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Asia Roundup: Kiwi at 1-week peak as RBNZ stands pat, greenback consolidates ahead of Fed Chair Powells' testimony, Asian shares tumble - Wednesday, November 13th, 2019

Market Roundup

  • Oil eases on uncertainty over U.S.-China trade deal
     
  • Euro steadies amid coalition concerns
     
  • New Zealand central bank holds rates

Economic Data Ahead

  • (0200 ET/0700 GMT) German consumer price index October YoY
     
  • (0200 ET/0700 GMT) German consumer price index October MoM
     
  • (0430 ET/0930 GMT) UK consumer price index October MoM
     
  • (0430 ET/0930 GMT) UK consumer price index October YoY
     
  • (0430 ET/0930 GMT) UK producer price index October
     
  • (0430 ET/0930 GMT) UK retail price index October

Key Events Ahead

  • (0300 ET/0800 GMT) ECB non-monetary policy meeting

FX Beat

DXY: The dollar index held firm near recent highs as investors now await U.S. Federal Reserve Chairman Jerome Powell's testimony on the economic outlook before the congressional Joint Economic Committee. The greenback against a basket of currencies traded flat at 98.33, having touched a high of 98.42 on Tuesday, its highest since October 15.

EUR/USD: The euro steadied after tumbling to a near 1-month low in the previous session, as Spain's Socialist party reached a preliminary coalition deal with the far-left Unidas Podemos following an inconclusive election on Sunday. The European currency traded flat at 1.1014, having touched a low of 1.1002 on Tuesday, its lowest since October 15. Investors’ attention will remain on a series of data from the Eurozone economies, and EZ industrial production, ahead of the U.S. consumer price index, monthly budget statement and Fed officials' speeches. Immediate resistance is located at 1.1035 (5-DMA), a break above targets 1.1062. On the downside, support is seen at 1.0985, a break below could drag it below 1.0957.

USD/JPY: The dollar rebounded from a near 1-week low hit earlier in the day after U.S. President Donald Trump said a trade deal with China was close but offered no new details on negotiations. However, the upside in the pair appears limited as the political unrest in Hong Kong continued to dent investor risk sentiment. The major was trading 0.05 percent up at 109.03, having hit a high of 109.48 on Thursday, its highest since May 31. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. consumer price index, monthly budget statement and Fed officials' speeches. Immediate resistance is located at 109.62 (May 31 High), a break above targets 109.92 (May 30 High). On the downside, support is seen at 108.75 (21-DMA), a break below could take it near at 108.49.

GBP/USD: Sterling consolidated within narrow ranges as investors remained cautious ahead of the December 12 election. An opinion poll by Survation showed the lead held by the Conservatives over the main opposition Labour party had narrowed over the past week. The major traded 0.05 percent up at 1.2838, having hit a high of 1.2897 on Monday, it’s highest since November 5. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2917, a break above could take it near 1.2972 (November 1 High). On the downside, support is seen at 1.2794, a break below targets 1.2768. Against the euro, the pound was trading flat at 85.71 pence, having hit a high of 85.57 on Monday, it’s highest since May 8.

AUD/USD: The Australian dollar plunged to a 2-week low due to lack of details about the U.S.-China trade talks in U.S. President Donald Trump's speech. The Aussie trades 0.05 percent down at 0.6842, having hit a low of 0.6830 earlier, it’s lowest since October 28. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6810, a break below targets 0.6784. On the upside, resistance is located at 0.6876, a break above could take it near 0.6907.

NZD/USD: The New Zealand dollar rallied by more than 1 percent to a 1-week peak after the Reserve Bank of New Zealand kept interest rates at an all-time low of 1 percent saying it saw no urgency to ease policy further. The Kiwi trades 0.9 percent up at 0.6392, having touched a high of 0.6416 earlier, its highest level since November 5. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6416, a break above could take it near 0.6435. On the downside, support is seen at 0.6313, a break below could drag it below 0.6289.

Equities Recap

Asian shares tumbled on growing worries U.S.-China trade talks are stalling after President Donald Trump failed to deliver any new information on a trade deal between the two countries.

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

Tokyo's Nikkei declined 0.9 percent to 23,304.64 points, Australia's S&P/ASX 200 index rose 0.8 percent to 6,701.00 points and South Korea's KOSPI fell 0.9 percent to 2,120.57 points.

Shanghai composite index eased 0.2 percent to 2,910.55 points, while CSI 300 index traded 0.05 percent up at 3,904.04 points.

Hong Kong’s Hang Seng traded 1.8 percent lower at 26,587.81 points. Taiwan shares shed 0.4 percent to 11,471.84 points.

Commodities Recap

Crude oil prices eased as prospects for a trade deal between the United States and China dimmed, weighing on the outlook for the global economy and energy demand. International benchmark Brent crude was trading 0.2 percent down at $61.79 per barrel by 0406 GMT, having hit a low of $60.65 on Friday, its lowest since November 1. U.S. West Texas Intermediate was trading 0.2 percent lower at $56.66 a barrel, after falling as low as $55.74 on Friday, its lowest since November 1.

Gold prices surged as investors remained cautious after a much-awaited speech by U.S. President Donald Trump gave no details on the signing of a trade deal with China. Spot gold was trading 0.2 percent  at $1,458.90 per ounce by 0408 GMT, having touched a low of $1,445.51 on Tuesday, its lowest August 5.  U.S. gold futures were up 0.3 percent at $1,458 per ounce.

Treasuries Recap

The Australian government bonds remained flat during Asian session amid a muted trading day that witnessed data of little economic significance. However, U.S.-China trade tussle continues to draw headlines in the financial market ahead of Australia’s employment report for the month of October, scheduled to be released on November 14 by 00:30GMT. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, remained steady at 1.276 percent, the yield on the long-term 30-year bond also flat at 1.881 percent and the yield on short-term 2-year hovered around 0.861 percent by 04:20GMT.

By Lactus Fernandes
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