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Asia Roundup: Antipodeans off multi- month peaks, dollar index steadies near 3-year lows amid persisting U.S. policy concerns, Asian shares rally - Monday, January 29th, 2018

Market Roundup

  • U.S. lawmakers at NAFTA talks express optimism about modernizing trade pact.
     
  • Republican US senators urge Congress to revisit bill to protect Mueller.
     
  • Trump security team sees building U.S. 5G network as option.
     
  • Brexit legislation under fire as it enters upper house.
     
  • Business survey says Brexit biggest threat to UK financial centre.
     
  • China eyes black swans, gray rhinos as 2018 growth seen slowing to 6.5-6.8 pct - media.
     
  • China declares intention to improve ties with Japan.
     
  • Japan punishes Coincheck after $530 mln cryptocurrency theft.
     

Economic Data Ahead

  • (0200 ET/0700 GMT) Germany Dec Import Prices MM f'cast 0.2%, last 0.8%
     
  • (0200 ET/0700 GMT) Germany Dec Import Prices YY f'cast 1.0%, last 2.7%

Key Events Ahead

  • (0315 ET/0815 GMT) Riksbank's Stefan Ingves speaks on the Basel III Accord at the ILF's conference in his role as Chairman of the Basel Committee in Frankfurt.
     
  • (0500 ET/1000 GMT) ECB's Peter Praet speaks at Council of the European Union in Brussels.
     
  • (1100 ET/1600 GMT) ECB's Benoit Coeure will give a presentation before the Commission Economics and financing of MEDEF in Paris.
     
  • N/A ECB's Lautenschläger, Basel committee's Ingves, European Banking Authority's Enria, Bundesbank's Dombret speak at a Frankfurt conference on banking reforms in Frankfurt.

FX Beat

DXY: The dollar index rebounded from a 3-year low, as the yields on U.S. two-year Treasuries rose steadily to their highest since 2008 and are fully priced for a rate hike by the Federal Reserve in March. The greenback against a basket of currencies traded 0.2 percent up at 89.14, having touched a low of 89.01 earlier, its lowest since December 2014. FxWirePro's Hourly Dollar Strength Index stood at -38.40 (Neutral) by 0500 GMT.

EUR/USD: The euro slightly eased but held gains above the 1.2400 handle as the greenback attempted a rebound from a 3-year low hit earlier in the day. The European currency traded 0.1 percent down at 1.2414, having touched a high of 1.2538 on Thursday, its highest since Dec. 2014. FxWirePro's Hourly Euro Strength Index stood at 21.46 (Neutral) by 0500 GMT. Investors’ attention will remain on series of economic data from Eurozone, ahead of U.S. personal consumption expenditures, personal income, and spending data. Immediate resistance is located at 1.2500, a break above targets 1.2590. On the downside, support is seen at 1.2351 (50.0% retracement of 1.2264 and 1.2537), a break below could drag it lower 1.2307 (38.2% retracement).

USD/JPY: The dollar steadied after falling to 4-1/2 month lows in the previous session, as U.S. GDP data released on Friday showed strong domestic consumption and capital spending. The major was trading 0.2 percent up at 108.77, having hit a low of 108.28 on Friday, its lowest since Sept 11. FxWirePro's Hourly Yen Strength Index stood at 54.83 (Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. personal consumption expenditures, personal income and spending data for further momentum. Immediate resistance is located at 108.98 (78.6% retracement of 111.49 and 108.28), a break above targets 109.52 (61.8% retracement). On the downside, support is seen at 108.20, a break below could take it lower 108.00.

GBP/USD: Sterling held gains above the 1.4100 handle, amid increased optimism around Brexit and on data that showed Britain's economy unexpectedly picked up momentum in the last three months of 2017. Sterling traded 0.2 percent up at 1.4137, having hit a high of 1.4345 on Thursday, it’s highest since June 2016. FxWirePro's Hourly Sterling Strength Index stood at -94.46 (Slightly Bearish) by 0500 GMT. Immediate resistance is located at 1.4370, a break above could take it near 1.4400. On the downside, support is seen at 1.3967 (10-DMA), a break below targets 1.3904 (50.0% retracement of 1.3458 and 1.4345). Against the euro, the pound was trading 0.1 percent down at 87.82 pence, having hit a low of 87.89 pence earlier, it’s lowest since Jan. 23.

AUD/USD: The Australian dollar edged down after rising to a 2-1/2 year peak in the previous session, as speculators booked some profits on short U.S. dollar positions while bracing for a report on domestic inflation later in the week. The Aussie trades 0.2 percent down at 0.8090, having hit a high of 0.8135 on Friday; it’s highest since May 2015. FxWirePro's Hourly Aussie Strength Index stood at 125.33 (Highly Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.8012 (61.8% retracement of 0.7807 and 0.8135), a break below targets 0.7973 (50.0% retracement). On the upside, resistance is located at 0.8150, a break above could take it near 0.8200.

NZD/USD: The New Zealand dollar declined, as the greenback attempted a rebound from multi-year lows. The Kiwi trades 0.4 percent down at 0.7331, having touched a high of 0.7435 on Wednesday, its highest level since Aug. 3. FxWirePro's Hourly Kiwi Strength Index was at -47.39 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7450, a break above could take it near 0.7490. On the downside, support is seen at 0.7288, a break below could drag it lower 0.7245 (Jan 18 Low).

Equities Recap

Asian shares extended their bullish run amid upbeat corporate earnings and strong global economic growth, while the dollar bounced back from recent multi-year lows, as the White House continued to highlight unfair trade practices by competitors.

MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.4 percent.

Tokyo's Nikkei eased 0.1 percent to 23,615.65 points, Australia's S&P/ASX 200 index surged 0.4 percent to 6,075.40 points and South Korea's KOSPI advanced 0.8 percent to 2,594.74 points.

Shanghai composite index declined 0.9 percent to 3,524.19 points, while CSI300 index was trading 1.8 percent down at 4,304.38 points.

Hong Kong’s Hang Seng was trading 0.6 percent lower at 32,960.18 points. Taiwan shares added 0.7 percent to 11,221.81 points.

Commodities Recap

Crude oil prices steadied, supported by strong demand and ongoing supply cuts lead by OPEC and Russia. International benchmark Brent crude was trading 0.05 percent up at $70.55 per barrel by 0435 GMT, having hit a high of $71.25 on Thursday, its highest since Dec. 2014. U.S. West Texas Intermediate was trading 0.3 percent up at $66.36 a barrel, after rising as high as $66.63 on Thursday, its highest since Dec. 2014.

Gold prices eased in early deals but traded near more than 17-month highs hit last week as the U.S. dollar hovered around three-year lows, Spot gold declined 0.1 percent to $1,349.07 per ounce at 0439 GMT, having hit a high of 1,365.95 on Thursday, highest since Aug. 3, 2016. U.S. gold futures for February delivery fell 0.2 percent to $1,349.50 per ounce.

Treasuries Recap

The 10-year U.S Treasury yield stood at 2.682 percent higher by 0.02 bps, while 5-year yield was 0.02 bps up at 2.490 percent.

The Japanese government bonds fell during early Asian session at the start of the week on broad-based debt sell-off in the market, following the sudden slowdown in the Bank of Japan’s bond-buying program. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose nearly 1 basis point to 0.08 percent, the yield on the long-term 30-year note hovered around 0.81 percent and the yield on short-term 2-year traded tad higher at -0.12 percent.

The Australian government bonds traded narrowly mixed as investors remain sidelined in any major trading activity amid a silent session that witnessed no data of major economic importance. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, traded flat at 2.839 percent, the yield on the long-term 30-year note slid 2 basis points to 3.460 percent and the yield on short-term 2-year rose 1/2 basis point to 2.093 percent.

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May 24 08:30 UTC Released

GBRetail Sales YY

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1.4 %

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