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Asia Roundup: Aussie off multi-month lows, dollar steadies against yen ahead of BoJ monetary policy meeting, Asian shares gain - Monday, October 30th, 2017

Market Roundup

  • Hundreds of thousands march for unified Spain, poll shows depths of division
     
  • Trump tax overhaul under intensifying fire as Congress readies bill
     
  • U.S. special counsel's Russia probe entering new phase with first charges
     
  • Expulsion of Australian ministers cast doubt over more than 100 govt decisions-opposition Labor
     
  • New Zealand PM wants foreign home ownership ban finalized before APEC meeting
     
  • Japan Sept Retail Sales y/y, 2.2% vs 1.7%, rvsd 1.8%, f'cast 2.5%
     
  • Kuroda looks favored to get second term as BoJ chief – Nikkei
     
  • China Oct factory growth seen easing slightly as smog war begins - Rtrs preview
     
  • China benchmark treasury yields jump to 2-year high despite hefty PBOC injections
     
  • UK government should drop budget surplus promise, says IFS
     
  • ECB's Coeure hopes bond-buying won't be extended again: paper
     
  • Merkel, party leaders meet to rev up German coalition talks -media
     
  • Germany to confirm size of expected budget surplus next month
     
  • SNB to remain easy, Vice Chair Zurbruegg defends negative rates, FX action
     
  • U.S. dollar net shorts fall to lowest since Aug 1 -CFTC

Economic Data Ahead

  • (0300 ET/0700 GMT) Germany Sept Retail Sales m/m, y/y Real, 0.7%, 3.0% eyed, last -0.4%, 2.8%
     
  • (0530 ET/0930 GMT) Great Britain Sept BOE Consumer Credit, 1.5000bln eyed, last 1.583bln
     
  • (0530 ET/0930 GMT) Great Britain Sept Mortgage Approvals, 66.050k eyed, last 66.580k
     
  • (0600 ET/1000 GMT) EZ Oct Consumer Confid Final -1.0 eyed, last -1.0

  • (0600 ET/1000 GMT) EZ Oct Economic Sentiment 113.4 eyed, last 113.0
     
  • (0900 ET/1300 GMT) Germany Oct CPI Prelim m/m, y/y, 0.1%, 1.7% eyed, last 0.1%, 1.8%

Key Events Ahead

  • N/A UK DMO 0.125% 2048 index-linked Gilt syndication via BNPP, GS, MS, UBS
     
  • N/A Bank of Japan holds monetary policy meeting – Tokyo

FX Beat

DXY: The dollar held firm near a 3-month high on expectations that President Donald Trump is leaning toward nominating Fed Reserve Governor Jerome Powell to be the next head of the U.S. central bank.  The greenback against a basket of currencies traded flat at 94.79, having touched a high of 95.15 on Friday, its highest since July. 20. FxWirePro's Hourly Dollar Strength Index stood at 55.67 (Bullish) by 0500 GMT.

EUR/USD: The euro steadied above the 1.1600 handle after falling to a 3-month low in the prior session amid political developments around Spain. Moreover, the European Central Bank’s dovish taper and upbeat United States Q3 GDP, which almost cemented a December Fed rate hike continued to undermine the bid tone around the major. The European currency traded 0.1 percent up at 1.1614, having touched a low of 1.1574 on Friday, its lowest since Jul. 20. FxWirePro's Hourly Euro Strength Index stood at -111.96 (Highly Bearish) by 0400 GMT. Investors’ attention will remain on Eurozone economic sentiment indicator, ahead of U.S. personal consumption expenditure price index, personal income, and spending data. Immediate resistance is located at 1.1632 (78.6% retracement of 1.1837 and 1.1674, a break above targets 1.1678 (61.8% retrace). On the downside, support is seen at 1.1574 (Previous Session Low), a break below could drag it lower 1.1550.

USD/JPY: The dollar opened up on a bullish gap after falling from a near 4-month high the prior session as the Federal Reserve will hold a two-day policy meeting on Tuesday and Wednesday at which it is expected to leave rates unchanged. The major was trading flat at 113.64, having hit a high of 114.45 on Friday, its highest since Jul. 11. FxWirePro's Hourly Yen Strength Index stood at 77.29 (Slightly Bullish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. personal consumption expenditure price index, personal income and spending data for further clues on the pair. Immediate resistance is located at 114.00, a break above targets 114.40. On the downside, support is seen at 113.34 (Oct. 26 Low), a break below could take it near 112.85 (21-DMA).

GBP/USD: Sterling rose after slumping to a 3-month low in the previous session on growing uncertainty over prospects for the British economy that dampened expectations that a likely Bank of England rate hike next week would signal the start of a sustained tightening cycle. The major traded 0.2 percent up at 1.3143, having hit a low of 1.3070 on Friday, its lowest since Oct. 6. FxWirePro's Hourly Sterling Strength Index stood at 6.14 (Neutral) by 0400 GMT. Investors’ focus will remain on UK consumer credit and mortgage approval data, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3173 (5-DMA), a break above could take it near 1.3204 (21-DMA). On the downside, support is seen at 1.3100, a break below targets 1.3070. Against the euro, the pound was trading flat at 88.36 pence, having hit a high of 88.25 pence on Friday, its highest since Oct. 3.

AUD/USD: The Australian dollar edged up, extending previous session gains, however, the upside remains capped as the Australian PM Turnbull lost majority after the high court ruled that Deputy PM Barnaby Joyce is ineligible to remain in parliament. The Aussie trades flat at 0.7674, having hit a low of 0.7624 on Friday, it’s lowest since Jul. 11. FxWirePro's Hourly Aussie Strength Index stood at -18.53 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7624 (Previous Session Low), a break below targets 0.7600. On the upside, resistance is located at 0.7682 (78.6% retracement of 0.7883 and 0.7625), a break above could take it near 0.7723 (5-DMA).

NZD/USD: The New Zealand dollar declined, reversing previous session gains after Prime Minister Jacinda Ardern stated that she would like to finalize the details of a ban on foreigners buying established homes before a key trade deal meeting next week. The Kiwi trades 0.4 percent down at 0.6844, having touched a low of 0.6818 on Friday, its lowest level since May 11. FxWirePro's Hourly Kiwi Strength Index was at -65.01 (Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6903, a break above could take it near 0.6970. On the downside, support is seen at 0.6800, a break below could drag it till 0.6780.

Equities Recap

Asian shares gained, underpinned by a rise in technology stocks, while the euro nursed losses after the European Central Bank and unrest in Spain's Catalonia led it to post its worst week this year.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.5 percent.

Tokyo's Nikkei fell 0.05 percent to 22,002.72 points, Australia's S&P/ASX 200 index rose 0.3 percent to 5,919.10 points and South Korea's KOSPI advanced 0.2 percent to 2,500.17 points.

Shanghai composite index slumped 1.0 percent to 3,384.25 points, while CSI300 index was trading 0.7 percent down at 3,992.39 points.

Hong Kong’s Hang Seng was trading 0.1 percent lower at 28,411.95 points. Taiwan shares added 0.5 percent to 10,756.87 points.

Commodities Recap

Crude oil prices declined after rising to multi-month highs earlier in the session on the back of expectations that an OPEC-led production cut due to expire next March would be extended. International benchmark Brent crude was trading 0.2 percent down at $60.38 per barrel by 0420 GMT, having hit a high of $60.73 earlier, its highest since Jul. 6. U.S. West Texas Intermediate was trading 0.3 percent lower at $53.91 a barrel, after rising as high as $54.61, its highest since Mar. 1.

Gold prices edged down, after rebounding from 3-week lows in the previous session on the back of Catalonian parliament's independence declaration from Spain. Spot gold was up 0.1 percent at $1,271.61 an ounce by 0433, having touched its lowest since Oct. 6 at $1266.67. U.S. gold futures for December delivery settled up $2.20 at $1,271.80 per ounce.

Treasuries Recap

The 10-year U.S Treasury yield stood at 2.402 percent lower by 0.025 bps, while 5-year yield was 0.023 bps down at 2.019 percent.

The Japanese bonds traded a little higher as investors awaited the Bank of Japan’s second last two-day monetary policy meeting scheduled to held October 30-31. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell nearly 1 basis point to 0.065 percent, the yield on long-term 30-year declined nearly ½ basis point to 0.873 percent and the yield on short-term 2-year slid ½ basis points to -0.153 percent.

The Australian bonds gained following firmness in the U.S. Treasuries as speculations increased over the appointment of less hawkish Federal Reserve Governor Jerome Powell.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 6-1/2 basis points to 2.726 percent, the yield on the long-term 30-year note also declined 7 basis points to 3.490 percent and the yield on short-term 2-year slid 3 basis points to 1.854 percent.

The New Zealand long-term bonds ended flat as investors remained sidelined in any major trading activity amid lack of sufficient economic data through the day. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, remained flat at 3.00 percent, the yield on the 20-year note rose 1/2 basis point to 3.55 percent while the yield on short-term 2-year slumped 4-1/2 basis points to 2.03 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 35393539m

ITExport Prices*

Actual

Forecast

Previous

111 %

November 27 09:00 UTC 35393539m

ITImport Prices*

Actual

Forecast

Previous

116.1 %

November 27 14:00 UTC 38393839m

MXTrade Balance, $*

Actual

Forecast

Previous

-1.886 Bln USD

November 27 14:00 UTC 38393839m

MXTrade Balance SA*

Actual

Forecast

Previous

-1.559 Bln USD

November 27 15:30 UTC 39293929m

USDallas Fed mfg bus index

Actual

Forecast

Previous

27.6

November 27 21:00 UTC 42594259m

KRBOK Manufacturing BSI*

Actual

Forecast

Previous

87 Bln BRL

November 28 00:00 UTC 44394439m

BRCentral Govt Balance

Actual

Forecast

Previous

-22.725 Bln BRL

November 28 07:00 UTC 48594859m

DEGDP Growth QQ* Advance

Actual

Forecast

Previous

10.7 %

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