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Asia Roundup: Antipodeans at 1-week low amid concerns over China's economic outlook, yen off lows as U.S government shutdown lingers, Asian shares decline - Thursday, January 17th, 2019

Market Roundup

  • UK PM May seeks to end Brexit stalemate after winning confidence vote
     
  • As shutdown lingers, Pelosi pushes Trump to delay State of Union speech
     
  • U.S. lawmakers introduce bipartisan bills targeting China's Huawei and ZTE
     
  • BOJ's Kuroda calls for vigilance to cost of unconventional easing
     
  • China c.bank to inject net 380 bln yuan via OMOs, a day after record move
     
  • UK house sales outlook weakest on record as Brexit nears - RICS
     
  • Australia Nov Housing Finance, -0.9%, -1.5% f'cast, 2.2% prev
     

Economic Data Ahead

  • (0500 ET/1000 GMT) EZ Dec HICP Final MM, 0.0% f'cast, -0.2% prev
     
  • (0500 ET/1000 GMT) EZ Dec HICP Final YY, 1.6% f'cast, 1.6% prev
     

Key Events Ahead

  • (0600 ET/1100 GMT) Lecture by ECB Board Member Sabine Lautenschlager at Risk Management & Supervisory Conference organized by Banking & Payments Federation Ireland in Dublin.
     
  • (1000 ET/1500 GMT) Bank of England Governor Mark Carney, Deputy Governor Sam Woods, and other senior officials from the bank to speak about competition in the banking sector in London
     
  • (1045 ET/1545 GMT) Federal Reserve Vice Chair for Supervision Randal Quarles participates in "Insurance Regulation and Supervision" discussion before the Insurance Information Institute 2019 Joint Industry Forum, in New York City, United States.
     

FX Beat

DXY: The dollar index rose, extending gains for the third straight session, as the euro eased amid persistent worries about the euro zone economy. The greenback against a basket of currencies trades 0.5 percent up at 96.14, having touched a high of 96.26 on Tuesday, its highest since Jan. 4. FxWirePro's Hourly Dollar Strength Index stood at 108.28 (Highly Bullish) by 0500 GMT.

EUR/USD: The euro slumped to a 2-week low after European Central Bank chief Mario Draghi warned that economic developments in the eurozone have been weaker than expected. The European currency traded 0.1 percent down at 1.1380, having touched a low of 1.1377 earlier, its lowest since Jan. 4. FxWirePro's Hourly Euro Strength Index stood at -57.13 (Bearish) by 0500 GMT. Investors’ attention will remain on a series of data from the Eurozone economies and EZ consumer price index, ahead of the U.S. unemployment benefit claims and Fed Quarles speech. Immediate resistance is located at 1.1442 (December 10 High), a break above targets 1.1500 (November 7 High). On the downside, support is seen at 1.1356 (December 21 Low), a break below could drag it till 1.1325 (Jan. 2 Low).

USD/JPY: The dollar eased, retreating from a 2-week peak touched in the previous session, amid growing concerns the U.S. government shutdown was starting to take a toll on its economy. The major was trading 0.1 percent down at 108.98, having hit a high of 109.19 on Wednesday, its highest since Jan 2. FxWirePro's Hourly Yen Strength Index stood at 20.67 (Neutral) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims and Fed Quarles speech. Immediate resistance is located at 109.20, a break above targets 109.46 (April 26 High). On the downside, support is seen at 108.02 (Jan. 7 Low), a break below could take it lower 107.65 (April 23 Low).

GBP/USD: Sterling steadied near a 2-month high after British Prime Minister Theresa May's government won a no-confidence vote in parliament. The major traded flat at 1.2874, having hit a high of 1.2930 on Monday; it’s highest since November 15. FxWirePro's Hourly Sterling Strength Index stood at 136.82 (Highly Bullish) 0500 GMT. Investors’ attention will remain on developments surrounding Brexit deal, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2946 (November 12 High), a break above could take it near 1.3030 (November 15 High). On the downside, support is seen at 1.2795 (November 26 Low), a break below targets 1.2723 (November 15 Low). Against the euro, the pound was trading flat at 88.42 pence, having hit a high of 88.36, it’s highest since November 28.

AUD/USD: The Australian dollar slumped to a 1-week low amid heightened anxiety a protracted U.S.-China trade war could see a sharp slowdown in the world's biggest economies. The Aussie trades declined 0.1 percent at 0.7158, having hit a low of 0.7149 earlier; it’s lowest since January 10. FxWirePro's Hourly Aussie Strength Index stood at -147.66 (Highly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7116 (January 8 Low), a break below targets 0.7085 (December 20 Low). On the upside, resistance is located at 0.7246 (December 13 High), a break above could take it near 0.7273 (December 6 High)..

NZD/USD: The New Zealand dollar tumbled, weighed down by concerns over China's economic outlook. The Kiwi trades 0.4 percent down at 0.6751, having touched a low of 0.6741, its lowest level January 9. FxWirePro's Hourly Kiwi Strength Index was at -182.33 (Highly Bearish) by 0500 GMT. Immediate resistance is located at 0.6809 (Jan.9 High), a break above could take it near 0.6862 (Nov.14 High. On the downside, support is seen at 0.6726 (Jan. 7 Low), a break below could drag it below 0.6707 (Jan. 8 Low).

Equities Recap

Asian shares slumped, amid persisting concerns over China's economic slowdown and lingering Brexit tensions.

MSCI's broadest index of Asia-Pacific shares outside Japan edged down 0.1 percent.

Tokyo's Nikkei declined 0.2 percent to 20,402.27 points, Australia's S&P/ASX 200 index gained 0.3 percent to 5,850.10 points and South Korea's KOSPI surged 0.1 percent to 2,107.65 points.

Shanghai composite index fell 0.3 percent to 2,563.91 points, while CSI300 index traded 0.3 percent down at 3,119.11 points.

Hong Kong’s Hang Seng traded 0.3 percent lower at 26,827.03 points. Taiwan shares shed 0.3 percent to 9,789.15 points.

Commodities Recap

Crude oil prices declined as U.S. crude production quickly approached an unprecedented 12 million barrels per day (bpd). International benchmark Brent crude was trading 0.4 percent down at $61.05 per barrel by 0454 GMT, having hit a high of $62.46 on Friday, its highest since December 7. U.S. West Texas Intermediate was trading 0.6 percent lower at $52.00 a barrel, after rising as high as $53.29 on Friday, its highest since the December 7.

Gold prices eased after rising to a 3-day peak earlier in the session on concerns that the U.S. government shutdown was starting to take a toll on its economy. Spot gold declined 0.1 percent to $1,291.54 per ounce at 0512, having touched a high of $1,298.42 earlier in the month, its highest level since June 15. U.S. gold futures dipped 0.1 percent to $1,292.30 per ounce.

Treasuries Recap

The Japanese government bonds remained narrowly mixed amid a quiet session ahead of the country’s national consumer price inflation (CPI) data for the month of December and industrial production for November, scheduled to be released today by 23:50GMT and January 18 by 04:30GMT respectively. The yield on the benchmark 10-year JGB note, which moves inversely to its price, rose 1/2 basis point to 0.006 percent, the yield on the long-term 30-year note hovered around 0.701 percent while the yield on short-term 2-year slumped nearly 17 basis points to -0.167 percent.

The Australian government bonds slumped across the curve during Asian trading session as the UK government led by Prime Minister Theresa May survived a no-confidence vote a day after the heavy defeat of her Brexit deal. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 1 basis point to  2.286 percent, the yield on the long-term 30-year bond climbed 1/2 basis point to 2.830 percent and the yield on short-term 2-year up 1/2 basis point to 1.872 percent.

The Canadian government bond prices were lower across the yield curve in sympathy with U.S. Treasuries. The two-year fell 5.5 Canadian cents to yield 1.923 percent and the 10-year declined 25 Canadian cents to yield 2.000 percent. The 10-year yield touched its highest intraday since Dec. 24 last year at 2.002 percent.

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July 2 15:00 UTC Released

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449.6 Stale

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