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Asia Roundup: Japanese yen marginally lower as BOJ keeps interest rate steady, Asian markets turn lower, gold stabilizes below $1,270 - Thursday, April 27, 2017

Market Roundup

  • BOJ leaves policy steady, as eyed, to continue with current QQE, Y80 trln annual rate, depo rate target -0.1%, 10-year JGB @zero, tweaks up growth forecast, down CPI, FY ‘17/18 +1.6% vs +1.5% in Jan, core CPI +1.4% vs +1.5%.
     
  • Japan MoF flow data week-ended April 22 – Japanese buy net Y136.2 bln foreign stocks, sell Y1.2838 trln bonds, buy Y30.3 bln bills; foreign investors buy net Y258.4 bln Japanese stocks, sell Y692.9 bln JGBs, buy Y72.5 bln bills.

  • Japan March crude imports -16.8% y/y, LNG -0.1%, thermal coal +5.6%.
     
  • Japan Ajinomoto preparing Y200 bln war chest for acquisitions - Nikkei.
     
  • White House said to draft plan for US break from NAFTA - New York Times.
     
  • Report later denied, Trump told Mexico’s Pena Nieto, Canada’s Trudeau he will bring NAFTA up to date through renegotiation, CAD and MXN see gains.
     
  • White House – China now sees North Korea as threat to Chinese interests and security.

  • China Q1 industrial profits +28.3% y/y, march +23.8%, end-March liabilities +6.6%.
     
  • Australia Q1 import prices +1.2% q/q, -0.6% y/y, export prices +9.4%, +29.1%.

Economic Data Ahead

  • (0300 ET/0700 GMT) Spain April HICP – flash, +2.3% y/y eyed; last +2.1%.
     
  • (0300 ET/0700 GMT) Spain Q1 unemployment, 18.6% eyed; last 18.6%.

  • (0330 ET/0730 GMT) Sweden March trade balance, SEK1.5 bln surplus eyed; last account in balance.
     
  • (0330 ET/0730 GMT) Sweden March PPI; last -0.8% m/m, +7.5% y/y.
     
  • (0400 ET/0800 GMT) Italy April manufacturing business confidence index, 107.0 eyed; last 107.1.
     
  • (0400 ET/0800 GMT) Italy April consumer confidence index,     107.5 eyed; last 107.6.
     
  • (0500 ET/0900 GMT) Italy March trade balance non-EU – flash; last E1.72 bln surplus.
     
  • (0500 ET/0900 GMT) EZ April economic sentiment index, 108.1 eyed; last 107.9.

  • (0500 ET/0900 GMT) EZ April business climate index,    0.82 eyed; last 0.82.
     
  • (0500 ET/0900 GMT) EZ April industrial sentiment index, 1.3 eyed; last   1.2.
     
  • (0500 ET/0900 GMT) EZ April services sentiment index, 13.0 eyed; last  12.7.

  • (0500 ET/0900 GMT) EZ April consumer confidence index – final, -3.6 eyed; flash -3.6.
     
  • (0600 ET/1000 GMT) UK April CBI distributive trades sales index, 6.0 eyed; last 9.0.
     
  • (0800 ET/1200 GMT) Germany April HICP – flash, -0.1% m/m, +1.9% y/y eyed; last +0.1%, +1.5%.

  • (0830 ET/1230 GMT) US w/e initial jobless claims, 245k eyed; last 244k.
     
  • (0830 ET/1230 GMT) March durable goods orders, +1.2% m/m eyed; last +1.8%, ex-def +2.2%.
     
  • (0830 ET/1230 GMT) March - ex-transport, +0.4% m/m eyed; last +0.5%.

  • (0830 ET/1230 GMT) March – non-def cap ex-air, +0.5% m/m eyed; last -0.1%.
     
  • (1000 ET/1400 GMT) US March NAR pending home sales, -1.0% m/m eyed; last +5.5%, index 112.3.

  • (1100 ET/1500 GMT) US April KC Fed manufacturing, composite indices; last 37, 20.

Key Events Ahead

  • (0330 ET/0730 GMT) Riksbank policy announcement, no change in -0.5% repo rate eyed.
     
  • (0430 ET/0830 GMT) UK BrexitSec Davis answers questions in House of Commons.
     
  • (0500 ET/0900 GMT) Riksbank Gov Ingves, Nyman press conference.

  • (0500 ET/0900 GMT) EU Barnier, ministers meeting in Luxembourg to prepare for Brexit.
     
  • (0510 ET/0910 GMT) RBA Gov Lowe speaks.
     
  • (0600 ET/1000 GMT) Italy E3-3.5/2-2.5/2.25-2.75 bln 0.436/1.2/2.2% FRN/BTP auctions.
     
  • (0745 ET/1145 GMT) ECB policy announcement, no change in zero% refi, -0.4% depo rates eyed.
  • (0830 ET/1230 GMT) ECB President Draghi press conference.

FX Recap

USD: The dollar held gains against the yen on Thursday after U.S. President Donald Trump's tax plan offered no fresh surprises, slowing the greenback's rally, while the market awaited the European Central Bank's upcoming monetary policy decision. The dollar index was trading around 98.91 marks.

EUR/USD: The euro was up 0.1 percent at $1.0913. The euro has had a buoyant week, climbing to a 5-1/2 month high of $1.0951 on Wednesday, as the first round of the French presidential elections held over the weekend reduced perceived risk towards the common currency. The euro was at 121.445 yen after climbing overnight to a five-week peak of 121.980. The European central bank is due to announce its policy decision later on Thursday and the focus is on whether the recent French election results, which favour a pro-euro centrist, had any impact in the ECB's stance.

USD/JPY: The yen showed little reaction to the Bank of Japan's decision on Thursday to keep monetary policy steady as the outcome was well anticipated. USD/JPY was currently trading around 111.20 marks. Pair made intraday high at 111.40 and low at 110.99 levels.  A sustained close above 111.04 is required to take the parity higher towards 111.45, 112.19, 113.72, 115.37 and 117.42 marks. Alternatively, a daily close below 111.04 will drag the parity down towards 108.13 levels.

GBP/USD:  The sterling rose gradually against U.S. dollar and was currently trading around $1.2868 marks. Pair made intraday high at $1.2875 and low at $1.2837 marks. Sterling clawed back some ground against the euro on Wednesday, recovering from a two-week low, as a perception that political risk had faded drove investors to buy the pound after taking their bets against it to record levels.

AUD/USD:  The Australian dollar rose modestly in Asian hours after the White House said Trump had agreed not to terminate the NAFTA agreement for now. The Aussie was last up 0.17 percent at $0.7483, not far from its lowest point in more than three months of $0.7455 on Wednesday. Pair made intraday high at $0.7492 and low at $0.7468 marks. Immediate resistance was seen at $0.7586 and support was seen at $0.7442 marks.

NZD/USD: The New Zealand dollar rose 0.3 percent to $0.6920, up from a four-month low of $0.6873 on Wednesday.

Equities Recap

Japan’s Nikkei was trading around 0.15 percent lower at 19,260 points.  

Hong Kong’s Hang seng was trading 0.05 percent lower at 24,567 points.

Australia’s S&P ASX200 was trading 0.18 percent higher at 5,922 points.

South Korea’s kospi was trading 0.05 percent lower at 2,207 points.

Shanghai composite index to open down 0.3 pct at 3,131.35 points and China's CSI300 index to open down 0.3 pct at 3,435.10 points.

Taiwan’s market was trading 0.20 percent lower at 9,838.93 points.

India’s NSE Nifty was trading around 0.09 percent lower at 9,343.28 points and BSE Sensex was trading at 0.28 percent lower at 30,068.87 points.

Commodities Recap

Oil prices dipped on Thursday, weighed down by a general sentiment of globally bloated markets, though traders said that prices seemed to have found support around current levels. U.S. West Texas Intermediate (WTI) crude oil futures were trading at $49.37 per barrel at 0420 GMT, down 25 cents, or 0.5 percent from their last close. WTI has lost around 8.5 percent in value from its April peak. Brent crude futures, the international benchmark for oil prices, were at $51.62 per barrel, down 20 cents, or 0.4 percent. Brent is almost 9 percent below its April peak.

Gold prices edged down on Thursday on ebbing geo-political worries but scepticism over U.S. President Donald Trump's proposed tax reform curbed further losses. Spot gold was down 0.2 percent at $1,266.94 per ounce, as of 0406 GMT. Bullion prices edged away from a two-week low of 1,259.90, hit during the session on Wednesday. U.S. gold futures climbed 0.3 percent to $1,268.30 an ounce.

Treasuries Recap

Yields on New Zealand government bonds fell 2 basis points at the short-end of the curve and about 4 basis points at the long end.

Australian government bond futures climbed, with the three-year bond contract up 2 ticks at 98.140. The 10-year contract added 2.5 ticks to 97.365.

10-year U.S. treasury yield was at 2.314 percent vs U.S. close of 2.311 percent on Wednesday.

                                                        

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