Asia Roundup: Aussie hits 1-week high on upbeat home sales figures, euro eases on ECB headlines, Asian shares near 2-year peak - Thursday, March 30th, 2017

Market Roundup

• BoJ DepGov Iwata – Current policy appropriate, inflation still sub-2%, recovery gaining momentum, however, QQE and yield curve control helping to spur growth, no need to buy US Treasuries, JGB buys sufficient – Reuters.
   
• Japan ChiefCabSec Suga –Monitoring Brexit impact on Japanese firms – Reuters.
   
• MoF flow data week-ended March 25 – Japanese sell net Y294.0 bln foreign stocks, Y151.6 bln bonds, Y19.0 bln bills; foreign investors sell net Y754.3 bln Japanese stocks, Y1.9237 trillion JGBs, Y1.5407 trillion bills.
   
• Japan Feb crude imports -3.2% y/y, LNG +4.8%, total coal -3.9%, Jan -3.3%, +9.6%, unchanged.
   
• Trump laying groundwork to keep big tariffs on Chinese goods - DowJones.
   
• US business loan growth slowdown reflects energy hangover – Goldman Sach.
   
• Mexico’s governors tap investors in China, elsewhere – Reuters.
   
• Latin America may step up bond sales as Trump fears fade – Reuters.
   
• Australia Feb HIA new home sales +0.2% m/m, houses -0.1%, apartments +1.0%.
   
• Australia Dec-Feb job vacancies +1.8% q/q, Sep-Nov +2.5% (prelim +2.2%).
  ​

Economic Data Ahead

• (0300 ET/0700 GMT) Spain Mar HICP – flash, +2.7% y/y forecast; last +3.0%.
   
• (0300 ET/0700 GMT) Switzerland Mar KOF indicator, 106.0 forecast; last 107.2.
   
• (0500 ET/0900 GMT) Eurozone Mar business climate index,            0.86 forecast; last  0.82.
   
• (0500 ET/0900 GMT) Eurozone Mar industrial sentiment index,         1.4 forecast; last   1.3.
   
• (0500 ET/0900 GMT) Eurozone Mar economic sentiment index,         108.3 forecast; last 108.0.
   
• (0500 ET/0900 GMT) Eurozone Mar services sentiment index,          13.9 forecast; last  13.8.
   
• (0500 ET/0900 GMT) Eurozone Mar consumer confidence index – final, -5.0 forecast; flash -5.0.
   
• (0800 ET/1200 GMT) Gerrmany Mar CPI  - flash, +0.4% m/m, +1.8% y/y forecast; last +0.6%, +2.2%.
   
• (0800 ET/1200 GMT) Gerrmany Mar HICP – flash, +0.5% m/m, +1.9% y/y forecast; last +0.7%, +2.2%.
   
• (0830 ET/1230 GMT) United States Q4  GDP – final, +2.0% AR forecast; prelim +1.9%.
   
• (0830 ET/1230 GMT) United States Q4  GDP deflator    – final, +2.0% AR forecast; prelim +2.0%.
   
• (0830 ET/1230 GMT) United States Q4  PCE price index – final, +2.1% AR forecast; prelim +1.9%.
   
• (0830 ET/1230 GMT) United States Q4  - core PCE      - final, +1.2% AR forecast; prelim +1.2%.
   
• (0830 ET/1230 GMT) United States Q4  corporate profits – prelim; last +6.7% AR.
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• (0830 ET/1230 GMT) United States w/e initial jobless claims, 248k forecast; last 261k.
   

Key Events Ahead

• N/A   UK White Paper on Great Repeal Bill.
   
• (0200 ET/0600 GMT) ECB/BdF Villeroy speaks in Paris.
   
• (0300 ET/0700 GMT) ECB Mersch speaks at Frankfurt Europe-US symposium.
   
• (0400 ET/0800 GMT) ECB/Finland CB Liikanen press conference on policy, global economy.
   
• (0515 ET/0915 GMT) ECB/Austria CB Nowotny press conference on policy, economic outlook.
   
• (0600 ET/1000 GMT) Italy E0.5-1/1.75-2.25/2-2.5 bln 0.65/1.2/2.2% 2020/22/27 BTP auctions.
   
• (0600 ET/1000 GMT) Italy E0.5-0.75 bln 2.8% 2067 BTP, E2-2.5 bln 0.256% 2024 FR auctions.
   
• (0745 ET/1145 GMT) Norges Bank DepGov Matsen speaks at Oslo conference.
   
• (0945 ET/1345 GMT) Cleveland Fed Mester speaks at Chicago Fed/DePaul University conference.
   
• (1100 ET/1500 GMT) Dallas Fed Kaplan in Washington, DC US Chamber of Commerce moderated Q&A.
   
• (1115 ET/1515 GMT) SF Fed Williams in New York SPARCC panel discussion.
   
• (1500 ET/1900 GMT) Buba Dombret speaks in Frankfurt, again at 20:30.
   
• (1630 ET/2020 GMT) NY Fed Dudley speaks at University of South Florida dedication.
   
• (1700 ET/2100 GMT) Balkan CB conference in Zagreb.

FX Beat

DXY: The dollar gained versus its major peers as Chicago Fed President Charles Evans' comments were in line with most of his colleagues in supporting further rate hikes this year. The greenback against a basket of currencies traded 0.1 percent up at 100.05, recovering from a low of 98.89 hit on Monday, its lowest since Nov. 11. FxWirePro's Hourly Dollar Strength Index stood at 68.99 (Bullish) by 0500 GMT.

EUR/USD: The euro declined after falling to a 1-week low in the previous session, as the European Central Bank showed no sign of stepping away from monetary easing anytime soon. Moreover, yesterday's positive U.S. data and hawkish Fedspeaks amid higher yields also added to the bids seen around the greenback, which continued to undermine the major. The European currency traded 0.1 percent down at 1.0752, having touched a low of 1.0739 on Wednesday, its lowest since Mar. 21. FxWirePro's Hourly Euro Strength Index stood at -60.41 (Bearish) by 0400 GMT. Investors now await Eurozone sentiment indicator and consumer confidence figures, ahead of Fed officials' speeches and U.S. economic data. Immediate resistance is located at 1.0775 (78.6% retrace of 1.0905 and 1.0739), a break above targets 1.0803 (61.8% retrace). On the downside, support is seen at 1.0718 (Mar 21 High), a break below could drag it near 1.0700.

USD/JPY: The dollar stood tall above the 111.00 handle, as Chicago Fed President Charles Evans' remarks were in line with most of his colleagues in supporting further rate hikes this year. However, negative performance in the Japanese stocks supported safe-haven flow into the yen, which limited the upside in the major.  The pair traded 0.18 percent up at 111.25, hovering away from a low of 110.10 touched on Monday, its lowest since Nov. 18. FxWirePro's Hourly Yen Strength Index stood at -1.17 (Neutral) by 0400 GMT. Investors’ will continue to track overall market sentiment, ahead of U.S. unemployment claims, gross domestic product figures and FOMC members Kaplan and William's speeches. Immediate resistance is located at 111.64 (10-DMA), a break above targets 112.15 (61.8% retracement of 115.50 and 110.10). On the downside, support is seen at 110.50, a break below could take it near 110.00.

GBP/USD: Sterling steadied after tumbling to an 8-day low in the previous session after Prime Minister Theresa May began Britain's formal separation procedure from the European Union. The major trades flat at 1.2437, having hit a low of 1.2376 the day before, its lowest since Mar. 21. FxWirePro's Hourly Sterling Strength Index stood at -27.82 (Neutral) by 0400 GMT. Investors’ will continue to digest Brexit related news ahead of UK consumer confidence. Immediate resistance is located at 1.2487 (5-DMA), a break above could take it near 1.2531 (Mar. 23 High). On the downside, support is seen at 1.2361 (50.0% retrace 1.2108 and 1.2615), a break below targets 1.2201 (61.8% retrace). Against the euro, the pound traded 0.15 percent lower at 86.43 pence, having hit a low of 87.34 the prior session, its lowest since Mar 17.

AUD/USD: The Australian dollar rose to a 1-week high after data showed the economy's HIA new homes sales rebounded 0.2 percent in February from a previous reading of -2.2 percent. However, the major eased from daily highs as the greenback strengthened amid weakness surrounding commodities’ prices. The Aussie trades 0.05 percent down at 0.7663, having hit an early high of 0.7676, it’s highest since Mar. 23. FxWirePro's Hourly Aussie Strength Index stood at 85.05 (Slightly 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 0.7633 (5-DMA), a break below targets 0.7600. On the upside, resistance is located at 0.7690 (Mar-22 High), a break above could take it near 0.7720. 

NZD/USD: The New Zealand dollar continues to consolidate between narrow ranges as divergent monetary policy outlooks between the Fed and RBNZ continued to weigh on market sentiments. The Kiwi trades 0.1 percent down at 0.7025, hovering away from a peak of 0.7090 touched last week, it’s strongest since Mar. 2. FxWirePro's Hourly Kiwi Strength Index was at -44.21 (Neutral) by 0500 GMT. Investors’ will continue to track overall market sentiment, ahead of U.S. unemployment claims, gross domestic product figures, 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 0.6975 (Mar. 17 Low), a break below could drag it near 0.6950.

Equities Recap

Asian shares nudged up to near two years peak, while the greenback gained from fading expectations that the European Central Bank was poised to end its easy policy.

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

Tokyo's Nikkei fell 0.5 percent to 19,117.52 points, Australia's S&P/ASX 200 index rose 0.39 percent to 5,896.60 points and South Korea's KOSPI was trading 0.23 percent down at 2,162.79 points.

Shanghai composite index edged down 1.33 percent to 3,197.97 points, while CSI300 index was trading 1.1 percent lower at 3,426.31 points.

Hong Kong’s Hang Seng was trading 0.50 percent lower at 24,269.19 points. Taiwan shares shed 0.05 percent at 9,851.26 points.

Commodities Recap

Crude oil prices declined after rising to a 2-week high in the previous session as record U.S. crude inventories outweighed a fall in gasoline stocks and disruptions in Libyan supplies. International benchmark Brent crude was trading 0.13 percent down at $52.35 per barrel by 0358 GMT, having hit a high of $52.45 the prior day, its strongest since Mar. 16. U.S. West Texas Intermediate crude fell 0.12 percent to $49.52 a barrel, after rising as high as $49.62 earlier, its highest since Mar. 10.

Gold prices consolidated between narrow ranges, supported by uncertainties on the impact of the Brexit trigger, U.S. policy under President Donald Trump and French elections. Spot gold was down 0.3 percent at $1,249.82 per ounce by 0403 GMT, having hit a high of $1,260.90 on Monday, its highest its Feb. 27.  U.S. gold futures eased 0.2 percent to $1,250.9.

Treasuries Recap

The 10-year U.S treasury yield stood at 2.389 percent higher by 0.002 bps, while 5-year yield was 0.002 bps up at 1.937 percent.

The Australian bonds rebounded as investors await to watch the country’s retail sales during the month of February as well as the Reserve Bank of Australia’s (RBA) monetary policy decision, scheduled to be held next week. The yield on the benchmark 10-year Treasury note slumped 3-1/2 basis points to 2.70 percent, the yield on 15-year note also plunged 3-1/2 basis points to 3.08 percent and the yield on short-term 2-year also traded 1 basis point lower at 1.75 percent.

The New Zealand bonds ended the session on a slightly higher note as investors covered previous short positions amid a session that witnessed data of little economic significance. The yield on the benchmark 10-year bond fell 1 basis point to 3.20 percent at the time of closing, the yield on 7-year note climbed 1/2 basis point to 2.80 percent while the yield on short-term 2-year note also traded 1 basis point lower at 2.15 percent.

The Canadian government bond prices were higher across the yield curve, with the 2-year up 3 Canadian cents to yield 0.725 percent and the 10-year rising 29 Canadian cents to yield 1.593 percent. On Tuesday, the two-year yield hit its lowest in nearly seven weeks at 0.719 percent.