Ahead Today
G3: Germany CPI
Asia: Philippines trade, Thailand trade, Taiwan Q3 GDP, India Q3 GDP and industrial production
Market Highlights
It was a quiet trading session yesterday due to US Thanksgiving holiday and a lack of major US economic data. The broad US dollar index (DXY) remains under modest downside pressure following softer ADP employment data and reports that President Trump’s economic advisor, Kevin Hassett, has emerged as the frontrunner for the Fed Chair role. These developments have reinforced market expectations of a dovish tilt at the Fed. US rates markets have priced in a modest bull steepening in the near term, reflecting expectations for rate cuts paired with a slightly firmer long-end.
In Japan, BOJ board member Noguchi, regarded as dovish, noted that the central bank is getting closer to its 2% inflation target and warned of higher prices if yen weakness gathers pace. However, he has stopped short of indicating when a rate adjustment might occur. Markets will be watching closely BOJ Governor Ueda’s speech next Monday for any clues on the timing of rate hikes. For now, market pricing reflects a 56% probability of a December hike, up sharply from around 16% a week ago.
Looking ahead, next week’s US data releases include the November ISM manufacturing survey and several delayed September indicators. While the ISM survey could provide insights into manufacturing employment and new orders, the delayed September data may not materially affect the broader dollar outlook.
Regional FX
Asian FX markets were largely subdued yesterday, with the exception of a 0.4% gain in KRW. The Bank of Korea held its policy rate at 2.50%, signalling a possible shift from a pause in rate cuts to what appears to be the end of its easing cycle amid rising financial stability concerns. The BOK also raised its 2026 growth forecast to 1.8%, from its August projection of 1.6% and revised next year’s inflation outlook to 2.1% (from 1.9%), noting that its current policy stance is broadly neutral.
Meanwhile, China has reportedly voiced concerns over certain aspects of the Malaysia-US trade agreement, though details remain unclear. Beijing emphasized that any trade deal should not impede global trade development, regional cooperation, or harm China’s interests. Malaysia has responded by addressing the issues raised.