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Asia Roundup: Antipodeans slump on weaker-than-expected Chinese data, greenback gains on Fed rate hike expectations, Asian shares plunge - Friday, December 14th, 2018

Market Roundup

  • China says on track to hit 2018 GDP growth target, faces more uncertainties next year
     
  • EU gives May assurances on Brexit, but cold comfort
     
  • NZ cenbank proposes almost doubling bank capital requirements, kiwi dlr falls
     
  • Record $46 bln pulled from U.S.-based stock funds in latest week -Lipper
     
  • U.S. fund investors pull record cash from stocks in latest week -Lipper
     
  • Foreign CB US debt holdings -$19.408 bln to $3.384 tln Dec 12 week
     
  • Treasuries -$19.723 bln to $3.009 tln, agencies +$69 mln to $308.412 bln
     
  • China Nov Industrial Output YY, 5.4%, 5.9% f'cast, 5.9% prev
     
  • China Nov Retail Sales YY, 8.1%, 8.8% f'cast, 8.6% prev
     
  • China Nov Urban investment (ytd)yy, 5.9%, 5.8% f’cast, 5.7% prev
     
  • Japan Q4 Tankan Big Mf Idx, 19, 17 f'cast, 19 prev
     
  • Japan Q4 Tankan Small Mf Idx, 14, 13 f'cast, 14 prev
     
  • Japan Dec Nikkei Mfg PMI Flash, 52.4, 52.2 prev
     

Economic Data Ahead

  • (0200 ET/0700 GMT) Germany Nov Car Registration YY, -7.4% prev
     
  • (0200 ET/0700 GMT) Germany Nov Wholesale Price Index YY, 4.0% prev
     
  • (0200 ET/0700 GMT) Great Britain Nov Car Registration YY, -2.9% prev
     
  • (0330 ET/0830 GMT) Germany Dec Markit Comp Flash PMI, 52.5 f'cast, 52.3 prev
     
  • (0400 ET/0900 GMT) EZ Dec Markit Comp Flash PMI, 52.8 f'cast, 52.7 prev
     

Key Events Ahead

  • N/A ECB President Mario Draghi participates in the European Council meeting in Brussels, Belgium.
     
  • (0315 ET/0815 GMT) ECB's Luis de Guindos speaks at the 6th Frankfurt Conference in Frankfurt, Germany
     
  • (0430 ET/0930 GMT) ECB's Lautenschlager speaks at the Goethe University in Frankfurt, Germany
     
  • (0830 ET/1330 GMT) ECB's Ignazio Angeloni speaks at Rome Investment Forum 2018 "Invest in Europe"
     
  • (0915 ET/1415 GMT) Federal Reserve issues Industrial Production for November
     
  • (1000 ET/1500 GMT) German Economy Minister Peter Altmaier speaks in Berlin
     

FX Beat

DXY: The dollar index nudged higher as the Federal Reserve is widely expected to raise interest rates by 25 basis points, its fourth rate hike this year, however, markets focus will remain on the policy outlook for 2019. The greenback against a basket of currencies trades 0.1 percent up at 97.15, having touched a high of 97.55 on Tuesday, its highest since Nov 13. FxWirePro's Hourly Dollar Strength Index stood at 49.54 (Neutral) by 0500 GMT.

EUR/USD: The euro consolidated within narrow ranges, after the European Central Bank formally ended its 2.6 trillion euro bond purchase scheme but remained concern over rising uncertainty from the threat of a global trade war, the prospect of a hard Brexit and Italy's budget standoff with the European Commission. The European currency traded flat at 1.1360, having touched a high of 1.1442 on Monday, its highest since Nov. 20. FxWirePro's Hourly Euro Strength Index stood at 16.45 (Neutral) by 0400 GMT. Investors’ attention will remain on a series of data from the Eurozone economies and Markit prelim PMI's, ahead of the U.S. retail sales, capacity utilization, industrial production, and Markit flash PMI's. Immediate resistance is located at 1.1401 (November 29 High), a break above targets 1.1455 (November 2 High). On the downside, support is seen at 1.1305 (November 30 Low), a break below could drag it till 1.1267 (November 28 Low).

USD/JPY: The dollar edged down from a near 2-week peak touched in the previous session, as risk-sentiment weakened after data showed China's November retail sales grew at the weakest pace since 2003 and industrial output rose the least in nearly three years as domestic demand softened further. The major was trading 0.1 percent down at 113.48, having hit a high of 113.70 on Thursday, its highest since December 3. FxWirePro's Hourly Yen Strength Index stood at -9.42 (Neutral) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. retail sales, capacity utilization, industrial production, and Markit flash PMI's. Immediate resistance is located at 113.72 (November 30 High), a break above targets 114.03 (November 28 High). On the downside, support is seen at 113.18 (November 29 Low), a break below could take it lower 112.66 (October 23 Low),

GBP/USD: Sterling declined, halting a 2-day winning streak amid signs that the British parliament was headed towards deadlock over Prime Minister Theresa May's Brexit deal. The major traded 0.2 percent down at 1.2630, having hit a low of 1.2476 on Wednesday; it’s lowest since mid-April 2017. FxWirePro's Hourly Sterling Strength Index stood at 130.39 (Highly Bullish) 0500 GMT. Investors’ attention will remain on the U.S. fundamental drivers, amid a lack of economic data from the UK docket. Immediate resistance is located at 1.2700, a break above could take it near 1.2754. On the downside, support is seen at 1.2560, a break below targets 1.2515. Against the euro, the pound was trading 0.2 percent down at 89.93 pence, having hit a low of 90.87 on Monday, it’s lowest since August 29.

AUD/USD: The Australian dollar tumbled to a 5-day low as renewed fears about a global growth slowdown and downbeat economic data from China dented investor risk-sentiment. The Aussie trades 0.5 percent down at 0.7191, having hit a low of 0.7179 earlier; it’s lowest since December 10. FxWirePro's Hourly Aussie Strength Index stood at -152.76 (Highly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7164 (November 13 Low), a break below targets 0.7141 (September 17 Low). On the upside, resistance is located at 0.7268 (November 22 High), a break above could take it near 0.7325 (November 19 High).

NZD/USD: The New Zealand dollar plunged to an over 2-week low trough on China's set of weak economic data and news the Reserve Bank of New Zealand was considering almost doubling the capital requirement for the country's banks. The Kiwi trades 0.8 percent down at 0.6798, having touched a low of 0.6790 earlier, its lowest level Nov 28. FxWirePro's Hourly Kiwi Strength Index was at -104.84 (Highly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6939 (December 3 High), a break above could take it near 0.6976 (June 15 High). On the downside, support is seen at 0.6816 (November 9 Low), a break below could drag it below 0.6753 (November 27 Low).

Equities Recap

Asian shares eased after weaker-than-expected Chinese data stoked fresh worries over the wider impact of a yet unresolved U.S.-China trade dispute.

MSCI's broadest index of Asia-Pacific shares outside Japan tumbled 1.4 percent.

Tokyo's Nikkei declined 2.1 percent to 21,358.63 points, Australia's S&P/ASX 200 index slumped 1.1 percent to 5,602.00 points and South Korea's KOSPI plunged 1.2 percent to 2,069.58 points.

Shanghai composite index fell 1.2 percent to 2,601.89 points, while CSI300 index traded 1.5 percent down at 3,172.58 points.

Hong Kong’s Hang Seng traded 1.7 percent lower at 26,072.06 points. Taiwan shares shed 0.9 percent to 9,774.16 points.

Commodities Recap

Crude oil prices declined by more than 1 percent on concerns that demand may decline amid slowing economic growth, however, expectations for producer supply cuts supported prices. International benchmark Brent crude was trading 1.0 percent down at $61.02 per barrel by 0509 GMT, having hit a high of $63.67 last week, its highest since November 22. U.S. West Texas Intermediate was trading 1.01 percent down at $52.35 a barrel, after rising as high as $54.20 last week, its highest since the December 5.

Gold prices consolidated within narrow ranges, amid uncertainty around the Federal Reserve's policy outlook for next year. Spot gold traded flat at $1,241.02 per ounce by 0513 GMT, having touched a high of $1,250.46 on Monday, its highest level since July 11. U.S. gold futures were down 0.1 percent at $1,246 per ounce.

Treasures Recap

The Australian government bonds gained across the curve during Asian session as investors remain cautious ahead of any breakthrough in U.S.-China trade deal. Global equity and bond markets had a mixed performance overnight. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, fell 2 basis points to 2.458 percent, the yield on the long-term 30-year bond also dipped 2-1/2 basis points to 2.984 percent and the yield on short-term 2-year down 1-1/2 basis points to 1.993 percent.

The New Zealand government bonds gained, sending yields down about 3 basis points across the curve.

The Canadian government bond prices were mixed across a steeper yield curve in sympathy with U.S. Treasuries. The 10-year fell 10 Canadian cents to yield 2.146 percent. Last Thursday, the 10-year yield touched its lowest in nearly one year at 2.026 percent.

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June 18 13:00 UTC Released

RUPPI MM

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1.8 %

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0.5 %

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8.6 %

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10.7 %

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-1541 %

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