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Asia Roundup: Antipodeans on track for weekly gains, dollar eases as Senate tax bill differs from House version, Asian shares off decade highs - Friday, November 10th, 2017

Market Roundup

  • Australia's central bank cuts inflation forecasts, to be lower for longer
     
  • New Zealand finmin says new RBNZ governor must take on dual mandate
     
  • Japan Nov Reuters Tankan DI 27 vs 31
     
  • China will relax controls on foreign ownership in Chinese banks and insurance companies
     
  • China to expand corporate tax cuts for hi-tech services firms nationwide
     
  • Dueling Republican tax plans advance in U.S. Congress
     
  • China media praises tone, outcome of Trump-Xi summit
     
  • Republican U.S. Senate candidate Moore hit by sexual misconduct allegations
     
  • Britain's future EU trade ties hinge on choice of "European model" -Barnier
     
  • UK's May picks Brexiteer to replace scandal-hit aid minister
  • Saudi says it has questioned 208 in graft inquiry, $100 bln stolen
     
  • Venezuela creditors skeptical despite pledges on Caracas meeting
     
  • U.S. fund investors snap up international stocks -Lipper
     
  • Foreign CB US debt holdings +$7.589 bln to $3.373 trln Nov 8 week
     
  • Treasuries +$7.057 bln to $3.046 trln, agencies +$151 mln to +$262.6 bln

Economic Data Ahead

  • (0300 ET/0800 GMT) Great Britain Sept Industrial Output m/m, y/y, f'cast 0.3%, 1.9%, 0.2%, 1.6% last
     
  • (0300 ET/0800 GMT) Great Britain Sept Manufacturing Output m/m, y/y, f'cast 0.3%, 2.4%, 0.4%, 2.8% last
     
  • (0300 ET/0800 GMT) Great Britain Sept Goods Trade Balance GBP f'cast -12.80 bln, -14.25 bln last
     

Key Events Ahead

  • (0230 ET/0730 GMT) Greece's Stournaras speaks at EU-Arab summit – Athens
     
  • (0700 ET/1200 GMT) Riksbank general council meeting – Stockholm
     
  • (0730 ET/1230 GMT) ECB's Mersch speaks at European Policy Forum – Windsor

FX Beat

DXY: The dollar index nudged lower and was on track for weekly losses amid uncertainty over U.S. tax reforms. The greenback against a basket of currencies traded flat at 94.52, having touched a high of 95.15 on Tuesday, its highest since Oct. 27. FxWirePro's Hourly Dollar Strength Index stood at -61.33 (Bearish) by 0500 GMT.

EUR/USD: The euro steadied after rising to a near 1-week high in the previous session, as the dollar weakened on signs the Senate would ask for a one-year delay in cutting corporate taxes to 20 percent. The European currency traded flat at 1.1643, having touched a low of 1.1554 on Tuesday; its lowest since July 20. FxWirePro's Hourly Euro Strength Index stood at -1.33 (Neutral) by 0400 GMT. Investors’ attention will remain on series of data from the Eurozone economies, ahead of the Michigan consumer sentiment index. Immediate resistance is located at 1.1676 (61.8% retracement of 1.1837 and 1.1674), a break above targets 1.1707 (50.0% retracement). On the downside, support is seen at 1.1608, a break below could drag it lower 1.1580 (Nov. 6 Low).

USD/JPY: The dollar eased, extending losses for the third straight session, amid concerns that the U.S. corporate tax cuts would be significantly delayed. The major was trading flat at 113.44, having hit a low of 113.09 the prior day, its lowest since Oct. 31. FxWirePro's Hourly Yen Strength Index stood at 27.82 (Neutral) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the Michigan consumer sentiment index for further momentum. Immediate resistance is located at 113.81 (5-DMA), a break above targets 114.40. On the downside, support is seen at 113.10, a break below could take it near 112.80.

GBP/USD: Sterling steadied after rebounding from previous session lows, amid growing political turbulence surrounding Prime Minister Theresa May's government. The major traded flat at 1.3139, having hit a low of 1.3039 on Friday, its lowest since Oct. 6. FxWirePro's Hourly Sterling Strength Index stood at -64.07 (Bearish) by 0400 GMT. Investors’ focus will remain on UK's NIESR GDP estimate, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3183 (21-DMA), a break above could take it near 1.3227. On the downside, support is seen at 1.3108 (Nov. 7 Low), a break below targets 1.3078. Against the euro, the pound was trading 0.1 percent down at 88.60 pence, having hit a high of 87.91 pence on Tuesday, its lowest since Nov. 2.

AUD/USD: The Australian dollar edged up, extending gains for the third consecutive session, despite RBA downgrading forecasts for inflation and growth, and signalling that interest rates will remain steady. The Aussie trades 0.1 percent up at 0.7681, having hit a low of 0.7638 on Tuesday; it’s lowest since Oct. 27 but managed to gain 0.4 percent for the week. FxWirePro's Hourly Aussie Strength Index stood at 4.06 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7638 (Nov. 7 Low), a break below targets 0.7600. On the upside, resistance is located at 0.7725 (61.8% retracement of 0.7883 and 0.7625), a break above could take it near 0.7755 (50% retracement).

NZD/USD: The New Zealand dollar extended previous session losses, as investors remained uncertain over the new Labour government's policies. The Kiwi trades 0.1 percent down at 0.6941, having touched a high of 0.6971, its highest level since Oct. 24 and was poised for its second straight winning week. FxWirePro's Hourly Kiwi Strength Index was at -65.74 (Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7013 (50.0% retracement of 0.7206 and 0.6818), a break above could take it near 0.7059 (38.2% retracement of 0.7206 and 0.6818). On the downside, support is seen at 0.6905 (10-DMA), a break below could drag it till 0.6820.

Equities Recap

Asian shares eased, while the greenback continued to slump on uncertainty about U.S. tax reforms after Senate Republicans unveiled a plan that differed from the House of Representatives' version in several key areas.

MSCI's broadest index of Asia-Pacific shares outside Japan tumbled 0.2 percent.

Tokyo's Nikkei fell 0.7 percent to 22,711.39 points, Australia's S&P/ASX 200 index slumped 0.3 percent to 6,029.40 points and South Korea's KOSPI declined 0.2 percent to 2,546.78 points.

Shanghai composite index rose 0.2 percent to 3,434.32 points, while CSI300 index was trading 0.9 percent up at 4,110.84 points.

Hong Kong’s Hang Seng was trading 0.3 percent higher at 29,208.02 points. Taiwan shares shed 0.7 percent to 10,732.67 points.

Commodities Recap

Crude oil prices continued to consolidate within narrow ranges, supported by ongoing supply cuts and strong demand, however, the possibilities of rising U.S. shale output capped the upside in prices. International benchmark Brent crude was trading 0.1 percent down at $63.71 per barrel by 0428 GMT, having hit a high of $64.62 on Tuesday, its highest since June 2015. U.S. West Texas Intermediate was trading flat at $56.98 a barrel, after rising as high as $57.67 on Tuesday, its highest since Jun. 2015.

Gold prices rose, hovering towards a near three-week high and was on track for its first weekly rise in a month amid uncertainty over U.S. tax reforms. Spot gold was 0.1 percent up at $1,285.16 per ounce at 0432 GMT, having touched its highest since Oct. 20 at $1,288.31 an ounce on Thursday and was up about 1.3 percent for the week so far. U.S. gold futures for December delivery were flat at $1,287.20.

Treasuries Recap

The 10-year U.S Treasury yield stood at 2.355 percent higher by 0.025 bps, while 5-year yield was 0.022 bps up at 2.026 percent.

The Japanese bonds traded mixed following the volatile benchmark stock index Nikkei. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1/2 basis points to 0.034 percent, the yield on long-term 40-year dipped 1-1/2 basis points to 0.951 percent and the yield on short-term 2-year up over 1/2 basis point to -0.186 percent.

The Australian short-term bonds yields slumped after RBA signals rates on hold as growth drags. The short-term 2-year Treasury note yields, which is most sensitive to interest-rate moves, fell over 1 basis point to 1.186 percent, but the yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1 basis point to 2.623 percent, the yield on the long-term 30-year note up 1 basis point to 3.397 percent.

The New Zealand government bonds gained at the time of closing after electronic card retail sales data for October came weaker than market expectations. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1/2 basis point to 2.95 percent, the yield on the 20-year note also slid 1/2 basis point to 3.48 percent and the yield on short-term 2-year ended 1-1/2 basis points lower at 2.06 percent.

The Canadian government bond prices were mostly lower across the yield curve in sympathy with U.S. Treasuries. The two-year was down 5 Canadian cents to yield 1.452 percent, and the 10-year declined 15 Canadian cents to yield 1.937 percent.

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November 24 15:30 UTC Released

USECRI Weekly Index*

Actual

145.6 %

Forecast

Previous

145.6 %

November 24 14:45 UTC Released

US1st Half-Mth Infl YY*

Actual

54.6 %

Forecast

Previous

54.6 %

November 27 09:00 UTC 27392739m

ITExport Prices*

Actual

Forecast

Previous

111 %

November 27 09:00 UTC 27392739m

ITImport Prices*

Actual

Forecast

Previous

116.1 %

November 27 14:00 UTC 30393039m

MXTrade Balance, $*

Actual

Forecast

Previous

-1.886 Bln USD

November 27 14:00 UTC 30393039m

MXTrade Balance SA*

Actual

Forecast

Previous

-1.559 Bln USD

November 27 15:30 UTC 31293129m

USDallas Fed mfg bus index

Actual

Forecast

Previous

27.6

November 27 21:00 UTC 34593459m

KRBOK Manufacturing BSI*

Actual

Forecast

Previous

87 Bln BRL

November 28 00:00 UTC 36393639m

BRCentral Govt Balance

Actual

Forecast

Previous

-22.725 Bln BRL

November 28 07:00 UTC 40594059m

DEGDP Growth QQ* Advance

Actual

Forecast

Previous

10.7 %

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