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Asia Roundup: Kiwi hits 2-week highs on hawkish RBNZ, dollar eases as uncertainty over U.S. tax reforms clouds outlook, Asian shares at decade high - Thursday, November 9th, 2017

Market Roundup

  • China Oct PPI y/y, 6.9% vs 6.9%, f'cast 6.6%
     
  • China Oct CPI y/y, m/m, 1.9%, 0.1% vs 1.6%, 0.5%, f' cast 1.8%, 0.2%
     
  • Trump tells Xi he believes N. Korea solution can be found
     
  • Tax-cut debate in U.S. Congress swings to Senate bill
     
  • U.S. Democrats ride grassroots wave to major statehouse gains
     
  • New Zealand central bank
    looks ahead to faster inflation, earlier hike
     
  • Australia Sept Housing Finance, -2.3% vs 1.0%, f' cast 3.0%
     
  • Great Britain Oct RICS house price balance +1, +4 eyed, Sept +6, London weakest since '09
     
  • EU states see Britain failing to meet Brexit divorce terms
     
  • In new test for British PM, British aid minister resigns
     
  • Catalan strike severs road links as secessionist leader regroups
     
  • Japan Sept core machinery orders -8.1% m/m, -1.8% eyed, Q3 +4.7% q/q, Q4 -3.5% eyed
     
  • Japan Sept c/a surplus Y2.2712 trln, Y2.3754 trln eyed, Aug Y2.3804 trln
     
  • Japan Oct bank loans +2.8% y/y to Y518.091 trln, Sept +2.9%, Aug +3.2%
     
  • BoJ Oct Policy Board minutes – Even-keel most appropriate policy stance
     
  • BoJ - More demerits to further ease now, ETF purchase policy debate

Economic Data Ahead

  • (0200 ET/0700 GMT) Germany Sept Trade Balance, EUR, SA, f' cast 21.1 bln, last 21.6 bln
     
  • (0200 ET/0700 GMT) Germany Sept Exports m/m SA, f' cast -1.10%, last 3.10%
     
  • (0200 ET/0700 GMT) Germany Sept Imports m/m SA, f' cast 0.3%, last 1.2%

Key Events Ahead

  • (0300 ET/0800 GMT) ECB's Nouy speaks in European Parliament – Brussels
     
  • (0330 ET/0830 GMT) Swedish cen bank minutes from monetary policy – Stockholm
     
  • (0330 ET/0830 GMT) Riksbank's Skingsley speaks at a conference – Paris
     
  • (0800 ET/1300 GMT) French cen bank's Galhau speaks in a conference – Brussels
     
  • (0800 ET/1300 GMT) ECB's Coeure participates in a discussion – Lyon
     
  • (0815 ET/1315 GMT) ECB's Mersch speaks at a forum – Vienna
     
  • (0845 ET/1345 GMT) ECB's Constancio speaks in a conference – Rome
     
  • (1130 ET/1630 GMT) SNB's Jordan speaks at Frankfurt
     
  • (1320 ET/1820 GMT) ECB's Lautenschlager speaks in a conference – Washington

FX Beat

DXY: The dollar index eased on rising uncertainty over the fate of the U.S. tax reform plans. The greenback against a basket of currencies traded 0.1 percent down at 94.79, having touched a high of 95.15 on Tuesday, its highest since Oct. 27. FxWirePro's Hourly Dollar Strength Index stood at -101.90 (Highly Bearish) by 0500 GMT.

EUR/USD: The euro continued to consolidate within narrow ranges, as investors refrained from taking big positions ahead of the U.S. tax reforms plan due to be announced later in the day. The European currency traded flat at 1.1594, having touched a low of 1.1554 on Tuesday; its lowest since July 20. FxWirePro's Hourly Euro Strength Index stood at -124.58 (Highly Bearish) by 0400 GMT. Investors’ attention will remain on series of data from the Eurozone economies and EZ economic growth forecast report, ahead of the U.S. unemployment benefit claims and wholesale inventories data. Immediate resistance is located at 1.1632 (78.6% retracement of 1.1837 and 1.1674), a break above targets 1.1679 (61.8% retracement). 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 declined, extending previous session losses on increasing worries over possible delays to U.S. President Donald Trump's tax reform plans. The major was trading 0.2 percent down at 113.68, having hit a high of 114.73 on Monday, its highest since Mar. 15. FxWirePro's Hourly Yen Strength Index stood at 34.05 (Neutral) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. unemployment benefit claims and wholesale inventories data for further momentum. Immediate resistance is located at 114.40, a break above targets 114.75. On the downside, support is seen at 113.54 (Nov. 2 Low), a break below could take it near 113.29 (21-DMA).

GBP/USD: Sterling steadied after falling below the 1.3100 handle in the previous session on growing doubts over Prime Minister Theresa May's ability to deliver a good Brexit deal and a string of political scandals. The major traded 0.1 percent up at 1.3130, having hit a low of 1.3039 on Friday, its lowest since Oct. 6. FxWirePro's Hourly Sterling Strength Index stood at 71.86 (Slightly Bullish) by 0400 GMT. Investors’ focus will remain on UK's NIESR GDP estimate, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3175 (21-DMA), 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 up at 88.34 pence, having hit a high of 87.91 pence on Tuesday, its lowest since Nov. 2.

AUD/USD: The Australian dollar rose, extending prior session gains, as investors kept a close watch on a quarterly report from the Reserve Bank of Australia due Friday that could provide further clues on the direction of interest rates. The Aussie trades 0.1 percent up at 0.7680, having hit a low of 0.7638 on Tuesday; it’s lowest since Oct. 27. FxWirePro's Hourly Aussie Strength Index stood at 100.16 (Highly Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7638 (Nov. 7 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 rallied to a 2-week high after the Reserve Bank of New Zealand left interest rates at a record low 1.75 percent, but signalled a faster track for inflation and interest rate hikes. However, the major turned lower amid risk-off market sentiment. The Kiwi trades 0.1 percent down at 0.6957, having touched a high of 0.6971, its highest level since Oct. 24. FxWirePro's Hourly Kiwi Strength Index was at 63.38 (Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7013 (50.0% retracement of 0.7206 and 0.6818), a break above could take it near 0.7059 (38.2% retracement of 0.7206 and 0.6818). On the downside, support is seen at 0.6894 (10-DMA), a break below could drag it till 0.6820.

Equities Recap

Asia stocks traded near a decade high following record-breaking day on Wall Street, while the New Zealand dollar rallied to 2-week highs as hawkish statements by the RBNZ boosted the recently battered currency.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3 percent.

Tokyo's Nikkei fell 0.29 percent to 22,682.47 points, Australia's S&P/ASX 200 index gained 0.6 percent to 6,049.40 points and South Korea's KOSPI declined 0.4 percent to 2,541.18 points.

Shanghai composite index fell 0.1 percent to 3,411.77 points, while CSI300 index was trading 0.05 percent down at 4,047.06 points.

Hong Kong’s Hang Seng was trading 0.5 percent higher at 29,035.33 points. Taiwan shares shed 0.7 percent to 10,743.27 points.

Commodities Recap

Crude oil prices steadied after falling late in the previous session, supported by ongoing supply cuts led by OPEC and Russia. International benchmark Brent crude was trading 0.2 percent up at $63.60 per barrel by 0420 GMT, having hit a high of $64.62 on Tuesday, its highest since June 2015. U.S. West Texas Intermediate was trading 0.1 percent up at $56.88 a barrel, after rising as high as $57.67 on Tuesday, its highest since Jun. 2015.

Gold prices held gains after rising to a near three-week high in the previous session as the dollar eased amid uncertainty over U.S. tax reforms. Spot gold was trading 0.1 percent up at $1,280.81 per ounce at 0427 GMT, having touched its highest since Oct. 20 at $1,287.04 an ounce on Wednesday. U.S. gold futures for December delivery dipped 0.2 percent to $1,281.40.

Treasuries Recap

The 10-year U.S Treasury yield stood at 2.323 percent higher by 0.007 bps, while 5-year yield was 0.008 bps up at 2.009 percent.

The benchmark 10-year Japanese bonds yields hovered around zero percent as the Bank of Japan maintained its ultra-easing policy stance in its October meeting summary. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1/2 basis points to 0.030 percent, the yield on long-term 30-year dipped 1 basis point to 0.799 percent and the yield on short-term 2-year too remained steady at -0.203 percent.

The Australian bonds slumped following weakness in the U.S. Treasuries as investors reduced their existing bond holdings to make room for this week's government and corporate bond supply. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose3-1/2 basis points to 2.613 percent, the yield on the long-term 30-year note jumped nearly 3-1/2 basis points to 3.385 percent and the yield on short-term 2-year climbed 1 basis point to 1.820 percent.

The Canadian government bond prices were lower across the yield curve as investors digested federal and provincial bond supply. The two-year fell 4 Canadian cents to yield 1.42 percent and the 10-year declined 18 Canadian cents to yield 1.915 percent.

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2017-11-21 08:06:34
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November 20 20:00 UTC Released

BRCAGED Net Payroll Jobs*

Actual

77 k

Forecast

Previous

77 k

November 20 13:00 UTC Released

RURetail Sales YY

Actual

3.0 %

Forecast

3.9 %

Previous

3.1 %

November 21 13:55 UTC 331331m

USRedbook MM

Actual

Forecast

Previous

-1.2 %

November 21 13:55 UTC 331331m

USRedbook YY

Actual

Forecast

Previous

2.3 %

November 22 12:00 UTC 16561656m

USMBA Mortgage Applications

Actual

Forecast

Previous

3.1 %

November 22 12:00 UTC 16561656m

USMortgage Market Index

Actual

Forecast

Previous

401.7 Bln EUR

November 22 13:30 UTC 17461746m

USJobless Claims 4-Wk Avg

Actual

Forecast

Previous

237.75 k

November 22 13:30 UTC 17461746m

USInitial Jobless Claims

Actual

Forecast

240 k

Previous

249 k

November 22 13:30 UTC 17461746m

USContinued Jobless Claims

Actual

Forecast

1.882 Mln

Previous

1.860 Mln

November 22 14:30 UTC 18061806m

BRForeign Exchange Flows*

Actual

Forecast

Previous

-3.412 Bln USD

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