Asia Roundup: Aussie gains following upbeat Chinese industry survey, dollar rises after upward revision to U.S. GDP, markets eye Eurozone prelim CPI figures - Friday, March 31st, 2017

Market Roundup

• Trump looking at new ways to go after countries that game their ccys - CNBC.
   
• US CommSec Ross – To trigger 90-day NAFTA consultation period before Congressional recess, problem with WTO rule allowing unequal tax treatment of exports, TPP proviso Canada-Mexico agreed on should be kept, no position yet on border-adjustable tax – CNBC.
   
• Trump to order trade imbalance fixes, product-by-product analysis, Japan may be targeted – Kyodo.
   
• Trump – Meeting with China Xi will be very difficult, can no longer have massive trade deficits and job losses – Twitter.
   
• NY Fed Dudley – Gradual rate hikes appropriate, risks to growth-inflation may be shifting to upside, fiscal policy likely more accommodative, eyeing gradual-predictable tapering, won’t actively sell MBS – Reuters.
   
• Japan fund managers up stocks in March albeit at slower pace – Reuters poll.
   
• Japan Feb industrial output +2.0% m/m, +1.2% forecast, best pace since June ’16, March forecast at -2.0% (prev estimate -5.0%), April forecast at +8.3%.
   
• Japan Feb core CPI +0.2% y/y, as forecast, best pace since April ’15 (not saying much), ex-food/energy +0.1% y/y, Tokyo March core CPI -0.4% y/y, -0.2% forecast, ex-food/energy -0.2%.
   
• Japan Feb unemployment 2.8%, lowest since June ’94, 3.0% forecast, Jan 3.0%,  jobs-applicants ratio 1.43, as forecast, unchanged on month.
   
• Japan Feb household spending +2.5% m/m, -3.8% y/y, +0.4% and -1.7% forecast.
   
• Japan Feb housing starts -2.6% y/y, -1.1% forecast, Jan +12.8%, construction orders +1.8% to Y6.449 trln, Jan +1.1%, large contractors +5.7%.
   
• Japan DIC contracts with BT-MUFJ to borrow in nine currencies – Nikkei.
   
• China March official mfg PMI 51.8, best since April ’12, 51.6 forecast, Feb 51.6.
   
• China March official services PMI 55.1, best since May ’14, Feb 54.2.
   
• China’s top two lenders see light at end of bad-loan tunnel – Nikkei.
   
• Shanghai bourse to improve repo rate calculation to reduce volatility.
   
• Foreign CB US debt holdings -$4.832 bln to $3.207 trln March 29 wk, Treasury holdings -$3.713 bln to $2.883 trln, agencies -$1.689 bln to $261.066 bln.
   
• NY Fed – Swaps with for-CBs $1.007bln Mar 29 wk, ECB $1.005 bln, rest BoJ.
• Lipper – Investors tip-toe back into US stock funds, add $5.6 bln.
   
• UK March GfK consumer confidence index -6, steady, -7 forecast.
• RBA to keep rates steady at April meeting – Reuters poll.
   
• Australia Feb priv-sector credit +0.3% m/m, housing +0.6%, Jan +0.2%, +0.5%.
   
• Australia bank regulator (APRA) clamps down on interest-only mortgage loans.
   
• New Zealand March ANZ business confidence 11.3%, own activity 38.8%, Feb 16.6%, 37.2%.
• New Zealand Q1 Westpac employee confidence index 109.9, Q4 ’16 112.7.
  ​

Economic Data Ahead

• (0245 ET/0645 GMT) France Mar HICP – flash, +1.4% y/y forecast; last +1.4%.
   
• (0245 ET/0645 GMT) France Feb producer prices; last +0.7% m/m.
   
• (0245 ET/0645 GMT) France Feb consumer spending, +0.1% m/m forecast; last +0.6%.
   
• (0300 ET/0700 GMT) Spain Feb retail sales; last +0.1% y/y.
• (0400 ET/0800 GMT) Spain Jan current account balance; last E2.4 bln surplus.
   
• (0400 ET/0800 GMT) Germany Mar unemployment, 2.7 mln nsa forecast; last 2.76 mln nsa, 2.59 mln sa.
   
• (0400 ET/0800 GMT) Germany Mar unemployment, -10k, 5.9% forecast; last -14k, 5.9%.
   
• (0400 ET/0800 GMT) Norway Mar unemployment, 3.0% forecast; last 3.1%.
   
• (0430 ET/0830 GMT) Great Britain Q4  GDP – revised, +0.7% q/q, +2.0% y/y forecast; prelim +0.7%, +2.0%.
   
• (0430 ET/0830 GMT) Great Britain Q4  c/a balance, GBP16 bln deficit forecast; last GBP25.49 bln deficit.
   
• (0500 ET/0900 GMT) Eurozone Mar inflation – flash, +1.8% y/y forecast; last +2.0%.
   
• (0500 ET/0900 GMT) Eurozone Mar – ex-food/energy,  +0.9% y/y forecast; last +0.9%.
   
• (0500 ET/0900 GMT) Italy Mar HICP – flash, +1.6% y/y forecast; last +1.6%.
   
• (0600 ET/1000 GMT) Italy Feb producer prices; last +1.0% m/m, +2.5% y/y.
   
• (0830 ET/1230 GMT) United States Feb personal income, +0.4% m/m forecast; last +0.4%.
   
• (0830 ET/1230 GMT) United States Feb personal consumption, +0.2% m/m forecast; last +0.2%, real -0.3%.
   
• (0830 ET/1230 GMT) United States Feb core PCE price index, +0.2% m/m forecast; last +0.3% m/m, +1.7% y/y.
   
• (0830 ET/1230 GMT) United States Feb overall PCE price index; last +0.4% m/m, +1.9% y/y.
   
• (0900 ET/1300 GMT) United States Feb Dallas Fed PCE; last +2.4%.
   
• (0945 ET/1345 GMT) United States Mar Chicago PMI, 56.9 forecast; last 57.4.
   
• (1000 ET/1400 GMT) United States Mar U.Mich sentiment index – final, 97.6 forecast; prelim 97.6.
  ​

Key Events Ahead

• N/A   Buba Dombret speaks in Bochum, Germany.
   
• N/A   UK government white paper on the Great Repeal Bill.
   
• N/A   EU Tusk presents quidelines for Brexit negotiations.
   
• (0400 ET/0800 GMT) Norges Bank April currency operations, March NOK850 mln sales/day.
   
• (0600 ET/1000 GMT) ECB Coeure presentation in Brussels, discussion to follow.
   
• (0600 ET/1000 GMT) UK DMO GBP0.5/0.5/1.0 bln 1/3/6-month treasury bill auctions.
   
• (0650 ET/1050 GMT) ECB Angeloni speaks at Bologna, Italy conference.
   
• (0900 ET/1300 GMT) NY Fed Dudley Bloomberg TV interview.
   
• (1000 ET/1400 GMT) Minny Fed Kashkari participates in Q&A in Minneapolis.
   
• (1030 ET/1430 GMT) St Louis Fed Bullard interview at New York forum.
   
• (1700 ET/2100 GMT) BoE Haldane speaks in San Francisco.
   

FX Beat

DXY: The dollar gained across the board on the back of upbeat U.S. economic news and expectations of a tighter pace of monetary tightening by the Fed. The greenback against a basket of currencies traded 0.1 percent up at 100.55, having hit a high of 100.60 on Thursday, its highest since Mar. 16. FxWirePro's Hourly Dollar Strength Index stood at 64.99 (Bullish) by 0500 GMT.

EUR/USD: The euro steadied after falling to a 2-week low in the previous session as the U.S. dollar gained momentum across the board. The European currency traded flat at 1.0675, having touched a low of 1.0671 on Wednesday, its lowest since Mar. 15. FxWirePro's Hourly Euro Strength Index stood at -123.58 (Highly Bearish) by 0400 GMT. Investors now await Eurozone preliminary consumer price index figures, ahead of U.S. personal consumption expenditure, Chicago Purchasing Managers index data. Immediate resistance is located at 1.0720 (78.6% retrace of 1.0905 and 1.0671), a break above targets 1.0760 (61.8% retrace). On the downside, support is seen at 1.0650, a break below could drag it near 1.0600.

USD/JPY: The dollar rose above the 112.00 handle to a 10-day high as upbeat Chinese PMI reports boosted the overall market sentiment, dampening the demand around the safe-haven yen. Moreover, the recovery in the major was also supported by the release of a series of mixed Japanese economic data and an upward revision to U.S. GDP. The pair traded 0.13 percent up at 112.06, hovering toward a high of 112.19 touched earlier, its highest since Mar. 21. FxWirePro's Hourly Yen Strength Index stood at -44.47 (Neutral) by 0400 GMT. Investors’ will continue to track price action in the treasury yields, ahead of U.S. core PCE price index, consumer sentiment figures, and FOMC member Dudley and Kahskari’s speech. Immediate resistance is located at 112.50, a break above targets 112.94 (21-DMA). On the downside, support is seen at 111.21 (5-DMA), a break below could take it near 110.75.

GBP/USD: Sterling rose, extending previous session gains as accelerating inflation renewed expectations that the Bank of England is moving towards tightening policy. The major trades 0.1 percent higher at 1.2482, drifting away from a low of 1.2376 hit on Wednesday, its lowest since Mar. 21. FxWirePro's Hourly Sterling Strength Index stood at -14.01 (Neutral) by 0400 GMT. Investors’ attention will remain on UK gross domestic product figures ahead of U.S. economic data. Immediate resistance is located at 1.2524 (Previous Session High), a break above could take it near 1.2570 (Feb. 24 High). On the downside, support is seen at 1.2431 (61.8% retrace 1.2375 and 1.2402), a break below targets 1.2400. Against the euro, the pound traded 0.15 percent higher at 85.47 pence, having hit a high of 85.43 earlier, its highest since Mar 1.

AUD/USD; The Australian dollar gained, reversing some of its previous session losses, as a positive survey on Chinese industry boosted the bid tone around the Aussie. Investors now await the Reserve Bank of Australia’s (RBA) monetary policy meeting, scheduled on April 4 for further direction on the pair. The major trades 0.06 percent up at 0.7645, having hit a high of 0.7679 on Thursday, it’s highest since Mar. 23. FxWirePro's Hourly Aussie Strength Index stood at 102.47 (Highly Bullish) by 0500 GMT. Investors will continue to track broad based market sentiment, ahead of U.S. economic data and FOMC members’ speeches. Immediate support is seen at 0.7619 (21-DMA), a break below targets 0.7600. On the upside, resistance is located at 0.7680 (Previous Session High), a break above could take it near 0.7720.

NZD/USD: The New Zealand dollar tumbled to a 2-week low below the 0.7000 handle as the greenback rallied versus its major peers amid impressive U.S. economic data and rising expectations of a tighter pace of monetary tightening by the Fed. The major failed to benefit from upbeat Chinese services and manufacturing PMI reports, which showed that the manufacturing gauge touched a five-year high. The Kiwi trades 0.06 percent down at 0.6990, having touched a low of 0.6981earlier, it’s weakest since Mar. 17. FxWirePro's Hourly Kiwi Strength Index was at -54.19 (Bearish) by 0500 GMT. Investors’ will continue to track overall market sentiment, ahead of U.S. macro fundamental drivers and Fed speeches. Immediate resistance is located at 0.7050, a break above could take it over 0.7070. On the downside, support is seen at 0.6968 (Mar. 16 Low), a break below could drag it lower 0.6950.

Equities Recap

Asian shares traded in a volatile market, while the dollar gained on signs of strong U.S. economic growth and renewed optimism of tighter pace of monetary tightening by the Federal Reserve.

MSCI's broadest index of Asia-Pacific shares outside Japan retreated 0.15 percent.

Tokyo's Nikkei fell 0.18 percent to 19,028.15 points, Australia's S&P/ASX 200 index eased 0.28 percent to 5,889.70 points and South Korea's KOSPI was trading 0.08 percent down at 2,162.92 points.

Shanghai composite index edged up 0.25 percent to 3,218.29 points, while CSI300 index was trading 0.45 percent higher at 3,452.33 points.

Hong Kong’s Hang Seng was trading 0.64 percent lower at 24,145.24 points. Taiwan shares shed 0.4 percent at 9,811.52 points.

Commodities Recap

Crude oil prices eased after rising to a 3-week high the day before as traders booked profits following three days of straight gains. International benchmark Brent crude was trading 0.4 percent down at $52.83 per barrel by 0406 GMT, having hit a high of $53.13 the prior day, its strongest since Mar. 9. U.S. West Texas Intermediate crude fell 0.3 percent to $50.15 a barrel, after rising as high as $50.45 on Thursday, its highest since Mar. 9.

Gold prices fell to a 10-day low as the dollar hovered around two-week highs on positive U.S. economic data, however, lingering uncertainty over upcoming elections in Europe and Britain's exit from the European Union extended support. Spot gold edged down 0.1 percent at $1,241.19 per ounce at 0411 GMT, having hit a low of $1,239.53 earlier, its lowest its Mar. 21. U.S. gold futures were down 0.3 percent at $1,241.3.

Treasuries Recap

The 10-year U.S treasury yield stood at 2.412 percent lower by 0.005 bps, while 5-year yield was 0.002 bps down at 1.959 percent.

The Australian bonds traded flat on the last day of the week, tracking similar movement in the U.S. Treasuries. The yield on the benchmark 10-year Treasury note hovered around 2.70 percent, the yield on 15-year note traded flat at 3.08 percent and the yield on short-term 2-year also remained steady at 1.76 percent.

The New Zealand bonds closed a tad higher at the time of closing, following a drop in the country’s business confidence. The yield on the benchmark 10-year bond fell 1 basis point to 3.21 percent at the time of closing, the yield on 7-year note also slipped nearly 1 basis point to 2.80 percent and the yield on short-term 2-year note also traded 1 basis point lower at 2.16 percent.

The Canadian government bond prices were lower across the yield curve, with the two-year down 4.5 Canadian cents to yield 0.748 percent, its highest since March 24, and the 10-year falling 33 Canadian cents to yield 1.632 percent.