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Asia Roundup: Antipodeans ease on downbeat China Caixin Manufacturing PMI, dollar index declines with U.S. tax bill in focus, Asian shares gain - Friday, December 1st, 2017

Market Roundup

  • U.S. Senate tax bill stalls on deficit-focused 'trigger'
  • Trump considers plan to replace Tillerson with CIA chief - U.S. officials
     
  • U.S. Senate Ethics Committee opens probe of Senator Franken
     
  • U.S. attorney general Sessions evasive on Russia probe -congressmen
     
  • Trump: China's N.Korea diplomacy appears to have 'no impact on Little Rocket Man'
     
  • North Korea images suggest missile capable of hitting all America - U.S. experts
     
  • U.S. formally opposes China market economy status at WTO
     
  • China Nov Caixin Mfg PMI Final 50.8, 51.0 last, 50.9 f' cast
     
  • Japan Oct core CPI +0.8% y/y, Tokyo Nov core +0.6%, both as eyed
     
  • Japan Oct unemployment unch, 2.8% as eyed, jobs-applicants ratio 1.55, 1.53 eyed
     
  • Japan Oct household spending -2.0% m/m, unch y/y, -1.4%, -0.4% eyed
     
  • Japan MoF survey – Japan Inc Q3 CAPEX +4.2% y/y, profits +5.5%, sales +4.8%
     
  • New Zealand finance minister promises to maintain fiscal prudence, spread prosperity
     
  • New Zealand Q3 Terms of Trade q/q, 0.7%, 1.5% last, 0.9% f' cast
     
  • Australia home prices stall as Sydney hits an air-pocket
     
  • UK lawmakers cast doubt on plan to avoid Ireland border after Brexit
     
  • No north-south Ireland border despite leaving customs union, British minister pledges
     
  • As OPEC extends output cuts, Asia turns to North America for more oil
     
  • U.S.-based money market funds post $33 bln inflows, largest of 2017 -Lipper
     
  • Foreign CB US debt holdings +15.03 bln to $3.39 trln Nov 29 week
     
  • Treasuries +4.88 bln to $3.05 trln, agencies +1.79 mln to +$263.79 bln

Economic Data Ahead

  • (0350 ET/0850 GMT) France Nov Markit Mfg PMI f' cast 57.5, 57.5 last
  • (0355 ET/0855 GMT) Germany Nov Markit/BME Mfg PMI f' cast 62.5, last 62.5
     
  • (0400 ET/0900 GMT) EZ Nov Markit Mfg Final PMI f' cast 60.0, last 60.0
     
  • (0430 ET/0930 GMT) Great Britain Nov Markit/CIPS Mfg PMI f' cast 56.5, last 56.3

Key Events Ahead

  • N/A Riksbank's Floden talks at a meeting – Stockholm
     
  • (0830 ET/1330 GMT) Fed's Yellen participates in Fed Challenge Finals – Washington

  • (0905 ET/1405 GMT) Fed's Bullard presents on US economy – Little Rock
     
  • (0930 ET/1430 GMT) Fed's Kaplan participates in a discussion – McAllen
     
  • (1015 ET/1515 GMT) Fed's Harker speaks at a conference – Philadelphia
     

FX Beat

DXY: The dollar index eased as the market endured the wait for a vote on a U.S. tax reform bill. The greenback against a basket of currencies traded 0.2 percent down at 92.89, having touched a high of 93.51 in the prior session, its highest since Nov. 22. FxWirePro's Hourly Dollar Strength Index stood at 59.41 (Bullish) by 0500 GMT.

EUR/USD: The euro rose, extending gains for the third straight session after German Chancellor Angela Merkel's conservatives held talks with centre-left Social Democrats (SPD) to facilitate the formation of a stable government in a bid to end the country's political impasse. The European currency traded 0.1 percent up at 1.1912, having touched a low of 1.1809 the day before, its lowest since Nov. 22. FxWirePro's Hourly Euro Strength Index stood at 94.86 (Slightly Bullish) by 0400 GMT. Investors’ attention will remain on series of PMI's from the Eurozone economies, ahead of U.S. construction spending and manufacturing PMI from both Markit and ISM. Immediate resistance is located at 1.1961 (Nov. 27 High), a break above targets 1.2000. On the downside, support is seen at 1.1883 (5-DMA), a break below could drag it lower 1.1834 (10-DMA).

USD/JPY: The dollar rallied to a 10-day high against the yen after U.S. tax reform plans were seen progressing towards legislative approval following an endorsement by Senator John McCain. The major was trading flat at 112.56, having hit a high of 112.69 earlier, its highest since Nov. 21. FxWirePro's Hourly Yen Strength Index stood at -95.67 (Slightly Bearish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. construction spending and manufacturing PMI from both Markit and ISM for further momentum. Immediate resistance is located at 112.79 (50.0% retracement of 114.73 and 110.84), a break above targets 113.25 (38.2% retracement). On the downside, support is seen at 112.17, a break below could take it near 111.80 (10-DMA).

GBP/USD: Sterling advanced to an over 2-month high as investors hopes grew of a deal between Britain and the European Union at a summit next month. The major traded 0.05 percent up at 1.3530, having hit a high of 1.3549 earlier, it’s highest since Sept. 25. FxWirePro's Hourly Sterling Strength Index stood at 113.74 (Highly Bullish) by 0400 GMT. Investors’ focus will remain on developments surrounding Brexit deal and UK manufacturing PMI, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3550, a break above could take it near 1.3660. On the downside, support is seen at 1.3438, a break below targets 1.3324 (10-DMA). Against the euro, the pound was trading 0.1 percent down at 88.07 pence, having hit a high of 87.76 pence in the previous session, it’s highest since Nov. 2.

AUD/USD: The Australian dollar slumped to a 10-day low after the China Caixin PMI showed marginal deterioration in operating conditions in November. The Chinese Caixin manufacturing PMI came in at 50.8 versus 50.9 expected and 51.00 previous recorded in October. The Aussie trades down at 0.7560, having hit a low of 0.7551 earlier; it’s lowest since Nov. 21. FxWirePro's Hourly Aussie Strength Index stood at -16.41 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7551 (Session Low), a break below targets 0.7532 (Nov. 21 Low). On the upside, resistance is located at 0.7619 (21-DMA), a break above could take it near 0.7665 (Nov. 13 High).

NZD/USD: The New Zealand dollar extended losses for the fourth straight session after data released earlier showed China Caixin manufacturing PMI missed expectations. The Kiwi trades 0.1 percent down at 0.6822, having touched a low of 0.6816 earlier, its lowest level since Nov. 21. FxWirePro's Hourly Kiwi Strength Index was at -129.02 (Highly Bearish) by 0500 GMT. Investors’ will continue to digest downbeat Chinese data, ahead of U.S. economic data. Immediate resistance is located at 0.6862 (10- DMA), a break above could take it near 0.6930. On the downside, support is seen at 0.6816 (Session Low), a break below could drag it lower 0.6800.

Equities Recap

Asian shares advanced, boosted by Wall Street gains, while the greenback slightly eased as investors cautiously waited for a vote on a U.S. tax reform bill.

MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.1 percent but was 2.6 percent lower for the week.

Tokyo's Nikkei rose 0.6 percent to 22,854.11 points, Australia's S&P/ASX 200 index gained 0.3 percent to 5,989.80 points and South Korea's KOSPI rallied 0.2 percent to 2,480.06 points.

Shanghai composite index fell 0.3 percent to 3,308.06 points, while CSI300 index was trading 0.3 percent down at 3,992.31 points.

Hong Kong’s Hang Seng was trading 0.2 percent lower at 29,109.41 points. Taiwan shares added 0.4 percent to 10,600.37 points.

Commodities Recap

Crude oil prices steadied after OPEC and non-OPEC producers led by Russia agreed to extend their production curbs in a widely expected move aimed at ending a persistent glut in global supplies. International benchmark Brent crude was trading 0.3 percent up at $62.87 per barrel by 0428 GMT, having hit a low of $62.14 the day before, its lowest since Nov. 21. U.S. West Texas Intermediate was trading 0.3 percent lower at $57.59 a barrel, after falling as low as $56.74 on Thursday, its lowest since Nov. 21.

Gold prices edged higher after touching a 3-1/2 week low in the previous session, as the dollar weakened slightly after the progress on U.S. tax legislation hit a blockade. Spot gold was trading flat at $1,274.71 an ounce at 0434 GMT, having declined 0.7 percent to its lowest since Nov. 6 at $1,270.30 on Thursday. U.S. gold futures gained 0.1 percent at $1,274.30.

Treasuries Recap

The 10-year U.S Treasury yield stood at 2.404 percent lower by 0.011 bps, while 5-year yield was 0.011 bps down at 2.132 percent.

The Australian government bond futures eased, with the three-year bond contract down 3 ticks at 98.050. The 10-year contract was off 3.5 ticks at 97.45.

The New Zealand government bonds gained, sending yields about 1 basis point lower across the curve.

The Canadian government bond prices were mixed across the yield curve, with the two-year up 0.5 Canadian cent to yield 1.434 percent and the 10-year flat to yield 1.880 percent. The gap between Canada's 10-year yield and its U.S. equivalent widened by 1.8 basis points to a spread of -51.4 basis points, its widest since July 6.

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December 15 21:00 UTC Released

USOverall Net Capital Flows

Actual

151.2 Bln USD

Forecast

Previous

-51.3 Bln USD

December 15 21:00 UTC Released

USNet L-T Flows,Incl.Swaps

Actual

7.9 Bln USD

Forecast

Previous

65.1 Bln USD

January 9 11:00 UTC 3374633746m

BRRetail Sales MM*

Actual

Forecast

0.35 %

Previous

January 9 11:00 UTC 3374633746m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

January 9 11:00 UTC 3374633746m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

January 9 11:00 UTC 3374633746m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

January 9 11:00 UTC 3374633746m

BRRetail Sales MM*

Actual

Forecast

0.35 %

Previous

January 9 11:00 UTC 3374633746m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

December 12 09:30 UTC 66656665m

GBRPIX YY

Actual

Forecast

Previous

4.2 %

December 12 09:30 UTC 66656665m

GBPPI Input Prices MM NSA

Actual

Forecast

Previous

1 %

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