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Asia Roundup: Antipodeans gain as U.S.-China extend trade talks, yen eases amid improving risk appetite, Asian shares at 3-1/2 month peak - Wednesday, January 9th, 2019 

Market Roundup

  • U.S.-China trade talks extended amid some signs of progress
     
  • In Oval Office speech, Trump demands a wall but does not declare emergency
     
  • UK PM May defeated in parliament, lawmakers create new obstacle to no-deal Brexit
     
  • Manafort allegedly lied about giving polling data to Russian -court filing
     
  • Japan real wages rise most in five months, positive sign for consumption
     
  • Australia Nov Building Approvals, -9.1%, -0.5% f'cast , -1.5% prev
     

Economic Data Ahead

  • (0200 ET/0700 GMT) Germany Nov Trade Balance, EUR, SA, 18.0bln f'cast, 17.3bln prev
     
  • (0200 ET/0700 GMT) Germany Nov Exports MM SA, -0.3% f'cast, 0.7% prev
     
  • (0200 ET/0700 GMT) Germany Nov Imports MM SA, 0.0% f'cast, 1.3% prev
     
  • (0245 ET/0745 GMT) France Dec Consumer Confidence, 90 f'cast, 92 prev
     
  • (0500 ET/1000 GMT) EZ Dec Unemployment Rate, 8.1% f'cast, 8.1% prev
     

Key Events Ahead

  • No significant events scheduled

FX Beat

DXY: The dollar index eased, amid hopes of progress in the U.S.-China trade dispute. The greenback against a basket of currencies trades 0.1 percent down at 95.77, having touched a low of 95.64 on Monday, its lowest since Oct. 22. FxWirePro's Hourly Dollar Strength Index stood at -98.95 (Slightly Bearish) by 0400 GMT.

EUR/USD: The euro surged, reversing some of its previous session losses, as the greenback weakened after data showed U.S. job openings fell in November, weighed down by sharp declines in construction and other services. The European currency traded 0.1 percent up at 1.1454, having touched a high of 1.1484 on Tuesday, its highest since Jan. 2. FxWirePro's Hourly Euro Strength Index stood at 61.18 (Bullish) by 0400 GMT. Investors’ attention will remain on a series of data from the Eurozone economies, ECB non-monetary policy meeting, and EZ unemployment rate, ahead of the latest FOMC policy meeting minutes and speeches from Fed officials. Immediate resistance is located at 1.1485 (December 20 High), a break above targets 1.1527 (October 18High). On the downside, support is seen at 1.1393 (November 19 Low), a break below could drag it till 1.1360 (December 7 Low).

USD/JPY: The dollar rose, extending gains for the fourth straight session after the United States and China agreed to extend trade talks in Beijing for an unscheduled third day. The major was trading 0.1 percent up at 108.88, having hit a low of 104.65 last week, its lowest since March 26. FxWirePro's Hourly Yen Strength Index stood at -102.79 (Highly Bearish) by 0400 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the latest FOMC policy meeting minutes and speeches from Fed officials. Immediate resistance is located at 109.46 (April 26 High), a break above targets 109.73 (June 1 High). On the downside, support is seen at 108.02 (January 7 Low), a break below could take it lower 107.65 (April 23 Low).

GBP/USD: Sterling steadied after easing from a 1-week peak in the previous session, as investors await British lawmakers debate on Prime Minister Theresa May's Brexit withdrawal agreement. The major traded 0.2 percent up at 1.2740, having hit a low of 1.2373 on Thursday; it’s lowest since April 2017. FxWirePro's Hourly Sterling Strength Index stood at -33.07 (Neutral) 0400 GMT. Investors’ attention will remain on developments surrounding Brexit deal, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2815 (December 31 High), a break above could take it near 1.2884 (November 19 High). On the downside, support is seen at 1.2680 (December 31 Low), a break below targets 1.2615 (December 27 Low). Against the euro, the pound was trading 0.05 percent up at 89.93 pence, having hit a low of 90.92 on Thursday, it’s lowest since August 18.

AUD/USD: The Australian dollar rallied to a 3-week peak amid growing speculation that Beijing and Washington might be making progress in resolving their trade dispute. The Aussie trades 0.2 percent up at 0.7156, having hit a low of 0.6744 on Thursday; it’s lowest since April 2009. FxWirePro's Hourly Aussie Strength Index stood at 121.89 (Highly Bullish) by 0400 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7085 (December 20 Low), a break below targets 0.7046 (5-DMA). On the upside, resistance is located at 0.7200 (December 19 High), a break above could take it near 0.7268 (November 22 High).

NZD/USD: The New Zealand dollar recouped previous session losses, amid signs of United States and China trade talks progress on issues including purchases of U.S. farm and energy commodities and increased access to China's markets. The Kiwi trades 0.5 percent up at 0.6757, having touched a high of 0.6767 on Monday, its highest level December 21. FxWirePro's Hourly Kiwi Strength Index was at 52.68 (Bullish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6790 (Dec. 21 High), a break above could take it near 0.6817 (Dec. 17 High). On the downside, support is seen at 0.6691 (Dec. 31 Low), a break below could drag it below 0.6653 (Jan. 2 Low).

Equities Recap

Asian shares rallied to a 3-1/2-week peak, supported by growing optimism that the United States and China can strike a trade deal.

MSCI's broadest index of Asia-Pacific shares outside Japan edged higher 1.5 percent.

Tokyo's Nikkei rose 1.1 percent to 20,417.71 points, Australia's S&P/ASX 200 index gained 0.9 percent to 5,778.30 points and South Korea's KOSPI rallied 2.01 percent to 2,066.02 points.

Shanghai composite index rose 1.4 percent to 2,560.42 points, while CSI300 index traded 1.7 percent up at 3,098.84 points.

Hong Kong’s Hang Seng traded 2.4 percent higher at 26,492.51 points. Taiwan shares added 1.8 percent to 9,738.31 points.

Commodities Recap

Crude oil prices surged, extending gains from the previous session on hopes that Washington and Beijing can resolve a trade dispute that has triggered a global economic slowdown. International benchmark Brent crude was trading 1.4 percent up at $59.47 per barrel by 0412 GMT, having hit a high of $59.50 earlier, its highest since December 17. U.S. West Texas Intermediate was trading 1.6 percent higher at $50.56 a barrel, after rising as high as $50.59, its highest since the December 17.

Gold prices declined as risk appetite improved on hopes of a U.S.-China trade deal. Spot gold eased 0.2 percent at $1,282.19 by 0416 GMT, having touched a high of $1,298.42 on Friday, its highest level since June 15. U.S. gold futures were also steady at $1,286.70 per ounce.

Treasuries Recap

The Australian government bonds continued to shrink during Asian session, tracking a similar movement in the U.S. Treasuries on hopes of a faster progress in the U.S.-China trade talks, on way to reach an agreement soon. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 1/2 basis point to 2.335 percent, the yield on the long-term 30-year bond also remained tad higher at 2.844 percent and the yield on short-term 2-year too traded 1/2 basis point higher at 1.908 percent.

The New Zealand government bonds were little changed, with 10-year yields holding at 2.42 percent.

The Canadian government bond prices were lower across the yield curve, with the two-year down 2.5 Canadian cents to yield 1.9 percent and the 10-year falling 9 Canadian cents to yield 1.967 percent. The gap between Canada's 2-year yield and its U.S. equivalent widened by 5 basis points to a spread of 68.8 basis points.

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July 2 15:00 UTC Released

DKCurrency Reserves

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449.6 Stale

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