -0.1% in an effort to combat downside risks to growth and inflation. This led to broad equity gains across the globe on Friday; the S&P 500 surged 2.5%, the most in 4 months.
  • GDP in the US released last Friday rose by 0.7% quarter-on-quarter, lower than the 0.8% forecasted. All eyes will be on the ISM manufacturing figure tonight which is expected to come in at 48.5, its fourth month of contraction.
  • Crude oil futures expiring in March looks set to halt its longest run of gains this year after failing to hold above $34/bbl over the past 2 sessions. Futures traded in New York lost as much as 2% this morning, hitting a low of $32.90/bbl, after Bloomberg reported that output from OPEC climbed to 33.11 million barrels a day in January, with Iran contributing to a further 60,000 barrels a day.
  • Manufacturing in China continued to contract as the nation’s official manufacturing PMI came in this morning at 49.4, worse than the 49.6 figure expected. The Caixin manufacturing PMI also reported a contraction as it came in at 48.4; it was however better than the 48.1 expected.

 

USDSGD:

  • Spot 1.4247
  • USDSGD bounced off a low of 1.4204 last Friday and looks poised to maintain within a range of 1.4200 – 1.4330 for the near term.
  • Singapore’s PMI numbers due for release tomorrow is expected to come in at 49.7.

 

AUDUSD:

  • Spot 0.7063
  • AUDUSD pared gains from last Friday’s high of 0.7141, following the release of weak manufacturing data out of China this morning.
  • RBA’s policy meeting is scheduled to conclude tomorrow; the main consensus is that they will hold rates steady at 2%.

 

USDCAD:

  • Spot 1.4007
  • Canada’s GDP for November was released last Friday, with the month-on-month figure coming in at 0.3% and the year-on-year figure coming in at 0.2%. Both figures were in line with expectations.
  • USDCAD continues to consolidate around the 1.4000 resistance level.

 

USDCNH

  • Spot 6.6056
  • Interactive Brokers & FXCM have tightened rules for CNH trading over the Chinese New Year period, with the former raising margin requirements to hold CNH to 10% and citing concerns about “policy driven” rate events during the upcoming holiday period.
  • USDCNH reached 6.5918 last Friday, its lowest level since 21st Jan, following the Bank of Japan’s surprise negative rate announcement. Losses were pared this morning after the worse-than-expected release of China’s official manufacturing PMI, as USDCNH returned back above the 6.6000 level.

 

USDNOK:

  • Spot 8.6675
  • USDNOK bounced strongly off the low of 8.5999 on Friday, indicating strong near-term resistance at the 8.6000 level.
  • Manufacturing PMI for January is due later today and is expected to come in at a contractionary figure of 46.0, down from 48.6 in December.

 

© Jachin Capital Pte Ltd

UEN: 201419754M


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