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Cable stayed at the back foot in Asia and extended pullback from Wednesday's rally top at 1.2920, to fresh low at 1.2840 in early European trading. The pair is driven by contradicting news about pre-election position of two major political parties.

Release of poll that showed increasing lead of Conservatives boosted pound on Wednesday, but YouGov survey that was released on Thursday showed Tories only 3% ahead of Labour Party.

As expected, sterling is seen in choppy mode, moved mainly by political news, in the days preceding June 8 vote. Pound may fall further if Conservatives lose majority in the parliament, as suggested by the latest poll. Such scenario would weaken the position of UK PM Theresa May at the beginning of long and tough Brexit negotiations with the EU.

Alternatively, sterling would receive significant support if May keeps comfortable majority in the parliament. Technical studies show mixed setup on daily chart. Overall bulls are underpinned by rising daily cloud, but near-term recovery action from double downside rejection at 1.2770 zone was capped by strong barriers at 1.2908/20 zone, provided by converged daily Tenkan-sen/Kijun-sen lines and 10/20SMA's.

In addition, descending thick weekly cloud (cloud base currently lies at 1.2950) continues to heavily weigh on market, after capping broader recovery rally from 1.2100.

Stronger direction signals could be expected on firm break through key near-term barriers at 1.2920/50 or supports at 1.2770 zone (lows of pullback from 1.3047 peak, reinforced by daily cloud top).

Res: 1.2889, 1.2908, 1.2920, 1.2950
Sup: 1.2840, 1.2826, 1.2800, 1.2768

The US dollar was mixed yesterday as the PCE data showed a 0.2% increase on the core or 1.5% on a year over year basis. This was below the Fed's 2.0% inflation target rate. However, personal income and spending both managed to post some modest gains, rising 0.4% on both as forecast.

The euro spiked higher back to $1.1200 before giving up the gains. The rally came on speculation that the ECB could remove the easing bias when it meets in June with the possibility of announcing further tapering as early as September. The euro, however, gave up the gains towards the close.

The monetary policy makers in the US, however, were slightly dovish with Lael Brainard saying that the soft inflation could lead her to reassess the path for monetary policy.

Looking ahead, the Eurozone's flash inflation estimates for May will be released today with expectations showing a modest decline following an increase in April. In Canada, the GDP numbers will be coming out for March with forecasts showing a 0.3% increase on a month over month basis.

EURUSD intraday analysis

EURUSD (1.1245): On the daily chart, EURUSD is currently looking to breakout from the bullish flag pattern. Price is currently testing the higher closer at 1.1236 from May 22, and a successful bullish close above this level could trigger further upside.

The minimum upside is expected to see EURUSD push to 1.1338 and 1.1467, marking the 127.2% and 161.8% targets of the bullish flag pattern. However, on the 4-hour chart, the mini-pitchfork shows that price could be at risk of a pullback. Support is seen at 1.1200. The bullish flag pattern remains intact up to 1.1160. Only a break down below this level will trigger further downside in price.

GBPUSD intraday analysis

GBPUSD (1.2868): The British pound is likely to post a head and shoulders pattern on the daily chart, but this pattern is still evolving. Support has been firmly established at 1.2800, while the current bounce could see price likely to reverse around 1.12950 region.

A reversal here is to be expected followed by a test back to 1.2800. A break down below 1.2800 could trigger the head and shoulders pattern which puts the minimum downside target to 1.2600. On the 4-hour chart, the upside bounce could see price test the minor support that was broken at 1.2937 where resistance could develop. Failure to reverse near 1.2950 - 1.2937 will see 1.3000 being tested once again and will invalidate the head and shoulders pattern.

USDJPY intraday analysis

USDJPY (110.95): The U.S. dollar fell back to 110.79 support against the yen. Price action is seen currently attempting to push higher. The symmetrical triangle on the 4-hour chart suggests that the upside could continue.

Watch for the breakout from the minor falling trend line to suggest the upside move. A successful breakout will keep USDJPY supported to the upside with the target of 112.50 likely coming into focus. However, there are also some risks to the downside. Failure to hold the consolidation at 110.79 support will mean a possible break down lower. This will put USDJPY on thepath to test the lower support at 110.00.

EUR/JPY - 124.77

Recent wave: wave v of (C) ended at 94.12 and major correction in wave A has ended at 149.79

Trend: Near term up

Original strategy:

Bought at 124.10, stopped at 123.50

Position: - Long at 124.10
Target: -
Stop: - 123.50

New strategy :

Buy at 123.85, Target: 125.75, Stop: 123.25

Position: -
Target:  -
Stop:-

Although the single currency dropped earlier this week to as low as 123.16, as euro found good support there and has staged another rebound, suggesting further consolidation would be seen with mild upside bias for subsequent gain towards resistance at 125.82, however, break there is needed to confirm recent upmove has resumed and extend headway to 126.20-30 and possibly 126.60-70 but reckon 127.00-10 would hold from here.

In view of this, we are looking to buy euro on pullback as 123.70-75 should limit downside and bring another rise later. Below said support at 123.16 would abort and shift risk back to downside for test of previous support at 122.56 which is likely to hold from here due to broad consolidative outlook.

Our latest preferred count is that wave (ii) is ABC-X-ABC which ended at 123.33 and wave (iii) is unfolding with wave iii ended at 100.77, followed by wave iv at 111.57 and wave v as well as the wave (iii) has ended at 97.04, followed by wave (iv) at 111.43 and wave (v) has ended at 94.12 which is also the end of the larger degree v, this also implied the major wave (C) has also ended there, hence major correction has commenced from there with (A) leg unfolding in its lower degree wave c which has possibly ended at 145.69. Under this count, A-B-C wave (B) has commenced with A leg ended at 136.23, wave B at 143.79 and wave C has possibly ended at 149.79.

Our larger degree count is that the decline from 139.26 is wave (C) and is sub-divided into a diagonal triangle i-ii-iii-iv-v with wave i - 105.44, wave ii- 123.33, wave iii - 97.03, wave iv - 111.43, followed by the final wave v as well as the end of wave (C) at 94.12, this also mark the bottom of larger degree wave B. Under this count, major rise in wave C has commenced as an impulsive wave with minor wave III ended at 145.69, wave V is still in progress for further gain to 150.00. Having said that, this so-called wave V could well be the first leg of larger degree 5-waver wave C and this wave C should bring at least a retest of wave A top at 169.97 (July 2008).

Daily Pivots: (S1) 0.7411; (P) 0.7443; (R1) 0.7462; More...

The break of 0.7405 minor support confirmed that corrective rise from 0.7328 has completed at 0.7516. Intraday bias is turned back to the downside for 0.7328 first. Break will extend the decline from 0.7748 to 0.7144/7158 support zone. However, break of 0.7516 resistance will now indicate near term reversal and turn bias back to the upside.

In the bigger picture, we're still treating price actions from 0.6826 low as a corrective pattern. And, as long as 38.2% retracement of 0.9504 to 0.6826 at 0.7849 holds, long term down trend from 1.1079 is expected to resume sooner or later. Break of 0.6826 low will target 0.6008 key support level. However, firm break of 0.7849 will indicate that rise from 0.6826 is developing into a medium term rebound, rather than a sideway pattern. In such case, stronger rise should be seen to 55 month EMA (now at 0.8115) and above.

Daily Pivots: (S1) 1.3448; (P) 1.3485; (R1) 1.3537; More....

Intraday bias in USD/CAD remains neutral as consolidation from 1.3387 temporary low continues. Upside of recovery should be limited by 1.3570 resistance and bring fall resumption. At this point, we're still favoring the case that rise from 1.2968 has completed. And the larger rise from 1.2460 could have finished too. Below 1.3387 will target 1.3222 support first. Break of 1.3222 will affirm our bearish view and target 1.2968 key support level for confirmation. However, break of 1.3570 will turn focus back to 1.3793 high instead.

In the bigger picture, price actions from 1.4689 medium term top are seen as a correction pattern. The first leg has completed at 1.2460. Rise from 1.2460 is seen as the second leg and could have completed at 1.3793, ahead of 61.8% retracement of 1.4689 to 1.2460 at 1.3838. Break of 1.3222 should indicate the start of the third leg while further break of 1.2968 should confirm. Nonetheless, sustained trading above 1.3838 would pave the way to retest 1.4689 high.

Sunrise Market Commentary

• Rates: US 10-yr yield heading for test of 2.16% support?
  Today's market calendar heats up in the US. Risks for ADP are tilted on the downside of expectations while the price component of the manufacturing ISM could disappoint as well. This combination could push the US 10-yr yield for a test of 2.16% support (currently 2.21%) and push the US Note future temporary to a new contract high.
• Currencies: Euro holds strong even as EMU inflation declines
  Yesterday, the euro outperformed the other majors even as EMU inflation dropped more than expected. The dollar remained in the defensive. Today, the focus is on the US ADP report and the manufacturing ISM, ahead of tomorrow's key payrolls. A test of EUR/USD 1.1268 resistance is likely. Sterling still feels political headwinds.

The Sunrise Headlines

• US equities managed to undo initial weakness and closed the day marginally lower. Overnight, Japanese stocks outperform on strong data (capex, PMI, company profits) while China loses ground on a sub-50 PMI reading.
• President Trump said he would make an announcement today on the Paris climate treaty, with White House officials saying he is expected to withdraw from the accord, although they cautioned that the situation may yet change
• SF Fed Williams said that 3 rate increases is a reasonable view for this year, but there is upside potential for the economy which would warrant 4 hikes. He isn't worried about recent inflation data which reflect “temporary factors”.
• The private Chinese Caixin manufacturing PMI fell to 49.6 from 50.3 in April (vs 50.1 consensus), the lowest level since June 2016 and back below the boom/bust mark (50).
• The US economy expanded at a modest to moderate pace from early April through late May but showed little sign of breaking out of a recent trend of sluggish inflation, the latest Beige Book showed.
• Brazil's central bank slashed the key interest rate from 11.25% to 10.25%, continuing its pace of cuts amid a political crisis that has sown uncertainty just as the economy was seen as crawling back from its worst recession ever.
• Today's eco calendar is interesting with ADP employment, weekly claims and manufacturing PMI/ISM's in EMU (final), the UK and the US. Spain and France tap the market. Several ECB governors speak at Brussels economic forum and Fed Powell talks on the normalization of monetary policy

Currencies: Euro Holds Strong Even As EMU Inflation Declines

Euro rebounds. Dollar continues to struggle.

The euro outperformed other major currencies yesterday. EMU inflation declined more than expected, but German and EMU unemployment beat market consensus. The combination of good growth, low inflation and the expectation of only gradual ECB normalisation supported European assets and the euro. At the same time, the dollar remained in the defensive. EUR/USD came within reach of the 1.1268 correction top, but a real test didn't occur. The pair closed the day at 1.1244. USD/JPY remained in the defensive even as US equities reversed most of the intraday dip. The pair finished the day at 110.78.

Overnight, country specific issues dominated trading in several Asian markets. Positive capital spending data and corporate profits supported Japanese equities. The yen stays strong despite positive risk sentiment. USD/JPY hovers in the 111 area. A rebound in the oil price is also slightly positive for regional sentiment. The Chinese picture is a bit ambiguous. The Caixin manufacturing PMI dropped below 50 (49.6) and weighs on Chinese equities. At the same time, the yuan jumps sharply higher. Chinese authorities apparently want to discourage CNY/CNH shorts and fixed CNY/USD sharply stronger. The poor Chinese PMI and disappointing domestic capital spending also weigh on the Aussie dollar. AUD/USD dropped to the 0.74 area. EUR/USD maintains yesterday's gains.

The EMU manufacturing PMI is expected to confirm the strong preliminary ready (57) today. However the focus for trading will be on the US data. ADP private job creation is expected more or less stable at 180K. Recent labour subindices in other surveys showed a loss of momentum. Is there a risk for a downward ADP surprise? The US ISM manufacturing is expected little changed at 54.7. We don't have much reason to take different view from the consensus. We also keep an eye at the prices sub-index. Here is maybe a risk for some easing. To conclude: US data might confirm a scenario of decent growth, but a negative surprise is possible. Over the previous days, the decline of the dollar slowed and the euro rally took a breather. Yesterday's price action suggested that both underlying trends aren't over yet. Of late, the USD's reaction to the ISM and ADP was often modest. The payrolls are more important. Even so, we don't expect the US data to provide much USD support. CB speakers and the decision of Trump on the Paris Climate agreement (risk-off in case of a rejection?) are wildcards. A real test of the EUR/USD top at 1.1268 is likely. USD/JPY hardly profits from constructive risk sentiment

In a broader perspective, the dollar traded soft recently. US data were a bit disappointing, markets turned more cautious on Trump's pro-growth agenda and US yields declined. At the same time, the euro profited of reduced political risk on the region. Last week, there were tentative signs that the dollar decline could slow. However, the jury is still out whether enough USD softness is discounted? This week's payrolls and, to a lesser extent today's ISM, might be important in this assessment.

Technical picture

The USD/JPY rally ran into resistance early May. A mini-sell-off pushed the pair below the previous top (112.20), making the short-term picture negative. Return action lower in the 108.13/114.37 range is possible.

Earlier this month, it looked that EUR/USD could revisit 1.0821/1.0778 support (gap), but poor US data and political upheaval propelled EUR/USD north of the 1.1023 range top. The pair reached a short-term correction top at 1.1268. The correction top at 1.1300/1.1366 is next resistance. USD sentiment will have to be extremely negative to clear this hurdle short-term. So, a clean break of this won't be that easy. A return below 1.1023 would indicate that the upside momentum has eased.

EUR/USD: holding near recent top. US eco data to decide whether there is room for further gains

EUR/GBP

Sterling decline slows, but political uncertainty still weighs

Yesterday morning, investors sold sterling after a YouGov poll indicated that the Conservative party might fail to secure a majority in the June 08 election. Other polls still indicate quite a substantial lead for PM May. Cable dropped temporary below 1.28. EUR/GBP rebounded north of 0.87. The pressure on sterling eased later in the session, maybe as other polls still give quite a significant lead for the conservative party. Especially cable rebounded and closed the session at 1.2890, reversing the overnight loss. EUR/GBP closed the session at 0.8723, still within reach of the recent top.

Today, the UK manufacturing PMI is expected to decline slightly from 57.3 to 56.5. However, the focus for sterling trading remains on the potential outcome of the UK election. Political uncertainty will probably prevent a sustained sterling rebound before the June 08 election. However, in a day-to day perspective, sterling could enter some calmer waters as quite some negative news should already be discounted after the recent sell-off. Next resistance comes in 0.8788.

EUR/GBP nears recent highs as election uncertainty grows

Download entire Sunrise Market Commentary

Market movers today

Today we have PMI releases for May in the UK, Norway, Sweden, Spain and Italy, and US ISM manufacturing.

In the US, we will also get the ADP job report where the market consensus is for 180 ,000 new jobs being created in May, up from 177,000 in April. The US ISM index is expected to decline slightly to 54.6 in May from 54.8 in April, according to market consensus.

For the UK PMI release, as the PMI manufacturing index for the euro area increased slightly in May, there may be upside risk to our expectat ion of a slight fall in the UK index.

This morning we published our bi-annual global outlook called Big Picture. We lower our forecast for global growth due to downward revisions in the US and China. We no longer look for a fiscal boost in the US in 2018 and policy tightening in China has exceeded our expectations. Our forecast for the euro area is broadly unchanged. For more details see The Big Picture: Less tailwind for the global economy.

Selected market news

The European fixed income market eagerly awaited the first eurozone May inflat ion data yesterday. It showed a slightly bigger than expected drop in inflation to 1.4% from the previous 1.9%. Importantly, core inflation dropped from 1.2% to 0.9%. The low adds to the pressure on the ECB to keep its rhetoric dovish at its meeting next week. However, the impact of the slightly lower than expected inflation numbers was muted in the fixed income market . It might underline that the market , especially after the dovish words from him earlier in the week, is already positioned for a dovish Draghi.

However, the market could be in for a surprise. German hawks Weidman and Lautenschäger yesterday used the opportunity - just hours before the " silent period" of the ECB before the 8 June meeting kicks in - to give their views. Weidman said: " In my view, the current economic out look together with the improvement in the balance of risks suggests that the Governing Council is beginning to discuss whether and when it will be time to adjust our forward guidance". Laut enschäger added: " All ingredients for an appropriate increase in prices are present . Against that backdrop, we should prepare to slowly reduce the dose of monetary medicine."

OIL remained under pressure yesterday though it has recovered slightly this morning. The market continues to doubt that the OPEC cuts will be enough to stabilise the market given the surge in US oil production. The lower oil price spills over to the inflation market and coupled with the loss of confidence in Trump's fiscal boost , US market -based inflation expectations like 5y5y are now back at levels not seen since before he was elected.

In the UK, all eyes are now on the polls ahead of the 8 June election after a poll from YouGov on Tuesday said that Theresa May and her Conservative Party could lose their absolute majority in the House of Commons. Other polls have not confirmed this change.

Daily Pivots: (S1) 1.1187; (P) 1.1219 (R1) 1.1275; More....

Intraday bias in EUR/USD remains neutral for the moment. On the upside, break of 1.1267 will resume recent rise. Decisive break of 1.1245/98 (138.2% projection of 1.0339 to 1.0828 from 1.0569 at 1.1245) resistance zone will carry larger bullish implication and target 1.1615 resistance next. In case consolidation from 1.1267 extends with another fall, further rise will remain in favor as long as 1.1020 support holds. But, break of 1.1020 will indicate rejection from 1.1245/98 and turn bias to the downside for 1.0838 support.

In the bigger picture, the case for medium term reversal continues to build up with EUR/USD staying far above 55 week EMA (now at 1.0888). Also, bullish convergence condition is seen in weekly MACD. Focus will now be on 1.1298 key resistance. Rejection from there will maintain medium term bearishness and would extend the whole down trend from 1.6039 (2008 high). However, firm break of 1.1298 will indicate reversal. In such case, further rally would be seen back to 1.2042 support turned resistance next.

Daily Pivots: (S1) 1.2799; (P) 1.2859; (R1) 1.2951; More...

Intraday bias in GBP/USD remains neutral first. With 1.2926 minor resistance intact, deeper fall is still in favor. We're holding on to view that rise from 1.2108 is completed. Below 1.2768 will target 1.2614 resistance turned support next. Break there should also indicate completion of whole consolidation pattern from 1.1946 and target a retest on this low. Meanwhile, above 1.2926 minor resistance will turn focus back to 1.3047 high instead.

In the bigger picture, fall from 1.7190 is seen as part of the down trend from 2.1161. The rejection from 55 week EMA is maintaining bearishness in the pair. Also, at this point, as long as 1.3444 resistance holds, fall from 1.7190 is still expected to continue. Break of above mentioned 1.2614 support will affirm this bearish case.

Asia Mid-Session Market Update: Shanghai Composite, AUD fall as China Caixin Manufacturing PMI falls into Contraction

US Session Highlights

(US) President Trump said to have decided to withdraw the US from Paris Climate accord - financial press

(US) Fed's Kaplan (moderate, voter): Inflation is slow and uneven but trend not deteriorating

(LY) Libya National Oil Corp Chairman: oil production rises to 827Kbpd after technical problem fixed - financial press

(US) APR PENDING HOME SALES M/M: -1.3% V 0.5%E; Y/Y: -5.4% V 0.5% PRIOR

(US) Conference Board May Total online job ads 4.81M v 4.61M m/m v 5.31M y/y; New ads 2.35M v 2.0M m/m v 2.02M y/y

(US) May Chicago Purchasing Manager corrected to 59.4 from erroneously reported 55.2 (v 57.0e)

Stocks closed the month on a subdued note, with major indices printing small numbers in the red. The month brought a new all-time monthly high for the S&P, which gained close to 1%. Best performing sectors in the S&P for May were Technology and Utilities, up 4.1% and 3.6% respectively. The worst performing sector was Energy, down 3.1%. Continued evidence the reflation trade is on hold for now as 10-year Treasury note yields continued to fall today, closing down 1bps, its lowest close since April 18th.

US markets on close: Dow -0.1%, S&P500 -0.1%, Nasdaq -0.1%

Best Sector in S&P500: Utilities

Worst Sector in S&P500: Financials

Biggest gainers: PRGO +7.3%; VRTX +2.7%; REGN +2.3%

Biggest losers: KORS -8.5%; SWN -4.6%; CF -3.6%

At the close: VIX 10.4 (flat); Treasuries: 2-yr 1.29% (-1bp), 10-yr 2.20% (-2bps), 30-yr 2.86% (-3bps)

US movers afterhours

PANW Reports Q3 $0.61 v $0.55e, R$431.8M v $413Me; Guides Q4 $0.78-0.80 v $0.74e, R$481-491M v $485Me; +12.5% afterhours

BOX Reports Q1 -$0.13 v -$0.14e, R$117.2M v $115Me; Guides Q2 -$0.13 to -$0.12 v -$0.12e, R$121-122M v $121Me; +2.9% afterhours

HPE Reports Q2 $0.35 v $0.35e, R$9.9B v $9.87Be; Guides Q3 $0.24-0.28 v $0.31e; Affirms FY17 $1.46-1.56 v $1.48e ; -1.1% afterhours

SMTC Reports Q1 $0.44 v $0.41e, R$149.1M v $146Me; Guides Q2 $0.43-0.49 v $0.45e, R$150-160M v $154Me, gross margin 60.5-61.5%; -3.8% afterhours

Politics

(UK) Times/YouGov general election weekly poll: Conservatives 42% (-1pts), Labour 39% (+3pts)

(US) Pres Trump: I will be announcing my decision on Paris Accord, Thursday at 3:00 P.M

(US) House of Reps said to investigate another meeting between AG Sessions and Russian ambassador Kislyak - US press

(US) Commerce Sec Ross: wants to have full discussions with Congress over NAFTA renegotiations by July before heading into talks in Aug - press

Key economic data

(CN) CHINA MAY CAIXIN PMI MANUFACTURING: 49.6 V 50.1E (1st contraction in 11 months)

(JP) JAPAN MAY FINAL PMI MANUFACTURING: 53.1 V 52.0 PRELIM (3-month high)

(JP) JAPAN Q1 CAPITAL SPENDING Y/Y: 4.5% (2nd straight quarter of growth) V %4.0E; EX-SOFTWARE Y/Y: 5.2% V 4.1%E

(AU) AUSTRALIA MAY AIG MANUFACTURING INDEX: 54.8 V 59.2 PRIOR (8TH CONSECUTIVE MONTH OF EXPANSION; 4-month low)

(AU) AUSTRALIA MAY CORELOGIC HOUSE PRICES M/M: -1.1% V 0.1% PRIOR

(AU) AUSTRALIA APR RETAIL SALES M/M: +1.0% V +0.3%E (31-month high)

(AU) AUSTRALIA Q1 PRIVATE CAPITAL EXPENDITURE (CAPEX) Q/Q: 0.3% V 0.5%E

(KR) SOUTH KOREA MAY PMI MANUFACTURING: 49.2 V 49.4 PRIOR (10th consecutive contraction)

(KR) SOUTH KOREA MAY TRADE BALANCE: $6.0B V $6.8BE

(KR) SOUTH KOREA MAY CPI M/M: 0.1% V +0.2%E; Y/Y: 2.0% V 2.0%E; CPI CORE Y/Y: 1.4% V 1.4%E

Asia Session Notable Observations, Speakers and Press

Asian indices are mixed again, tracking a lackluster US session where investors are biding their time before Friday's non-farm payrolls. Oil was in focus with a steep decline in US hours on reports of expanded Libya production, though some of the selloff was reversed on a large API inventory draw. US 2-10 Treasury yield curve continues to narrow, while PIMCO estimates a 70% chance of a US recession over the next 5 years. Fed's Williams speaking in Asia also voiced possibility of a total of 4 rate hikes this year if US economic growth strengthens, though he still sees 3 as the baseline scenario.

China is leading regional indices to the downside after a much weaker than expected Caixin Manuf PMI sank into contraction for the first time in 11 months. Some of the key components saw first fall in input costs since last June, growth in new orders the slowest seen since the current upturn began in July 2016, and employment decline at the quickest pace seen since last September. Input costs also fell for the first time in nearly a year in evidence of disinflationary pressure. The Caixin PMI is focused more on smaller firms as opposed to the official PMI which earlier this week showed some support from last month's 6-month lows.

Nikkei225 is faring better with a modest lift despite the lower US yields and stable USD/JPY rate ranging around ¥111, as Japan's Corporate Spending rose for the 2nd straight quarter and corporate profits grew double-digits despite stronger JPY in Q1. In other FX majors, AUD/USD initially rallied on the release of better than expected Retail Sales and an upgrade in Australia CAPEX projections for the current and next FY's, but then reversed all of those gains to fall 60pips from the highs below 0.7390 on soft China PMI. GBP came under pressure again with another UK election poll portending a hung Parliament in next week's vote.

Volatility around China currency continued as PBoC fix was the strongest since Nov 10th. Traders attribute the preference for stronger Yuan as a preemptive move ahead of the anticipated Fed hike that is expected to strengthen the greenback, as Chinese central bank worries about accelerated outflows amid the increasingly apparent economic slowdown.

China

(CN) ANZ: Sees China Q2 GDP at 6.6%; Latest expansion in Services sector may not be sustained amid regulatory tightening in financial sector - Chinese press

Japan

(JP) BoJ Harada: BoJ's measures have produced excellent results; no chance BOJ will incur losses in long term perspective

(JP) Japan to add Debt-to-GDP ratio as a fiscal target – Japanese Press

Korea

(KR) BOK Gov Lee: Not sure if global recovery can by sustained

Asian Equity Indices/Futures (00:00ET)

Nikkei +1.1%, Hang Seng +0.4%, Shanghai Composite -0.5%, ASX200 +0.1%, Kospi -0.1%

Equity Futures: S&P500 flat; Nasdaq +0.2%, Dax -0.1%, FTSE100 +0.1%

FX ranges/Commodities/Fixed Income (00:00ET)

EUR 1.1230-1.1255; JPY 110.70-111.10; AUD 0.7385-0.7455; NZD 0.7060-0.7090

June Gold -0.3% at 1,268/oz; July Crude Oil +0.9% at $48.75/brl; July Copper -0.5% at $2.57/lb

(US) Weekly API Oil Inventories: Crude: -8.7M v -1.5M prior (biggest draw since Sept 2016)

(CN) PBOC SETS YUAN MID POINT AT 6.8090 V 6.8633 PRIOR; Biggest margin of increase since Jan 6th; Strongest Yuan fix since Nov 10th

(CN) PBOC to inject combined CNY100B v CNY210B prior

(JP) Japan MoF sells ¥2.08T v ¥2.3T offered in 10-year 0.1% JGBs; Avg yield: 0.051% v 0.030% prior; bid to cover: 3.64x v 3.76x prior

Asia equities notable movers

Australia

ANZ -0.5%; New mortgage capital model approved by APRA; adoption to impact Level 2 CET1 ratio negatively by 26bps

Boral (BLD) -1.0%; Cut at JPMorgan

WesFarmers (WES) -3.9%; Cut at Morgan Stanley

Japan

Canon (7751) +3.2%; stock buyback

JGC (1963) +2.3%; awarded LNG contract

Sumitomo Mitsui (8316) +1.0%; CEO: Guides FY20

Toshiba (6502) -1.6%; transferring its stake in its chip joint venture back into the core company - Nikkei

Hong Kong

Top SPring (3688) +1.5%; Reports Q1

Lee's Pharma (950) -1.0%; Reports Q1