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Asia Roundup: Antipodeans ease as U.S.-China trade talks deadlocked; yen rallies as investors await China retaliation, Asian shares plunge - Monday, May 13th, 2019

Market Roundup

  • China defiant toward U.S. on trade, Kudlow urges strong enforcement steps
     
  • Trump may provoke U.S. lawmakers to impeach him -senior Democrat
     
  • Iran commander calls U.S. military in Gulf a target not a threat - ISNA
     
  • Saudi Energy Minister says two Saudi oil tankers attacked near UAE waters
     
  • Australian opposition holds slim lead over government ahead of May 18 election - poll
     
  • Australia Mar Housing Finance, -2.5 pct, 2.0 pct prev
     
  • South Africa's ANC celebrates election win with street party      
     
  • China, Singapore renew bilateral currency swap agreement
     

Economic Data Ahead

  • No major economic data scheduled

Key Events Ahead

  • (0430 ET/1030 GMT) Riksbank Deputy Governor Henry Ohlsson speaks on underlying inflation at the Swedish Society of Financial Analysts in Stockholm
     
  • (0905 ET/1305 GMT) Boston Fed President Eric Rosengren speaks at a conference in Boston
     
  • (0910 ET/1310 GMT) Fed's Clarida speaks at a conference in Boston
     
  • (1255 ET/1655 GMT) Boston Fed President Eric Rosengren and Fed's Clarida give closing remarks at "FedListens - New England Perspectives on Fed Policymaking" conference in Boston
     

FX Beat

DXY: The dollar index consolidated near 3-1/2 week lows, as investors braced for threatened countermeasures from China in retaliation for Washington's tariff increase on Friday on $200 billion worth of Chinese goods. The greenback against a basket of currencies traded flat at 97.32, having touched a low of 97.13 on Friday, its lowest since April 18 FxWirePro's Hourly Dollar Strength Index stood at -45.64 (Neutral) by 0500 GMT.

EUR/USD: The euro eased, halting a 3-day winning streak, as the greenback steadied amid escalating U.S.-China trade tensions. The European currency traded 0.05 percent down at 1.1229, having touched a high of 1.1253 on Friday, its highest since May 1. FxWirePro's Hourly Euro Strength Index stood at 60.83 (Bullish) by 0500 GMT. Investors’ attention will remain on speeches by Fed's Rosengren and Clarida, amid a lack of economic data from the Eurozone docket. Immediate resistance is located at 1.1262 (April 22 High), a break above targets 1.1304 (April 18 High). On the downside, support is seen at 1.1187 (May 1 Low) a break below could drag it till 1.1140 (April 24 Low).

USD/JPY: The dollar declined, hovering towards a 3-month trough hit in the prior session, as U.S. and China appeared at a deadlock over trade negotiations after Washington demanded promises of concrete changes to Chinese law, while Beijing remained defiant. The major was trading 0.2 percent down at 109.77, having hit a low of 109.47 on Friday, its lowest since Feb. 4. FxWirePro's Hourly Yen Strength Index stood at -45.64 (Neutral) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of speeches by Fed's Rosengren and Clarida. Immediate resistance is located at 110.32 (38.2% retracement of 111.68 and 109.47), a break above targets 110.84 (61.8% retracement). On the downside, support is seen at 109.47 (May 9 Low), a break below could take it lower at 109.13 (Jan. 29 Low).

GBP/USD: Sterling consolidated within narrow ranges, as traders remained doubtful Prime Minister Theresa May can reach a deal with the opposition on how to leave the European Union. The major traded flat at 1.3007, having hit a low of 1.2967 on Thursday; it’s lowest since Apr. 30. FxWirePro's Hourly Sterling Strength Index stood at -131.27 (Highly Bearish) 0500 GMT. Immediate resistance is located at 1.3049 (Apr. 30 High), a break above could take it near 1.3102 (May 1 High). On the downside, support is seen at 1.2976 (Mar. 29 Low), a break below targets 1.2923 (Apr. 30 Low). Against the euro, the pound was trading flat at 86.31 pence, having hit a low of 86.48 on Thursday, it’s lowest since Apr. 30.

AUD/USD: The Australian dollar tumbled, as the trade conflict escalated, with the United States raising tariffs on $200 billion worth of Chinese goods and China vowed to retaliate. The Aussie trades 0.4 percent down at 0.6973, having hit a low of 0.6962 last week, it’s lowest since Jan. 3. FxWirePro's Hourly Aussie Strength Index stood at 3.80 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6950, a break below targets 0.6921. On the upside, resistance is located at 0.7069 (Apr. 30 High), a break above could take it near 0.7110 (Mar. 19 High).

NZD/USD: The New Zealand dollar eased, after rising for two straight sessions, amid growing anxiety over whether the United States and China will be able to salvage a trade deal. The Kiwi trades 0.3 percent down at 0.6579, having touched a low of 0.6525 on Wednesday, its lowest level Nov. 1. FxWirePro's Hourly Kiwi Strength Index was at -74.76 (Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6653 (May 3 High), a break above could take it near 0.6694 (Apr. 19 High). On the downside, support is seen at 0.6514 (Nov. 1 Low), a break below could drag it below 0.6474 (Oct. 4 Low).

Equities Recap

Asian shares tumbled as a deadlock in U.S.-China trade talks and uncertainty over a deal sent investors seeking safety in safe-haven assets.

MSCI's broadest index of Asia-Pacific shares outside Japan slumped 0.5 percent.

Tokyo's Nikkei fell 0.7 percent to 21,191.28 points, Australia's S&P/ASX 200 index declined 0.2 percent to 6,297.60 points and South Korea's KOSPI plunged 1.4 percent to 2,078.20 points.

Shanghai composite index eased 1.5 percent to 2,896.56 points, while CSI 300 index traded 2.4 percent down at 3,659.52 points. Taiwan shares added 1.4 percent to 10,558.29 points

Commodities Recap

Crude oil prices rose, despite investors fretted over global economic growth prospects amid a standoff in U.S.-China trade talks. International benchmark Brent crude was trading 0.1 percent higher at $70.79 per barrel by 0451 GMT, having hit a low of $68.82 last week, its lowest since Apr, 3. U.S. West Texas Intermediate was trading 0.1 percent down at $61.59 a barrel, after falling as low as $60.02 last week, its lowest since the Mar, 29.

Gold prices declined, reversing most of its previous session gains as the greenback steadied after falling to multi-week lows in the previous session. Spot gold was 0.2 percent down at $1,283.84 per ounce by 0454 GMT, having touched a high of $1,291.36 on Wednesday, its highest since Apr. 15. U.S. gold futures slipped 0.2 percent to $1,284.40 an ounce.

Treasuries Recap

The U.S. benchmark 10-year Treasury note yield inched down to 2.437 percent.

The Japanese government bond prices gained, with the benchmark 10-year JGB yield dropping half-a-basis point to minus 0.055 percent, while the 20-year yield also declined by half-a-basis point to 0.360 percent.

The yields on Australian three-year bonds were at 1.26 percent, just above record lows. Three-year bond futures were up 1 tick at 98.750, while the 10-year contract rose 1 tick to 98.2700.

The yields on New Zealand government bonds were down 1 to 2 ticks across the curve.

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June 18 23:50 UTC Released

JPTrade Balance Total Yen

Actual

-967.1 Bln JPY

Forecast

-979.2 Bln JPY

Previous

60.4 Bln JPY

June 18 23:50 UTC Released

JPImports YY

Actual

-1.5 %

Forecast

0.2 %

Previous

6.4 %

January 31 00:00 UTC 725842725842m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 725842725842m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 22 19:00 UTC 737662737662m

ARTrade Balance

Actual

Forecast

Previous

-1541 %

January 31 00:00 UTC 725842725842m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 22 19:00 UTC 737662737662m

ARTrade Balance

Actual

Forecast

Previous

-1541 %

January 31 00:00 UTC 725842725842m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 725842725842m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 725842725842m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

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