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Asia Roundup: Aussie eases as business conditions deteriorate; greenback rebounds on upbeat retail sales, Asian shares rally as risk appetite improves - Tuesday, March 12th, 2019

Market Roundup

  • Last chance? Theresa May wins Brexit assurances from EU on eve of crucial vote
     
  • Doomed with Democrats, Trump's budget boosts Pentagon, targets safety net
     
  • 'Absurd' to say Trump unreliable trade negotiator with China -White House
     
  • China's economy shows improving trend in Jan-Feb - stats bureau chief
     
  • Australia Jan Housing Finance,-2.6%, -2.0% f'cast, -6.1% prev
     
  • Australia Feb NAB Business Confidence, 2, 4 prev
     
  • Australia Feb NAB Business Conditions, 4, 7 prev
     

Economic Data Ahead

  • (0430 ET/0930 GMT) Great Britain Jan GDP Est 3M/3M, 0.2% f'cast, 0.2% prev
     
  • (0430 ET/0930 GMT) Great Britain Jan GDP Estimate MM, 0.2% f'cast, -0.4% prev
     
  • (0430 ET/0930 GMT) Great Britain Jan GDP Estimate YY, 1.2% f'cast, 1.0% prev
     
  • (0430 ET/0930 GMT) Great Britain Jan Industrial Output MM, 0.2% f'cast, -0.5% prev
     
  • (0430 ET/0930 GMT) Great Britain Jan Industrial Output YY, -1.3% f'cast, -0.9% prev
     
  • (0430 ET/0930 GMT) Great Britain Jan Manufacturing Output MM, 0.2% f'cast, -0.7% prev
     
  • (0430 ET/0930 GMT) Great Britain Jan Manufacturing Output YY, -1.9% f'cast, -2.1% prev
     
  • (0430 ET/0930 GMT) Great Britain Jan Goods Trade Balance GBP, -12.20 bln f'cast, -12.10 bln prev

Key Events Ahead

  • N/A ECB's Luis de Guindos participates in ECOFIN meeting in Brussels
     
  • N/A EU Economic and Financial Affairs Council meeting in Brussels
     
  • (0345 ET/0845 GMT) ECB's Andrea Enria participates in panel discussion in Basel
     
  • (0430 ET/0930 GMT) BoE publishes Record of the Financial Policy Committee meeting held on Feb. 26, 2019 in London
     
  • (0545 ET/1045 GMT) ECB board member Sabine Lautenschlager participates in panel discussion in Basel
     
  • (0745 ET/1245 GMT) Federal Reserve Governor Lael Brainard speaks in Washington
     

FX Beat

DXY: The dollar index surged as U.S. retail sales rose modestly in January after a December drop that was even larger than initially estimated.  The greenback against a basket of currencies traded 0.2 percent up at 97.10, having touched a high of 97.71 on Thursday, its highest since December. FxWirePro's Hourly Dollar Strength Index stood at -20.90 (Neutral) by 0400 GMT.

EUR/USD: The euro rose, extending gains for the third straight session, after the chairman of euro zone finance ministers Mario Centeno said that a future eurozone budget should support structural reforms and investment in eurozone countries with grants and loans. The European currency traded 0.1 percent up at 1.1258, having touched a low of 1.1176 on Thursday, its lowest since June 2017. FxWirePro's Hourly Euro Strength Index stood at 14.44 (Neutral) by 0400 GMT. Investors’ attention will remain on ECB Lautenschlager speech, ahead of the U.S. consumer price index and Fed Brainard's speech. Immediate resistance is located at 1.1298 (50.0% retracement of 1.1176 and 1.1496), a break above targets 1.1371 (61.8% retracement). On the downside, support is seen at 1.1200, a break below could drag it till 1.1176 (March 7 Low).

USD/JPY: The dollar rose after data showed U.S. retail sales rose modestly in January, boosted by an increase in purchases of building materials and discretionary spending that eased some fears about an economic slowdown. The major was trading 0.2 percent down at 111.08, having hit a low of 110.74 on Friday, its lowest since February 28. FxWirePro's Hourly Yen Strength Index stood at -113.97 (Highly Bearish) by 0400 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of U.S. consumer price index and Fed Brainard's speech. Immediate resistance is located at 111.65 (Mar. 8 High), a break above targets 112.13 (Mar. 5 High). On the downside, support is seen at 110.66 (Feb.28 Low), a break below could take it lower at 110.35 (Feb.27 Low).

GBP/USD: Sterling rallied to a near 2-week peak after the European Commission agreed to amendments to the UK's Brexit deal. On Monday, senior minister David Lidington stated that Prime Minister Theresa May had clinched changes to her Brexit agreement in a bid to win support before it goes to a vote today. The major traded 0.4 percent up at 1.3205, having hit a low of 1.2960 on Monday; it’s lowest since Feb.19. FxWirePro's Hourly Sterling Strength Index stood at 72.07 (Bullish) 0400 GMT. Investors’ attention will remain on UK consumer inflation expectations, industrial and manufacturing production, trade balance, goods trade balance and UK parliamentary vote on Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3319 (Feb. 28 High), a break above could take it near 1.3350 (Feb. 27 High). On the downside, support is seen at 1.3068 (Mar. 7 Low), a break below targets 1.2989 (Mar. 11 Low). Against the euro, the pound was trading 0.4 percent up at 85.17 pence, having hit a high of 84.74 earlier, it’s highest since May 2017.

AUD/USD: The Australian dollar trimmed gains after data showed domestic business conditions eased 3 points to +4 in February, on falls in profitability and sales, while business confidence fell 2 points to +2. Investors now await RBNZ's deputy governor Guy Debelle speech on the economy and climate change later in the day. The Aussie trades 0.05 percent down at 0.7063, having hit a low of 0.7003 on Friday, it’s lowest since Jan. 4. FxWirePro's Hourly Aussie Strength Index stood at 48.39 (Neutral) by 0400 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases.  Immediate support is seen at 0.6993 (Jan.4 Low), a break below targets 0.6965. On the upside, resistance is located at 0.7092 (Mar. 6 High), a break above could take it near 0.7150 (Feb. 22 High).

NZD/USD: The New Zealand dollar rallied to a 1-1/2 week peak, as investor risk appetite improved. The Kiwi trades 0.2 percent up at 0.6841, having touched a high of 0.6846, its highest level Feb. 28. FxWirePro's Hourly Kiwi Strength Index was at 93.75 (Slightly Bullish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6853 (Feb. 22 High, a break above could take it near 0.6901 (Feb. 27 High). On the downside, support is seen at 0.6757 (Feb. 22 Low), a break below could drag it below 0.6706 (Feb. 22 Low)

Equities Recap

Asian shares advanced after the European Commission agreed to changes in a Brexit deal ahead of a vote in the British parliament on a separation agreement.

MSCI's broadest index of Asia-Pacific shares outside Japan traded rallied 1.08 percent

Tokyo's Nikkei gained 1.8 percent to 21,503.69 points, Australia's S&P/ASX 200 index eased 0.1 percent to 6,174.80 points and South Korea's KOSPI rose 0.9 percent to 2,157.73 points.

Shanghai composite index surged 0.3 percent to 3,036.51 points, while CSI300 index traded 0.05 percent up at 3,731.91 points.

Hong Kong’s Hang Seng traded 1.1 percent higher at 28,809.99 points. Taiwan shares added 0.9 percent to 10,343.33 points

Commodities Recap

Crude oil prices surged, extending previous session gains, boosted by healthy demand and output cuts led by producer cartel OPEC. International benchmark Brent crude was trading 0.4 percent up at $66.82 per barrel by 0429 GMT, having hit a low of $63.99 on Friday, its lowest since Feb. 14. U.S. West Texas Intermediate was trading 0.6 percent higher at $57.06 a barrel, after falling as low as $54.50 on Friday, its lowest since the February 15.

Gold prices rose, reversing some of its previous session losses, amid slowing global economic growth and uncertainty about the outlook for trade negotiations between China and the United States. Spot gold was trading 0.2 percent up at $1,296.33 per ounce by 0440 GMT, having touched a high of $1,300.63 on Friday, its highest since March 1. U.S. gold futures were up 0.1 percent at $1,292.90 an ounce.

Treasuries Recap

The U.S. benchmark 10-year Treasury notes were at 2.6645 percent compared with its U.S. close of 2.641 percent on Monday, while the two-year yield stood at 2.4998 percent.

The Japanese government bond prices slipped, with the benchmark 10-year JGB yield rising 0.5 basis points to minus 0.035 percent. The 20-year yield advanced 1 basis point to 0.405 percent while the 30-year yield rose 0.5 basis points to 0.585 percent. Ten-year JGB futures gained 0.03 points to 152.81 yen, the five-year yield was unchanged at minus 0.160 percent.

The Australian government bond futures eased slightly, with the three-year bond contract off 1.5 ticks at 98.375. The 10-year contract dipped 1 tick to 97.9575.

The yields on New Zealand government bonds were up around 1 basis point.

The Canadian government bond prices were mixed across a flatter yield curve, with the two-year down 0.5 Canadian cent to yield 1.656 percent and the 10-year rising 6 Canadian cents to yield 1.758 percent. The gap between Canada's 10-year yield and its U.S. equivalent widened by 2.5 basis points to a spread of 88.5 basis points in favor of the U.S. bond, its widest since December 2015.

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July 2 15:00 UTC Released

DKCurrency Reserves

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449.6 Stale

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451.7 Stale

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USISM NY Biz Conditions

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50 %

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48.6 %

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