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Asia Roundup: Antipodeans gain on stronger than expected Chinese data, greenback consolidates near 10-day low on Fed rate cut expectations, Asian shares surge - Monday, July 15th, 2019

Market Roundup

  • Gold dips as encouraging Chinese data stokes risk-on sentiment
     
  • Oil prices edge lower as China's GDP growth slows
     
  • China’s economic growth slowed to 6.2% in the second quarter,  its weakest pace in at least 27 years
     
  • China’s June industrial output climbed 6.3% from a year earlier, beating a 5.2% forecast
     
  • China's January-June fixed-asset investment rose 5.8% from the same period last year
     
  • China's retail sales jumped 9.8% - the fastest clip since March 2018

Economic Data Ahead

  • No major economic data releases

Key Event Ahead

  • No significant event scheduled

FX Beat

DXY: The dollar index consolidated near a 10-day low, still weighed down by last week's comments from Fed Chair Jerome Powell and Chicago Fed president Charles Evans indicating U.S. rate cuts are needed to boost inflation. The greenback against a basket of currencies traded 0.1 percent up at 96.79, having touched a high of 97.59 on Tuesday, its highest since June 19.

EUR/USD: The euro edged up, extending gains for the fourth straight session, despite a broad greenback rebound following last week’s declines. However, the upside in the major appears limited amid increased odds of the European Central Bank rolling out monetary stimulus once again by either cutting interest rates or restarting the QE program. The European currency traded 0.05 percent up at 1.1273, having touched a high of 1.1286 on Thursday, its highest since July 5.  Investors’ attention will remain on the New York empire state manufacturing index, amid a lack of economic data from the Eurozone docket. Immediate resistance is located at 1.1304 (50.0% retracement of 1.1412 and 1.1193), a break above targets 1.1366 (78.6% retracement). On the downside, support is seen at 1.1207 (July 5 Low), a break below could drag it below 1.1181 (June 18 Low).

USD/JPY: The dollar rebounded from a 10-day low, as investors’ sentiment for riskier assets improved after data showed China’s June industrial output climbed 6.3 percent from a year earlier, surpassing a 5.2 percent forecast, while January-June fixed-asset investment rose 5.8 percent from the same period last year, beating a 5.5 percent increase forecast. The pair was trading 0.1 percent up at 108.03, having hit a low of 107.79 earlier, its lowest since July 5. Investors’ will continue to track the broad-based market sentiment, ahead of the New York empire state manufacturing index. Immediate resistance is located at 108.48 (5-DMA), a break above targets 108.80 (July 8 High). On the downside, support is seen at 107.64 (June 27 Low), a break below could take it lower at 107.10 (June 26 Low).

GBP/USD: Sterling eased, halting a 3-day rally as the British politicians continued to favor Boris Johnson in the race of the Prime Minister even if he remains ready to trigger hard Brexit. The major eased 0.05 percent to 1.2567, having hit a high of 1.2578 earlier, it’s highest since July 5. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2611 (50.0% retracement of 1.2783 and 1.2439), a break above could take it near 1.2652 (61.8% retracement). On the downside, support is seen at 1.2499 (July 8 Low), a break below targets 1.2439 (July 9 Low). Against the euro, the pound was trading 0.1 percent down at 89.67 pence, having hit a high of 89.55 earlier, it’s highest since Jul. 9.

AUD/USD: The Australian dollar rose to an 11-day peak as Chinese upbeat June factory output and retail sales offered signs of improvement. However, data showing China’s economic growth slowed to 6.2 percent in the second quarter, its weakest pace in at least 27 years limited the upside. The Aussie trades 0.2 percent up at 0.7029, having hit a high of 0.7035 earlier, it’s highest since July 4. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6941 (June 25 Low), a break below targets 0.6901 (June 13 Low). On the upside, resistance is located at 0.7047 (July 4 High), a break above could take it near 0.7076 (Mar 11 High).

NZD/USD: The New Zealand dollar advanced to a 2-week high on stronger-than-expected economic data from China, indicating that measures to revive spending in the Chinese economy are working. China’s industrial output bounced in June from a 17-year low in the previous month, while June retail sales surged 9.8 percent from a year earlier. The Kiwi trades 0.4 percent up at 0.6717, having touched a high of 0.6722 earlier, its highest level July 1. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6758 (Apr. 8 High), a break above could take it near 0.6782 (Apr. 15 High). On the downside, support is seen at 0.6643 (5-DMA), a break below could drag it below 0.6602 (July 5 Low).

Equities Recap

Asian shares rallied after Chinese June activity data showed industrial production, retail sales and fixed-asset investment all beat forecasts, indicating that Beijing’s earlier growth-boosting efforts may be starting to have an effect.

MSCI's broadest index of Asia-Pacific shares outside Japan egdged up 0.1 percent.

Australia's S&P/ASX 200 index eased 0.7 percent to 6,653.00 points and South Korea's KOSPI declined 0.2 percent to 2,082.48 points.

Shanghai composite index gained 0.4 percent to 2,942.19 points, while CSI 300 index traded 0.4 percent up at 3,824.19 points.

Hong Kong’s Hang Seng traded 0.2 percent higher at 28,537.90 points. Taiwan shares added 0.5 percent to 10,876.43 points.

Commodities Recap

Crude oil prices declined after China posted its slowest quarterly economic growth in at least 27 years, stoking concerns about demand in the world’s largest crude oil importer. International benchmark Brent crude was trading 0.5 percent lower at $66.50 per barrel by 0540 GMT, having hit a high of $67.63 on Thursday, its highest since May 30. U.S. West Texas Intermediate was trading 0.6 percent up at $59.94 a barrel, after rising as high as $60.91 on Thursday, its highest since the May 23.

Gold prices plunged as key China data eased concerns about global economic slowdown and boosted appetite for riskier assets. Spot gold was 0.2 percent down at $1,412.16 per ounce by 0543 GMT, having touched a high of $1,427.06 on Thursday, its highest since July 3. U.S. gold futures were up 0.1 percent at $1,413 an ounce.

Treasuries Recap

The Australian government bonds remained flat during Asian session of the first trading day of the week, amid a muted session ahead of the Reserve Bank of Australia’s (RBA) July monetary policy meeting minutes, scheduled to be released on July 16 by 01:30GMT and the country’s employment data for the month of June, due on July 18 for further direction in the debt market. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, hovered around 1.462 percent, the yield on the long-term 30-year bond surged 1-1/2 basis points to 2.121 percent and the yield on short-term 2-year traded nearly flat at 1.008 percent.

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July 2 15:00 UTC Released

DKCurrency Reserves

Actual

449.6 Stale

Forecast

Previous

451.7 Stale

July 2 13:45 UTC Released

USISM NY Biz Conditions

Actual

50 %

Forecast

Previous

48.6 %

January 31 00:00 UTC 820358820358m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 820358820358m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 22 19:00 UTC 832178832178m

ARTrade Balance

Actual

Forecast

Previous

-1541 %

January 31 00:00 UTC 820358820358m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 22 19:00 UTC 832178832178m

ARTrade Balance

Actual

Forecast

Previous

-1541 %

January 31 00:00 UTC 820358820358m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 820358820358m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 820358820358m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

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