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Asia Roundup: Kiwi falls as current account, trade balance data miss expectations; gold slightly up, Asian markets flat -Wednesday, Dec 20, 2017

Market Roundup

  • NZ Q3 Current Account - Qtrly, -4.679B, forecast -4.290B, -0.618B last.
     
  • NZ Nov Trade Balance, -1.193.0M, -871.0M last, -843.0M revised.
     
  • U.S. House OKs tax overhaul, but procedural snag forces new vote.
     
  • Confusion over U.S. tax treatment could dampen $2.2 trillion repo market.
     
  • U.S. Congress faces tricky path to avoid government shutdown.
     
  • U.S. seeks ship ban over North Korea violations, Moon postponing drills.
     
  • U.S. gives China draft proposal for tougher North Korea sanctions.
     
  • Britain's Brexit rebels offer compromise on latest EU exit laws row.
     
  • UK employers downbeat on economy, less confident about hiring.
     
  • Bank of Japan's record Q3 JGB holdings cast doubt on unwinding QE.
     
  • BOJ held Y445 trln JGBs end-Sept, 40.9% of total, offshore Y120 trln, 11%.
  • Bit coin falls almost 20 pct from recent peak to 1-week low.

Economic Data Ahead

  • (0200 ET/0700 GMT) Germany Nov Producer Prices MM, forecast 0.2%, 0.3% last.
     
  • (0200 ET/0700 GMT) Germany Nov Producer Prices YY, forecast 2.6%, 2.7% last.
     
  • (0400 ET/0900 GMT) Euro Zone October Current Account NSA, EUR, 41.8B last.
     
  • (0400 ET/0900 GMT) Euro Zone Oct Current Account SA, EUR, 37.8B last

Key Events Ahead

  • (0330 ET/0830 GMT) Swedish Central Bank announces interest rate decision, publishes policy report – Stockholm.
     
  • (0500 ET/1000 GMT) Riksbank Governor Stefan Ingves and Jesper Hansson, head of the monetary policy department, hold press conference on interest rate decision – Stockholm.
     
  • (0500 ET/1000 GMT) IMF's Christine Lagarde and UK's Finance Minister Philip Hammond speak at the publication of an annual report on the UK economy.
     
  • (0800 ET/1300 GMT) Bundesbank President Jens Weidmann speaks in Milan about the challenges of the Euro zone economy.
     
  • (0815 ET/1315 GMT) BOE Governor Mark Carney and other BOE officials to attend Treasury Select Committee Hearing on the November Financial Stability Report.
     
  • (0900 ET/1400 GMT) BOE Board member Ignazio Angeloni speaks to Parliamentary Inquiry Committee on the Banking and Financial System.
     
  • (1630 ET/2130 GMT) BOE’s Andrew Hauser to attend New York Fed Commemoration of Centennial Anniversary of Provision of Account Services to Foreign Central Banks.

FX Recap

USD: The dollar index, stood at 93.46, having risen to 94.219 on Tuesday, its highest level since Nov. 14.

EUR/USD: The euro trades almost flat against U.S. dollar at $1.1841 mark. The dollar was supported on Wednesday by expectations of a U.S. tax overhaul while a sharp rise in German bond yields helped to underpin the euro. Pair made intraday high at $1.1846 and low at $1.1835 levels. A sustained close above $1.1862 is requires for the upside rally. Alternatively, reversal from key resistance will take the parity down towards $1.1717.

USD/JPY: The yen falls in early Asia and was currently trading around 112.98 marks. Pair made intraday high at 113.01 and low at 112.84 levels. A sustained close above 112.88 is required to take the parity higher towards key resistances around 113.57, 115.37 and 117.42 marks. Alternatively, a daily close below 112.88 will drag the parity down towards 112.06, 109.23, 108.12 and 107.50 marks respectively.

GBP/USD:  The Sterling slipped 0.3 percent to $1.3335. Against the euro, the pound weakened 0.6 percent to 88.55 pence and earlier hit a low of 88.68 pence, the weakest in a fortnight. Sterling slid to a two-week low against the euro on Tuesday as investors focused on the scale of the task still ahead for Britain to clinch a deal on leaving the European Union, despite progress in the talks made last week. The pound erases previous loss against U.S. dollar and was presently trading around $1.3392 marks.

AUD/USD: The Aussie fared better on the U.S. dollar. It held at $0.7658, not too far from a recent two-month top of $0.7694 touched last week. The Australian dollars slipped to one-week lows on the euro on Wednesday as a surge in German long-dated yields sparked a rally in the common currency, a move that also pushed local bond yields higher.

NZD/USD: The New Zealand dollar hit a one-week low of $0.6954 against its U.S. counterpart after dairy prices fell overnight in a global auction, confounding expectations for a rise.

Equities Recap

Shanghai composite index to open flat at 3,296.74 points and China's CSI300 index to open flat at 4,036.02 points.

Australia’s S&P/ASX 200 was trading 0.03 pct higher at 6,073.90 points.

Japan’s Nikkei was trading around 0.06 pct higher at 22,880.65 points.

Taiwan stock was trading around 0.34 pct higher at 10,503.87 points.

Hong Kong’s Hang seng was trading 0.02 pct higher at 29,259.55 points.

South Korea’s Kospi was trading 0.08 percent lower at 2,476.91 points.

India’s NSE Nifty was trading around 0.02 percent lower at 10,461.95 points and BSE Sensex was trading at 0.26 percent higher 33,928.59 points.

Commodities Recap

Oil prices inched up on Wednesday, supported by expectations of a fall in U.S. crude inventories and by the ongoing outage of the North Sea Forties pipeline system. U.S. West Texas Intermediate (WTI) crude futures were at $57.73 a barrel at 0312 GMT, up 17 cents, or 0.3 percent, from their last settlement. Brent crude futures, the international benchmark for oil prices, were at $63.91 a barrel, up 11 cents, or 0.17 percent.

Gold prices inched higher in quiet trade on Wednesday as the dollar held steady on expectations the U.S. government would pass the country's biggest tax overhaul in 30 years. Spot gold had risen 0.2 percent to $1,263.65 an ounce by 0350 GMT. U.S. gold futures were also up 0.2 percent, at $1,267 an ounce.

Treasuries Recap

The U.S. 10-year Treasury yield stood at 2.450 percent in Wednesday's Asian trade. On Tuesday, it had set a seven-week high of 2.472 percent, nearing a seven-month peak of 2.477 percent hit in late October.

New Zealand government bonds slipped, sending yields about 3 basis points higher on the long-end of the curve.

Australian government bond futures eased too, with the three-year bond contract down 3 ticks at 97.845. The 10-year contract fell 6 ticks to 97.3350.

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