Talking Points:

US Dollar Gains on FOMC Minutes Pre-Positioning, Supportive TICs Data
Pound May Fall if BOE Minutes Reveal Hawks Abandoned Rate Hike Votes
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The US Dollar outperformed in overnight trade, rising as much as 0.3 percent on average against its leading counterparts. The move tracked an advance in the benchmark 10-year US bond yield, hinting that pre-positioning ahead of the publication of minutes from October’s FOMC meeting later it the day may have been the catalyst. The policy statement released after that sit-down was judged as relatively hawkish and traders may be preparing for the probability that more of the same in the transcript of the meeting will fuel Fed rate hike speculation.

The greenback may have found added support from data showing cross-border demand for long-term US assets hit a record high. The US Treasury Department reported that long-dated USD-denominated securities saw a net inflow of $164.3 billionof foreign capital in September, marking the largest monthly increase since records began in January 1977.

Minutes from November’s Bank of England monetary policy meeting are in focus in European trading hours. The voting pattern on the rate-setting MPC committee will be in focus. The decidedly dovish tone of last week’s Quarterly Inflation Report released last week hints one or both of the hawkish votes on the committee may have shifted gears back to neutral. Such an outcome would represent an increased hurdle to secure a sufficient tally for a rate hike, undermining policy support for the British Pound and pressuring prices downward.

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Asia Session

GMT

CCY

EVENT

ACT

EXP

23:30

AUD

Westpac Leading Index (MoM) (OCT)

0.03%

–

-0.05%

0:00

AUD

Skilled Vacancies (MoM) (OCT)

0.0%

–

0.3%

1:45

CNY

MNI November Business Indicator

55.2

–

51.7

3:24

JPY

BOJ Annual Rise in Monetary Base

¥80T