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Asia Roundup: Aussie rebounds on upbeat economic data, dollar hits 2-1/2 week high against yen as U.S. Senate passes tax bill, investors await May-Juncker meeting - Monday, December 4th, 2017

Market Roundup

  • Australia workers earn income boost amid hiring rush
     
  • New Zealand Q3 Business Inventories 0.2%, -0.4% last f' cast 0.1%, -0.5% rvsd
     
  • Australia Nov ANZ Internet & Newspaper job 1.5%, 1.4% last
     
  • Bounce for Australian PM as voters tire of leadership roundabout
     
  • Central banks need to ensure tightening cools froth in financial markets -BIS
     
  • Japan Nov Consumer Confid. Index 44.9, 44.5 last
     
  • Japan may cut corporate tax rate to 20% through incentives – Nikkei
     
  • Japan firms end years-long price freezes – Wall Street Journal
     
  • Enter the 'petro': Venezuela to launch oil-backed cryptocurrency
     
  • Key meeting for PM May as Brexit talks enter decisive phase
     
  • UK factories plan to ramp up investment – EEF
     
  • China should maintain budget deficit ratio around 3 pct - official think tank
     
  • Fed officials fret over yield curve, warn on pace of hikes

  • Trump tweets about Russia probe spark warnings from lawmakers
  • S.Korea, U.S. kick off largest air exercise amid N.Korean warnings
     
  • Pentagon evaluating U.S. West Coast missile defense sites – officials
     
  • McConnell says U.S. government shutdown over DACA 'ridiculous'
     
  • Speculators raise short U.S. dollar bets to largest since late Oct –CFTC
     

Economic Data Ahead

  • (0430 ET/0930 GMT) Great Britain Nov Markit/CIPS Cons PMI f' cast 51.0, 50.8 last
     
  • (0430 ET/0930 GMT) EZ Dec Sentix Index f' cast 33.6, 34.0 last
     
  • (0500 ET/1000 GMT) EZ Oct Producer Prices m/m, y/y, f' cast 0.3%, 2.6%, 0.6%, 2.9% last

Key Events Ahead

  • N/A ECB's Draghi and Coeure participate in a Eurogroup meeting – Brussels
     
  • (0130 ET/0630 GMT) ECB's Galhau speaks at a seminar – Tokyo
     
  • (0700 ET/1200 GMT) Riksbank executive board meeting – Stockholm

FX Beat

DXY: The dollar index rebounded after the U.S. Senate approved a tax overhaul on Saturday, moving Republicans and President Donald Trump a step closer to their goal of slashing taxes for businesses. The greenback against a basket of currencies traded 0.3 percent up at 93.15, having touched a high of 93.51 on Thursday, its highest since Nov. 22. FxWirePro's Hourly Dollar Strength Index stood at -85.93 (Slightly Bullish) by 0500 GMT.

EUR/USD: The euro slumped below the 1.1900 handle, as the greenback gained amid the U.S. tax reform optimism and fading political uncertainty in the U.S. The European currency traded 0.2 percent down at 1.1869, having touched a high of 1.1940 on Friday, its highest since Nov. 27. FxWirePro's Hourly Euro Strength Index stood at 31.53 (Neutral) by 0400 GMT. Investors’ attention will remain on Eurozone Sentix investor confidence and producer price index, ahead of U.S. factory orders and ISM-NY - business conditions index. Immediate resistance is located at 1.131 (Nov. 30 High), a break above targets 1.2000. On the downside, support is seen at 1.1845 (10-DMA), a break below could drag it lower 1.1817 (Nov 29 Low).

USD/JPY: The dollar rallied to a 2-1/2 week peak against the Japanese yen after the U.S. Senate approved a tax overhaul at the weekend. However, the upside in the major remained capped as former national security adviser Michael Flynn was pleaded guilty for lying to the FBI about his contacts with Russia, and agreed to cooperate with prosecutors. The major was trading 0.6 percent up at 112.79, having hit a high of 112.89 earlier, its highest since Nov. 17. FxWirePro's Hourly Yen Strength Index stood at -137.26 (Slightly Bearish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. factory orders and ISM-NY - business conditions index for further momentum. Immediate resistance is located at 113.25 (38.2% retracement of 114.73 and 110.84), a break above targets 113.51 (23.6% retracement). On the downside, support is seen at 112.50, a break below could take it near 112.17.

GBP/USD: Sterling opened in a bearish gap as the December 4 Brexit deadline imposed by the EU’s Tusk for the UK to bring an improved offer loomed. Moreover, a renewed bout of buying interest seen around the US dollar across its main peers undermined the sentiment around the British Pound. Sterling traded 0.05 percent down at 1.3465, having hit a high of 1.3549 in the previous session, it’s highest since Sept. 25. FxWirePro's Hourly Sterling Strength Index stood at 22.50 (Neutral) by 0400 GMT. Investors’ focus will remain on developments surrounding Brexit deal and UK construction PMI, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3550, a break above could take it near 1.3600. On the downside, support is seen at 1.3412 (5-DMA), a break below targets 1.3350 (10-DMA). Against the euro, the pound was trading 0.1 percent up at 88.14 pence, having hit a high of 87.76 pence on Thursday, it’s highest since Nov. 2.

AUD/USD: The Australian dollar consolidated around the 0.7600 handle after data released earlier showed Australian firms rebuilt inventories in the third quarter, adding around 0.2 percentage points to economic growth. Meanwhile, separate data indicated job vacancies in the country were at a six-year peak, a sign that economy's run of strong employment gains could last a while yet. The Aussie trades 0.4 percent down at 0.7601, having hit a low of 0.7551 on Friday; it’s lowest since Nov. 21. FxWirePro's Hourly Aussie Strength Index stood at 34.11 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7573, a break below targets 0.7532 (Nov. 21 Low). On the upside, resistance is located at 0.7638, a break above could take it near 0.7665 (Nov. 13 High).

NZD/USD: The New Zealand dollar opened in a strong bearish gap as a rise in the U.S. ten year Treasury yields and progress over the tax reform in the Senate boosted the greenback across the board. The Kiwi trades 0.5 percent down at 0.6850, having touched a low of 0.6816 the prior session, its lowest level since Nov. 21. FxWirePro's Hourly Kiwi Strength Index was at -85.93 (Slightly Bearish) by 0500 GMT. Investors’ will continue to digest track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6882 (5- DMA), a break above could take it near 0.6910. On the downside, support is seen at 0.6848 (Session Low), a break below could drag it lower 0.6816 (Previous Session Low).

Equities Recap

Asian shares consolidated within a narrow range on fears U.S. policy tightening could pull out liquidity from emerging markets, while the U.S. dollar bounced to a 2-1/2-week top against the yen on U.S. tax bill progress.

MSCI's broadest index of Asia-Pacific shares outside Japan traded near a one-month trough.

Tokyo's Nikkei eased 0.4 percent to 22,733.77 points, Australia's S&P/ASX 200 index declined 0.1 percent to 5,985.60 points and South Korea's KOSPI rallied 0.8 percent to 2,494.87 points.

Shanghai composite index fell 0.2 percent to 3,310.71 points, while CSI300 index was trading 0.5 percent up at 4,017.02 points.

Hong Kong’s Hang Seng was trading 0.4 percent higher at 29,194.20 points. Taiwan shares added 0.5 percent to 10,651.11 points.

Commodities Recap

Crude oil prices eased after rising to multi-week high in the previous session, as U.S. shale drillers added two oil rigs in the week to Dec. 1, bringing the total count up to 749, the highest since September, however, prices were supported by an extension of output cuts agreed last week by OPEC and other producers. International benchmark Brent crude was trading 0.5 percent down at $63.33 per barrel by 0439 GMT, having hit a high of $64.30 on Friday, its highest since Nov. 8. U.S. West Texas Intermediate was trading 0.7 percent lower at $57.87 a barrel, after rising as low as $58.86 on Friday, its highest since Nov. 27.

Gold prices eased as the dollar gained after Republicans in the U.S. Senate passed a bill to overhaul the country's tax system, moving the process forward. Spot gold was trading 0.4 percent down at $1,274.32 an ounce by 0443 GMT, having declined to its lowest since Nov. 14 at $1,270.25 on Thursday. U.S. gold futures were down 0.3 percent at $1,278.10.

Treasuries Recap

The 10-year U.S Treasury yield stood at 2.402 percent higher by 0.04 bps, while 5-year yield was 0.04 bps up at 2.157 percent.

The Australian government bond futures eased, with the three-year bond contract and the 10-year contract down 2 ticks each at 98.030 and 97.4350 respectively.

The New Zealand government bonds eased, sending yields 4 basis points higher at the long end of the curve.

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December 15 21:00 UTC Released

USOverall Net Capital Flows

Actual

151.2 Bln USD

Forecast

Previous

-51.3 Bln USD

December 15 21:00 UTC Released

USNet L-T Flows,Incl.Swaps

Actual

7.9 Bln USD

Forecast

Previous

65.1 Bln USD

January 9 11:00 UTC 3421434214m

BRRetail Sales MM*

Actual

Forecast

0.35 %

Previous

January 9 11:00 UTC 3421434214m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

January 9 11:00 UTC 3421434214m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

January 9 11:00 UTC 3421434214m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

January 9 11:00 UTC 3421434214m

BRRetail Sales MM*

Actual

Forecast

0.35 %

Previous

January 9 11:00 UTC 3421434214m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

December 12 09:30 UTC 61976197m

GBRPIX YY

Actual

Forecast

Previous

4.2 %

December 12 09:30 UTC 61976197m

GBPPI Input Prices MM NSA

Actual

Forecast

Previous

1 %

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