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Asia Roundup: Antipodeans hit multi-week peak on improving risk appetite, dollar index steadies as China's Xi pledges to cut import tariff, Asian shares bounce - Tuesday, April 10th, 2018 

Market Roundup

  • China's Xi renews pledges to open economy, cut tariffs this year
     
  • UK consumer spending wilts in March under heavy snow - surveys
     
  • Australia business conditions ease from record in March-NAB survey
     
  • IMF's Furusawa: global economy strengthening on investment, trade
     
  • Republican tax cuts to fuel historic U.S. deficits -CBO
     
  • Trump vows quick action in response to suspected chemical attack in Syria
     
  • Ex-Japan PM aide denies favour for Abe's friend as scandal clouds gather
     
  • FBI raids offices, home of Trump's personal lawyer –sources
     
  • Malaysia to hold general election on May 9; close contest expected

Economic Data Ahead

  • (0245 ET/0645 GMT) France Feb Industrial Output MM, 1.4% eyed, -2.0% last
     
  • (0400 ET/0800 GMT) Italy Feb Industrial Output MM SA, 0.8% eyed, -1.9% last
     
  • (0400 ET/0800 GMT) Italy Feb Industrial Output YY WDA, 4.8% eyed, 4.0% last
     
  • (0600 ET/1000 GMT) US Mar NFIB Business Optimism Index, 107.60 last
     

Key Events Ahead

  • (0300 ET/0700 GMT) Bank of Spain's Linde appears at financial crisis investigation committee in Parliament- Madrid
     
  • (0330 ET/0730 GMT) ECB supervisory chief Daniele Nouy makes the keynote speech at international conference on risk appetite framework in banks -Ljubljana, Slovenia
     
  • (0600 ET/1000 GMT) Norwegian finance ministry presents annual white paper about Norway's $1-trillion sovereign wealth fund-Oslo
     
  • (0900 ET/1300 GMT) Governor of Norges Bank Oystein Olsen speaks to Foreign Embassy Representatives-Oslo
     
  • (1830 ET/2230 GMT) Atlanta Fed President Raphael Bostic speaks about fair housing at Harvard University-Cambridge, Massachusetts
     
  • N/A European Central Bank policymaker Ewald Nowotny talks about the bank's plans to end its 2.5 billion euro stimulus programme this year-London
     
  • N/A The World Bank announces revised economic forecasts for South Africa at a news conference-Johannesburg.
     
  • N/A Ireland EUR 15-year benchmark via Barclays, Cantor Ireland, GS, HSBC, Natwest Markets, SG CIB.
     
  • N/A EFSF EUR 8-year benchmark via BNP Paribas, DZ BANK, JP Morgan.
     
  • N/A Tokyo Metropolitan Government USD 3-10 year via Barclays, Citi, JP Morgan, Nomura.
     

FX Beat

DXY: The dollar index steadied as Chinese President Xi Jinping pledged to open the country's economy further and lower import tariffs on products including cars. The greenback against a basket of currencies trades 0.1 percent up at 89.93, having touched a high of 90.60 on Friday, its highest since Mar. 1. FxWirePro's Hourly Dollar Strength Index stood at -100.71 (Slightly Bearish) by 0500 GMT.

EUR/USD: The euro eased after rising to a near 1-week peak in the previous session on European Central Bank President Mario Draghi's comments, citing that the slide in stock markets this year has not materially impacted eurozone financial conditions, indicating policymakers remained calm about the recent market volatility. The European currency traded 0.05 percent down at 1.2314, having touched a low of 1.2215 on Friday, its lowest since Mar. 1. FxWirePro's Hourly Euro Strength Index stood at -32.36 (Neutral) by 0400 GMT. Investors’ attention will remain on series of data from the Eurozone economies, ahead of the U.S. NFIB business optimism index and Fed official speeches. Immediate resistance is located at 1.2345 (Apr. 2 High), a break above targets 1.2388 (Mar. 22 High). On the downside, support is seen at 1.2277 (5-DMA), a break below could drag it lower 1.2218 (Apr. 5 Low).

USD/JPY: The dollar rose after falling for two straight sessions, as trade conflict worries ebbed after Chinese President Xi Jinping promised to lower import tariffs on certain products. However, concerns that U.S.-Russia relations could worsen over the Syria issue limited the upside. The major was trading 0.4 percent up at 107.12, having hit a high of 107.49 on Friday, its highest since Mar. 28. FxWirePro's Hourly Yen Strength Index stood at -44.99 (Neutral) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. NFIB business optimism index and Fed official speeches. Immediate resistance is located at 107.46 (Apr. 6 High), a break above targets 107.90 (Feb. 21 High). On the downside, support is seen at 106.51 (10-DMA), a break below could take it lower 106.22 (2-DMA).

GBP/USD: Sterling held firm after rising to a near 2-week peak in the prior session, as upbeat British house prices boosted expectations the Bank of England could raise interest rates in May to help curb inflation. The major traded 0.1 percent up at 1.4133, having hit a high of 1.4164 the day before, it’s highest since Mar. 28. FxWirePro's Hourly Sterling Strength Index stood at 73.59 (Bullish) by 0400 GMT. Investors’ focus will remain on the Bank of England's (BoE) Haldane speak, ahead of the U.S. fundamental drivers.  Immediate resistance is located at 1.4171 (Mar. 23 High), a break above could take it near 1.4200 (Mar. 28 High). On the downside, support is seen at 1.4070 (5-DMA), a break below targets 1.4012 (Mar 30 Low). Against the euro, the pound was trading 0.1 percent up at 87.13 pence, having hit a high of 86.97 pence on Monday, it’s highest since Mar 22.

AUD/USD: The Australian dollar rallied to a 2-week peak after a speech by Chinese President Xi Jinping promising to cut import tariffs eased concerns about a trade conflict between U.S. - China. However, disappointing Australia’s NAB business condition and confidence surveys weighed negatively on the major. The Aussie trades 0.5 percent up at 0.7730, having hit a high of 0.7738 earlier; it’s highest since Mar. 27. FxWirePro's Hourly Aussie Strength Index stood at 91.46 (Slightly Bullish) by 0500 GMT.  Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7643 (Mar. 29 Low), a break below targets 0.7600. On the upside, resistance is located at 0.7757 (Mar. 27 high), a break above could take it near 0.7783 (Mar. 22 High).

NZD/USD: The New Zealand dollar advanced to a near 1-month high after the NZIER Business Confidence indicator printed better than expected, at -11 percent versus the previous -12 percent decline. Moreover, China's President, Xi Jinping's comments on trade war supported the market sentiment. The Kiwi trades 0.4 percent up at 0.7331, having touched a high of 0.7332, its highest level since Mar. 15. FxWirePro's Hourly Kiwi Strength Index was at 173.87 (Highly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7354 (Mar. 14 High), a break above could take it near 0.7386 (Feb. 21 High). On the downside, support is seen at 0.7282 (5-DMA), a break below could drag it below 0.7231 (Feb 27 Low).

Equities Recap

Asian shares bounced, while the greenback steadied as Chinese President Xi Jinping promised to lower import tariffs on products including cars, easing investor worries over an escalating U.S.-China trade row.

MSCI's broadest index of Asia-Pacific shares outside Japan jumped 0.7 percent.

Tokyo's Nikkei rose 0.8 percent to 21,843.74 points, Australia's S&P/ASX 200 index surged 0.8 percent to 5,855.60 points and South Korea's KOSPI gained 0.3 percent to 2,450.35 points.

Shanghai composite index rallied 0.7 percent to 3,158.78 points, while CSI300 index was trading 0.9 percent up at 3,886.03 points.

Hong Kong’s Hang Seng was trading 1.4 percent higher at 30,645.95 points. Taiwan shares added 0.3 percent to 10,927.18 points.

Commodities Recap

Crude oil prices rose to a 1-week peak on hopes that a trade dispute between the United States and China could be resolved without greater damage to the global economy. International benchmark Brent crude was trading 0.6 percent up at $68.96 per barrel by 0432 GMT, having hit a low of $66.86 on Wednesday, its lowest since Mar. 20. U.S. West Texas Intermediate was trading 0.8 percent up at $63.77 a barrel, after falling as low as $61.84 on Friday, its weakest since Mar. 19.

Gold prices slumped from a near 1-week peak hit earlier in the day after Chinese President Xi Jinping promised to lower import tariffs on certain products, helping ease fears over an escalating trade row with the United States. Spot gold was down 0.2 percent at $1,333.78 an ounce as of 0436 GMT, after rising to a high of $1,338.00 earlier, its highest since Apr. 4. U.S. gold futures fell 0.2 percent to $1,337.50 an ounce.

Treasuries Recap

The 10-year U.S Treasury yield stood at 2.804 percent higher by 0.019 bps, while 5-year yield was 0.02 bps up at 2.621 percent.

The Japanese government bonds traded narrowly higher Tuesday as investors wait to watch the country’s 30-year auction, scheduled to be held on April 12 by 03:45GMT. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, remained tad lower at 0.03 percent, the yield on the long-term 30-year note slipped 1/2 basis point to 0.73 percent and the yield on short-term 2-year also edged slightly lower at -0.14 percent.

The Australian government bonds slumped following weakness in the U.S. Treasuries as investors’ risk appetite improved on optimism in Wall Street after the United States President Donald Trump tried to appease China on trade worries. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose nearly 3 basis points to 2.695 percent, the yield on the long-term 30-year note climbed 2-1/2 basis points to 3.290 percent and the yield on short-term 2-year also surged nearly 2 basis points to 2.053 percent.

The Canadian government bond prices were mixed across the yield curve, with the two-year down 0.5 Canadian cent to yield 1.794 percent and the 10-year rising 3 Canadian cents to yield 2.14 percent.

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