ASIA MORNING: Lacking Conviction


*Trade uncertainty persists with USD slightly bid 
*USDCAD dips on Poloz hawkishness
*BTC approaching key resistance



Positive trade headlines fail to inspire

Headlines hit the wires overnight from China, sending mixed messages of sorts. On one hand, an invite was extended to the US to come to Beijing for further talks. While, on the other, targeted sanctions against US personnel were being mulled in retaliation to the US Hong Kong bill. As a result, markets were seen lacking conviction to go either way appearing somewhat exhausted from the back and forth nature of headlines. S&P 500 sustains a touch above 3,100. USDCNH pulls back into 7.03 having traded as high as 7.05. Yields across the board are firmer. The USD is marginally bid from 12 hours ago across G10 currencies. Brent Crude is approaching the 200d-MA on hopeful OPEC cuts. 
 

Fun finish to slow week

Notwithstanding the slow week markets have endured from Monday to Thursday, we expect implied volatility to reflect more significant data ahead. Especially in EUR crosses which catch European manufacturing and services flash PMIs later from 7.15pm - 8.30pm AEDT, as well as, an ECB Lagarde speech that could flow into short-term yields. PMIs will be closely monitored for any signs that Europe's manufacturing malaise has stabilised. 
 

BoC Gov. Poloz surprises 

USDCAD has moved contrary to our initial upside thesis but we flag that there still lies Core Retail Sales m/m early Saturday morning due at 12.30am AEDT, which has tended to disappoint in the prior four months. A few comments of note, Poloz said the "Canadian economy is in a good place overall" and that monetary conditions seem about right. Canadian 10y yields rallied ~6bps on the news and USDCAD is now back under 1.33, having gone as high as 1.332 in the session. We keep an eye out for how price closes this week in relation to the 200d-MA currently around 1.3274; a close above keeps our near-term USDCAD upside case intact. 
 

Bitcoin's back on our radar

With markets drowning in so much US-China trade news as of late, it'd be remiss of us not to notice Bitcoin's sizable 10% high-low fall today breaching $7,945 200d-MA (orange) to the downside. This puts $BTC price action in the vicinity of October lows at ~$7,282 and what appears to be a key support area. A close below Oct. lows could help $BTC push towards the intersection of multi-month trend support and May 17, 2019 lows, and therefore, back into the $6,550-$6,600 region. To the upside, we suspect resistance will come in the form of multi-month trend resistance and October highs. 
 
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