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Asia Roundup: Aussies eases post-RBA policy statement, dollar index off highs amid U.S. tax plan uncertainty, Asian shares at decade peak - Tuesday, November 7th, 2017

Market Roundup

  • Australia's central bank upbeat on growth, cautious on low inflation
     
  • New Zealand PM Ardern: not concerned by fall in NZ dollar
  • New Zealand launches cen bank review with eye on lifting employment
     
  • Trump lands in South Korea, frontlines of North Korean nuclear standoff
     
  • Dudley's exit hangs another question over Fed leadership
     
  • Republicans push ahead with U.S. tax bill as Democrats sharpen attacks
     
  • Japan fin min says won't use FTA to resolve US trade imbalance
     
  • Japan Sept real wages -0.1% y/y, overtime +0.9%, total cash earnings +0.9%
  • Japan Real wages down 4th straight month, cash earnings rise best since July ’16
     
  • Saudi economy vulnerable as corruption probe hits business old guard
     
  • Great Britain Oct UK BRC like-for-like retail sales -1.0% y/y, weakest Oct since '08
     
  • Great Britain Total retail sales +0.2%, weakest Oct since '08 too, Sept +1.9%, +2.3%
     
  • UK business demands Brexit clarity but PM May provides none
     
  • Britain introduces law seeking to help post-Brexit trade

Economic Data Ahead

  • (0200 ET/0700 GMT) Germany Sept Industrial Output m/m, f'cast -0.8%, 2.6% last
     
  • (0330 ET/0830 GMT) Great Britain Oct Halifax Prices m/m, 3m/y/y, f'cast 0.2%, 4.5%, 0.8%, 4.0% last
     
  • (0400 ET/0900 GMT) EZ Sept Retail Sales m/m, y/y, f'cast 0.6%, 2.7%, -0.5%, 1.2% last

Key Events Ahead

  • N/A EFSF two-tranche ’27 and ’48 bonds E2.8 bln+ via BarCap, DZ, Nomura
     
  • N/A Canada 5-year USD global via BMO, Citi, HSBC, Scotia and TD
     
  • N/A EU's Economic and Financial Affairs Council meeting
     
  • N/A ECB's Constancio to attend ECOFIN meeting - Brussels
     
  • (0300 ET/0800 GMT) Norges Bank's Oslen speaks at Norge
     
  • (0400 ET/0900 GMT) ECB's Forum meet - talk led by Mario Draghi - Frankfurt
     
  • (0710 ET/1210 GMT) Riksbank's Floden participates at a conference - Stockholm
     
  • (0930 ET/1430 GMT) Riksbank's Skingsley participates at Kvira's annual meeting - Stockholm
     
  • (1255 ET/1755 GMT) BoC's Poloz speaks at CFA Montreal
     
  • (1315 ET/1815 GMT) Fed's Quarles participates in a discussion - New York
     
  • (1330 ET/1830 GMT) BoE's Taylor speaks at RAC Club, London
     
  • (1430 ET/1930 GMT) Fed's Yellen speaks at Douglas Award for Ethics in Govt – Wahington

 

FX Beat

DXY: The dollar index edged up after falling from a 10-day high in the previous session on concerns whether U.S. Republicans could pass their tax plan. The greenback against a basket of currencies traded flat at 94.78, having touched a high of 95.08 on Monday, its highest since Oct. 27. FxWirePro's Hourly Dollar Strength Index stood at -13.05 (Neutral) by 0500 GMT.

EUR/USD: The euro consolidated within a narrow range, as investors remained nervous ahead of the ECB President Draghi’s opening remarks scheduled to be delivered at the ECB Forum on Banking Supervision, in Frankfurt. The European currency traded flat at 1.1607, having touched a low of 1.1580 the previous session, its lowest since Oct. 30. FxWirePro's Hourly Euro Strength Index stood at -114.24 (Highly Bearish) by 0400 GMT. Investors’ attention will remain on the German industrial production data and ECB Draghi’s speech, ahead of the U.S. JOLTS Job Opening and economic optimism index. Immediate resistance is located at 1.1632 (78.6% retracement of 1.1837 and 1.1674), a break above targets 1.1662 (10-DMA). On the downside, support is seen at 1.1580 (Nov. 6 Low), a break below could drag it lower 1.1550.

USD/JPY: The dollar rose after falling from an 8-month peak in the previous session on the back of uncertainty over whether the Republicans can pass their tax bill in a timely manner. The major was trading 0.2 percent up at 113.98, having hit a high of 114.73 on Monday, its highest since Mar. 15. FxWirePro's Hourly Yen Strength Index stood at -36.82 (Neutral) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. JOLTS Job Opening and economic optimism index for further momentum. Immediate resistance is located at 114.45, a break above targets 114.80. On the downside, support is seen at 113.53 (Nov. 2 Low), a break below could take it near 113.16 (21-DMA).

GBP/USD: Sterling edged up, extending gains for the third consecutive session, amid persisting uncertainty around Brexit negotiations and instability in the governing Conservative party. The major traded flat at 1.3171, having hit a low of 1.3039 on Friday, its lowest since Oct. 6. FxWirePro's Hourly Sterling Strength Index stood at 71.57 (Bullish) by 0400 GMT. Investors’ focus will remain on UK Halifax house prices and NIESR GDP estimate, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3200, a break above could take it near 1.3227. On the downside, support is seen at 1.3125 (Oct. 19 Low), a break below targets 1.3078. Against the euro, the pound was trading 0.1 percent down at 88.16 pence, having hit a low of 89.38 pence on Thursday, its lowest since Oct. 26.

AUD/USD: The Australian dollar slightly edged up after the country's central bank kept the cash rate unchanged at 1.5 percent as expected and sounded less dovish than bears had wagered at its policy meeting. However, the gains could not be sustained as the greenback strengthened across the board. The Aussie trades 0.1 percent down at 0.7680,  having hit a low of 0.7638 in the prior session; it’s lowest since Oct. 27. FxWirePro's Hourly Aussie Strength Index stood at -56.32 (Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7638 (Previous Session Low), a break below targets 0.7600. On the upside, resistance is located at 0.7725 (61.8% retracement of 0.7883 and 0.7625), a break above could take it near 0.7755 (50% retracement).

NZD/USD: The New Zealand dollar fell after rising to a 2-week high in the previous session after the country's finance minister said the new government had no desire to make targeting the currency a part of its monetary policy framework. The Kiwi trades 0.2 percent down at 0.6932, having touched a high of 0.6957 in the previous session, its highest level since Oct. 24. FxWirePro's Hourly Kiwi Strength Index was at 32.93 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6968 (61.8% retracement of 0.7206 and 0.6818), a break above could take it near 0.7013 (50.0% retracement of 0.7206 and 0.6818). On the downside, support is seen at 0.6887 (10-DMA), a break below could drag it till 0.6820.

Equities Recap

Asian shares touched their highest in ten years, while the greenback eased from a 10-day peak on lack of clarity on the progress of U.S. tax reform.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2 percent in early trade, hitting its highest peak since November 2007.

Tokyo's Nikkei gained 1.6 percent to 22,910.95 points, Australia's S&P/ASX 200 index advanced 1.02 percent to 6,014.30 points and South Korea's KOSPI declined 0.2 percent to 2,543.23 points.

Shanghai composite index rose 0.5 percent to 3,404.00 points, while CSI300 index was trading 0.5 percent up at 4,038.39 points.

Hong Kong’s Hang Seng was trading 1.3 percent higher at 28,973.11 points. Taiwan shares added 0.5 percent to 10,840.34 points.

Commodities Recap

Crude oil prices edged higher after posting the biggest gains in six weeks a day earlier, underpinned by moves by Saudi Arabia's crown prince to tighten his grip on power. International benchmark Brent crude was trading 0.2 percent up at $64.17 per barrel by 0412 GMT, having hit a high of $64.41 the prior day, its highest since July 2015. U.S. West Texas Intermediate was trading 0.2 percent up at $57.36 a barrel, after rising as high as $57.58 on Monday, its highest since Jul. 2015.

Gold prices declined, reversing some of its previous session gains, as firmer Asian stocks marked a 10-year peak. Spot gold was down 0.1 percent at $1,279.42 per ounce at 0418 GMT, having jumped nearly one percent on Monday, its biggest one-day percentage gain since Sept. 25. U.S. gold futures for December delivery dipped 0.1 percent to $1,280.90.

Treasuries Recap

The 10-year U.S Treasury yield stood at 2.327 percent higher by 0.007 bps, while 5-year yield was 0.005 bps up at 1.917 percent.

The Australian bonds slumped after the country's central bank kept the cash rate unchanged at 1.5 percent as expected and sounded less dovish. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 2basis points to 2.559 percent, the yield on the long-term 30-year note rose nearly 1 basis point to 3.359 percent and the yield on short-term 2-year jumped over 2 basis points to 1.792 percent.

The New Zealand bonds ended the session lower as investors wait to watch the GlobalDairyTrade (GDT) price auction, scheduled to be held on November 7. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 2.83 percent, the yield on the 20-year note also slid 1 basis point to 3.35 percent and the yield on short-term 2-year too traded 1 basis point lower at 2.00 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 35293529m

ITExport Prices*

Actual

Forecast

Previous

111 %

November 27 09:00 UTC 35293529m

ITImport Prices*

Actual

Forecast

Previous

116.1 %

November 27 14:00 UTC 38293829m

MXTrade Balance, $*

Actual

Forecast

Previous

-1.886 Bln USD

November 27 14:00 UTC 38293829m

MXTrade Balance SA*

Actual

Forecast

Previous

-1.559 Bln USD

November 27 15:30 UTC 39193919m

USDallas Fed mfg bus index

Actual

Forecast

Previous

27.6

November 27 21:00 UTC 42494249m

KRBOK Manufacturing BSI*

Actual

Forecast

Previous

87 Bln BRL

November 28 00:00 UTC 44294429m

BRCentral Govt Balance

Actual

Forecast

Previous

-22.725 Bln BRL

November 28 07:00 UTC 48494849m

DEGDP Growth QQ* Advance

Actual

Forecast

Previous

10.7 %

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