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Asia Roundup: Kiwi gains on robust NZ GDP expectations, greenback eases as soft U.S. economic data supports Fed's dovish stance, Asian shares surge - Monday, March 18th, 2019

Market Roundup

  • Trump-Xi meeting to end trade war may be pushed back to June- SCMP
     
  • U.S. Fed looks to avoid crossed signals at policy meeting
     
  • Japan's exports slump again on weak external demand, puts BOJ on notice
     
  • UK's Hammond says not there yet on Brexit vote support
     
  • PM May warns lawmakers: back my deal or face long Brexit delay
     
  • Brexit spurs biggest cut in UK business investment in 10 years -BCC
     

Economic Data Ahead

  • No major economic data releases

Key Events Ahead

  • (0915 ET/1315 GMT) ECB Board Member Luis de Guindos speaks at the Asociación para el Progreso de la Dirección in Madrid
     
  • (1110 ET/1510 GMT) ECB's chief economist Peter Praet speaks in Luxembourg
     

FX Beat

DXY: The dollar index declined, hovering towards a 1-week low hit last week, after data showed U.S. manufacturing output fell in February, while factory activity in New York state was softer than expected this month, sending U.S. bond yields down to 10-week lows. The greenback against a basket of currencies traded flat at 96.49, having touched a low of 96.39 on Wednesday, its lowest since March 4. FxWirePro's Hourly Dollar Strength Index stood at -96.64 (Highly Bearish) by 0500 GMT.

EUR/USD: The euro rose, extending gains for the second straight session, after the governor of the Bank of Spain Pablo Hernandez de Cos said there is currently no risk of recession in Europe or Spain, though he warned that political instability could hold back necessary reform in Spain. The European currency traded 0.1 percent up at 1.1336, having touched a high of 1.1344 on Friday, its highest since Mar. 4. FxWirePro's Hourly Euro Strength Index stood at 70.65 (Bullish) by 0500 GMT. Investors’ attention will remain on EZ trade balance, ahead of the U.S. NAHB housing market index. Immediate resistance is located at 1.1367 (78.6% retracement of 1.1176 and 1.1496), a break above targets 1.1408 (March 1 High). On the downside, support is seen at 1.1297 (5-DMA), a break below could drag it till 1.1243 (Mar. 12 Low).

USD/JPY: The dollar steadied after easing from a 1-1/2 week peak in the previous session on weaker-than-estimated U.S. economic data that cemented expectations the Fed could strike a dovish stance this week. The major was trading 0.1 percent up at 111.54, having hit a high of 111.90 on Friday, its highest since March 6. FxWirePro's Hourly Yen Strength Index stood at -96.64 (Slightly Bearish) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of U.S. NAHB housing market index. Immediate resistance is located at 112.13 (Mar. 5 High), a break above targets 112.60 (Dec. 20 High). On the downside, support is seen at 111.11 (Mar. 12 Low), a break below could take it lower at 110.66 (Feb.28 Low).

GBP/USD: Sterling consolidated within narrow ranges, supported by relief that a no-deal Brexit will likely be averted. British Prime Minister Theresa May now has only three days to win approval for her deal to leave the European Union if she wants to go to a summit with the EU bloc's leaders on Thursday. The major traded flat at 1.3286, having hit a high of 1.3380 on Wednesday; it’s highest since June 14. FxWirePro's Hourly Sterling Strength Index stood at 109.10 (Highly Bullish) 0500 GMT. Investors’ will remain on the sidelines, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3380 (Mar. 13 High), a break above could take it near 1.3446 (June 14 High). On the downside, support is seen at 1.3202(Mar. 15 Low), a break below targets 1.3166 (Mar. 4 Low). Against the euro, the pound was trading 0.2 percent down at 85.30 pence, having hit a high of 84.71 on Wednesday, it’s highest since May 2017.

AUD/USD: The Australian dollar surged to a 2-week peak, as the greenback eased on bets the U.S. Federal Reserve would keep policy accommodative at its meeting this week. The Aussie trades 0.5 percent up at 0.7113, having hit a high of 0.7114 on Thursday, it’s highest since Mar. 1. FxWirePro's Hourly Aussie Strength Index stood at -9.64 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7057 (Mar. 12 Low), a break below targets 0.6993 (Jan.4 Low). On the upside, resistance is located at 0.7150 (Feb. 22 High), a break above could take it near 0.7182 (Feb. 20 High).

NZD/USD: The New Zealand dollar rallied to a 1-week peak, as investors keenly awaited figures on the country's gross domestic product due on Thursday, which is expected to show the economy rebounded in the December quarter. The Kiwi trades 0.3 percent up at 0.6864, having touched a high of 0.6867, its highest level Mar. 12. FxWirePro's Hourly Kiwi Strength Index was at -54.60 (Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6876 (Feb. 21 High), a break above could take it near 0.6901 (Feb. 27 High). On the downside, support is seen at 0.6808 (Mar. 14 Low), a break below could drag it below 0.6757 (Feb. 22 Low).

Equities Recap

Asian shares rose amid mounting speculation the U.S. Federal Reserve will sound dovish at its policy meeting this week.

MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.4 percent.

Tokyo's Nikkei rose 0.6 percent to 21,584.50 points, Australia's S&P/ASX 200 index gained 0.3 percent to 6,190.50 points and South Korea's KOSPI rallied 0.1 percent to 2,177.91 points.

Shanghai composite index surged 1.8 percent to 3,079.21 points, while CSI300 index traded 2.2 percent up at 3,828.60 points.

Hong Kong’s Hang Seng traded 1.1 percent higher at 29,316.97 points. Taiwan shares added 0.7 percent to 10,512.70 points

Commodities Recap

Crude oil prices eased amid concerns that an economic downturn may dent fuel consumption, however, downside appears limited as crude markets remain broadly supported by supply cuts led by producer group OPEC and U.S. sanctions against Iran and Venezuela. International benchmark Brent crude was trading 0.05 percent down at $66.97 per barrel by 0431 GMT, having hit a high of $68.11 on Thursday, its highest since Nov. 16. U.S. West Texas Intermediate was trading 0.2 percent lower at $58.25 a barrel, after rising as high as $58.93 on Thursday, its highest since the Nov. 13.

Gold prices declined as equity markets gained and the dollar steadied ahead of a U.S. Federal Reserve policy meeting later this week. Spot gold was 0.2 percent down at $1,298.93 per ounce at 0433 GMT, having touched a high of $1,311.18 on Wednesday, its highest since March 1. U.S. gold futures fell 0.3 percent to $1,299.10 an ounce.

Treasuries Recap

The 10-year Treasuries yield fell to as low as 2.580 percent, its lowest since Jan. 4.

The Japanese government bonds were steady to slightly higher, with the 10-year JGB futures rose 0.01 point to 152.80. Benchmark cash 10-year JGBs was flat at minus 0.040 percent. The 20-year JGB yield was flat at 0.395 percent while the 30-year JGB yield was also unchanged at 0.570 percent.

The Australian government bond futures were barely changed, with the 3-year bond contract down half a tick at 98.510. The 10-year contract was unchanged at 98.02.

The New Zealand government bonds gained slightly, sending yields about 1 basis point lower at the long-end of the curve.

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April 19 12:30 UTC Released

USHouse Starts MM: Change

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-0.3 %

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-8.7 %

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USHousing Starts Number MM

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1.139 Mln

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1.23 Mln

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1.162 Mln

January 31 00:00 UTC 638904638904m

ARAnnual Primary Balance*

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ARTrade Balance

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-1541 %

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2016 bln ARS

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ARTrade Balance

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-1541 %

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2016 bln ARS

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Bln AR bln ARS

January 31 00:00 UTC 638904638904m

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2016 bln ARS

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