News

Asia Roundup: Antipodeans gain on Premier Li's comments, greenback eases amid U.S.-China trade talks, investors eye EZ CPI – Friday, March 15th, 2019

Market Roundup

  • China, U.S. make further substantive progress on trade talks – Xinhua
     
  • Trump-Xi summit will not happen in March – Mnuchin
     
  • China can use reserve requirements, interest rates to support economy- premier
     
  • China's home price growth slips to 10-month low, raises policy challenge
     
  • British lawmakers overwhelmingly back Brexit delay
     
  • Global gloom forces Japan c.bank to temper its outlook
     
  • N.Korea reconsiders nuclear talks, missile ban – reports
     
  • U.S. muni bond funds post $1.6 bln in inflows-Lipper
     
  • U.S. investment-grade corporate bond funds enjoy 7th week of inflows -Lipper
     
  • Foreign CB US debt holdings +$6.219 bln to $3.472 tln Mar 13 week
     
  • Treasuries +$5.445 bln to $3.076 tln, agencies +$533 mln to $324.252 bln
     

Economic Data Ahead

  • (0600 ET/1000 GMT) EZ Feb HICP Final MM, 0.3% f'cast, -1.0% prev
     
  • (0600 ET/1000 GMT) EZ Feb HICP Final YY, 1.5% f'cast, 1.5% prev
     
  • (0600 ET/1000 GMT) Italy Feb CPI(EU Norm) Final MM, -0.2% f'cast, -0.2% prev
     
  • (0600 ET/1000 GMT) Italy Feb CPI(EU Norm) Final YY, 1.2% f'cast, 1.2% prev
     
  • (0600 ET/1000 GMT) Italy Feb Consumer Prices Final MM, 0.2% f'cast, 0.2% prev
     
  • (0600 ET/1000 GMT) Italy Feb Consumer Prices Final YY, 1.1% f'cast, 1.1% prev
     
  • (0700 ET/1100 GMT) EZ Feb Reserve Assets Total, 728.40 bln prev
     

Key Events Ahead

  • (0455 ET/0855 GMT) Remarks by BoJ Governor Haruhiko Kuroda at the B20 Tokyo Summit
     
  • (0500 ET/0900 GMT) Finnish central bank chief Olli Rehn briefs the press on monetary policy and the global economy in Helsinki
     
  • (1140 ET/1540 GMT) Michael Held, BoE executive vice president, is a panelist at the Ethics by Design Conference 2019 in New York
     

FX Beat

DXY: The dollar index eased after U.S. Treasury Secretary Steven Mnuchin stated that a summit to seal a trade deal between U.S. President Donald Trump and Chinese President Xi Jinping will not happen at the end of March as more work was needed in U.S.-China negotiations. The greenback against a basket of currencies traded 0.1 percent down at 96.66, having touched a low of 96.39 on Wednesday, its lowest since March 4. FxWirePro's Hourly Dollar Strength Index stood at -55.18 (Bearish) by 0400 GMT.

EUR/USD: The euro gained, reversing some of its previous session losses, as the greenback eased after U.S. data on Thursday underscored growing pressure on the U.S. economy. The European currency traded 0.1 percent up at 1.1318, having touched a high of 1.1338 on Wednesday, its highest since Mar. 5. FxWirePro's Hourly Euro Strength Index stood at 7.40 (Neutral) by 0400 GMT. Investors’ attention will remain on a series of economic data from the Eurozone economies ad EZ consumer price index, ahead of the U.S. industrial production, capacity utilization, and Michigan consumer sentiment index. Immediate resistance is located at 1.1367 (78.6% retracement of 1.1176 and 1.1496), a break above targets 1.1408 (March 1 High). On the downside, support is seen at 1.1278 (5-DMA), a break below could drag it till 1.1243 (Mar. 12 Low).

USD/JPY: The dollar rose to a 1-week peak, as sentiment improved after UK lawmakers voted to delay a potentially disordered exit from the European Union. However, it trimmed gains on news that multiple people have been shot dead in shootings at two mosques in the New Zealand city of Christchurch. The major was trading flat at 111.71, having hit a high of 111.90, its highest since March 6. FxWirePro's Hourly Yen Strength Index stood at -70.00 (Bearish) by 0400 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of U.S. industrial production, capacity utilization, and Michigan consumer sentiment index. Immediate resistance is located at 112.13 (Mar. 5 High), a break above targets 112.60 (Dec. 20 High). On the downside, support is seen at 111.11 (Mar. 12 Low), a break below could take it lower at 110.66 (Feb.28 Low).

GBP/USD: Sterling consolidated within narrow ranges after the British parliament backed a government motion to seek a delay to the date for the departure from the European Union. British lawmakers approved the motion by 412 votes to 202 setting out the option to ask the EU for a short delay if parliament can agree on a Brexit deal by March 20 or a longer delay if no deal can be agreed in time. The major traded flat at 1.3240, having hit a high of 1.3380 on Wednesday; it’s highest since June 14. FxWirePro's Hourly Sterling Strength Index stood at 72.32 (Bullish) 0400 GMT. Investors’ will remain on the sidelines, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3380 (Mar. 13 High), a break above could take it near 1.3446 (June 14 High). On the downside, support is seen at 1.3166 (Mar. 4 Low), a break below targets 1.3097 (Mar. 5 Low). Against the euro, the pound was trading 0.1 percent down at 85.47 pence, having hit a high of 84.71 on Wednesday, it’s highest since May 2017.

AUD/USD: The Australian dollar rebounded after China's Premier Li Keqiang said that China can use reserve requirements and interest rates to support economic growth. The Aussie trades 0.3 percent up at 0.7084, having hit a high of 0.7097 on Thursday, it’s highest since Mar. 4. FxWirePro's Hourly Aussie Strength Index stood at -26.28 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6993 (Jan.4 Low), a break below targets 0.6965. On the upside, resistance is located at 0.7109 (Mar. 4 High), a break above could take it near 0.7150 (Feb. 22 High).

NZD/USD: The New Zealand dollar gained as the greenback eased on reports that a possible summit meeting the United States and China to seal a trade deal will be delayed. The Kiwi trades 0.4 percent up at 0.6847, having touched a high of 0.6872 on Tuesday, its highest level Feb. 27. FxWirePro's Hourly Kiwi Strength Index was at -130.47 (Highly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6876 (Feb. 21 High), a break above could take it near 0.6901 (Feb. 27 High). On the downside, support is seen at 0.6808 (Mar. 14 Low), a break below could drag it below 0.6757 (Feb. 22 Low).

Equities Recap

Asian shares advanced as risk sentiment improved after UK lawmakers voted to delay a potentially chaotic exit from the European Union.

MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.5 percent.

Tokyo's Nikkei rose 0.8 percent to 21,450.85 points, Australia's S&P/ASX 200 index declined 0.1 percent to 6,175.20 points and South Korea's KOSPI rallied 0.9 percent to 2,175.20 points.

Shanghai composite index surged 0.9 percent to 3,020.75 points, while CSI300 index traded 1.3 percent up at 3,747.96 points.

Hong Kong’s Hang Seng traded 0.9 percent higher at 29,104.34 points. Taiwan shares added 0.9 percent to 10,439.24 points

Commodities Recap

Crude oil prices rose, as production cuts led by OPEC and U.S. sanctions against Venezuela and Iran likely created a slight deficit in global supply in the first quarter of 2019. International benchmark Brent crude was trading 0.1 percent up at $67.22 per barrel by 0438 GMT, having hit a high of $68.11 the day before, its highest since Nov. 16. U.S. West Texas Intermediate was trading 0.2 percent higher at $58.72 a barrel, after rising as high as $58.43 on Wednesday, its highest since the Nov. 13.

Gold prices steadied after falling below the key $1,300 level in the previous session, as risk appetite improved after British lawmakers voted to seek a delay to the country's exit from the European Union. Spot gold was 0.2 percent up at $1,297.93 per ounce by 0444 GMT, having touched a high of $1,311.18 on Wednesday, its highest since March 1. U.S. gold futures were flat at $1,295.20 an ounce.

Treasuries Recap

The Japanese government bonds were steady to slightly weaker, with the 10-year JGB futures down 0.04 point to 152.80. The 10-year JGB yield rose 0.5 basis point to minus 0.040 percent. The 20-year JGB yield rose 0.5 basis point to 0.395 percent, having hit a two-year low of 0.385 percent the previous day. The 30-year JGB yield rose 0.5 basis point to 0.570 percent, off Thursday's low of 0.560 percent, its lowest level since late 2016.

The Canadian government bond prices rose across much of the yield curve, with the 10-year up 7 Canadian cents to yield 1.758 percent.


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