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Asia Roundup: Antipodeans near multi-week lows, dollar index at 2-week peak on higher U.S. Treasury yields, Asian shares trade in red - Friday, February 9th, 2018

Market Roundup

  • U.S. federal shutdown at hand after fiscal hawk's dissent
     
  • China Jan PPI YY, 4.3% vs 4.9%, f'cast 4.4%
     
  • China Jan CPI YY, 1.5% vs 1.8%, f'cast 1.5%
     
  • China Jan CPI MM, 0.6% vs 0.3%, f'cast 0.7%
     
  • China c.bank releases nearly 2 trln yuan in temporary liquidity
     
  • Australia's central bank trims unemployment forecast, rate hike not on horizon
     
  • Australia Dec Housing finance, -2.3% vs 2.1%, f'cast -1.1%
     
  • Fed's George says fiscal stimulus means rate hikes important
     
  • Investors withdraw record $23.9 bln from U.S.-based stock funds -Lipper
     
  • Foreign CB US debt holdings +$21.246 bln to $3.387 trln Feb 7 week
     
  • Treasuries +$19.942 bln to $3.045 trln, agencies $1.19 bln to $262.406 bln

Economic Data Ahead

  • (0430 ET/0930 GMT) Great Britain Dec Construction O/P vol MM, 0.0% f.cast, 0.4% prev
     
  • (0430 ET/0930 GMT) Great Britain Dec Construction O/P vol YY, -1.4% f.cast, 0.4% prev
     
  • (0430 ET/0930 GMT) Great Britain Dec Industrial output MM, -0.9% f'cast, 0.4% prev
     
  • (0430 ET/0930 GMT) Great Britain Dec Industrial output YY, 0.3% f'cast, 2.5% prev
     
  • (0430 ET/0930 GMT) Great Britain Dec Manufacturing output MM, 0.3% f'cast, 0.4% prev
     
  • (0430 ET/0930 GMT) Great Britain Dec Manufacturing output YY, 1.2% f'cast, 3.5% prev
     
  • (0430 ET/0930 GMT) Great Britain Dec Goods Trade Balance Non EU, -4.10 bln f'cast, -4.68 bln prev
     
  • (0430 ET/0930 GMT) Great Britain Dec Goods Trade Balance (GBP), -11.60 bln f'cast, -12.23 bln prev
     

Key Events Ahead

  • (0605 ET/1105 GMT) Great Britain Stg 500 mln/500 mln/2.0 bln for 1/3/6 month auctions
     
  • (0700 ET/1200 GMT) Riksbank general council meeting in Stockholm
     
  • (1145 ET/1645 GMT) BOE Deputy Governor Jon Cunliffe speaks in California

FX Beat

DXY: The dollar index steadied after rising to a 2-week high in the previous session, as the U.S. Treasury yields approached again multi-year highs.  The greenback against a basket of currencies traded flat at 90.28, having touched a high of 90.57 on Thursday, its highest since Jan. 23. FxWirePro's Hourly Dollar Strength Index stood at 91.47 (Slightly Bullish) by 0500 GMT.

EUR/USD: The euro steadied after falling to a 3-week low in the previous session, as the greenback rose to a 2-week peak on higher U.S. Treasuries yields. The European currency traded 0.05 percent up at 1.2251, having touched a low of 1.2212 the day before, its lowest since Jan. 19. FxWirePro's Hourly Euro Strength Index stood at -114.75 (Highly Bearish) by 0500 GMT. Immediate resistance is located at 1.2330 (61.8% retracement of 1.2523 and 1.2212), a break above targets 1.2384 (10-DMA). On the downside, support is seen at 1.2212 (Previous Session Low), a break below could drag it lower 1.2200.

USD/JPY: The dollar rebounded after falling to a 3-day low as the U.S. Treasury yields rose, with the 10-year U.S. Treasuries yield hovering at its four-year high. The major was trading 0.2 percent up at 108.91, having hit a high of 110.48 last week, its highest since Jan. 23. FxWirePro's Hourly Yen Strength Index stood at 91.47 (Slightly Bullish) by 0500 GMT.  Investors’ will continue to track broad-based market sentiment, ahead of the U.S. wholesale inventories for further momentum. Immediate resistance is located at 109.36 (5-DMA), a break above targets 109.90 (21-DMA). On the downside, support is seen at 108.45, a break below could take it lower 108.00.

GBP/USD: Sterling steadied above the 1.3900 handle after the Bank of England said interest rates probably needed to rise sooner and by a bit more than it had previously expected because of the strength of the global economy.  The major traded 0.1 percent up at 1.3925, having hit a low of 1.3836 on Tuesday, it’s lowest since Jan 18.  Investors’ focus will remain on the UK industrial and manufacturing production, and trade balance data, ahead of the U.S. fundamental drivers. FxWirePro's Hourly Sterling Strength Index stood at -25.18 (Neutral) by 0500 GMT. Immediate resistance is located at 1.4064 (10-DMA), a break above could take it near 1.4150. On the downside, support is seen at 1.3848, a break below targets 1.3900. Against the euro, the pound was trading 0.05 percent up at 87.97 pence, having hit a low of 89.10 pence on Tuesday, it’s lowest since Jan. 17.

AUD/USD: The Australian dollar slumped to an over 1-month low after Reserve Bank of Australia saw unemployment falling a little faster than expected but still doubted core inflation to reach the floor of its 2-3 percent target band until mid-2019. The Aussie trades flat at 0.7779, having hit a low of 0.7759 earlier; it’s lowest since Dec. 27. FxWirePro's Hourly Aussie Strength Index stood at -127.78 (Highly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7759 (Session Low), a break below targets 0.7705. On the upside, resistance is located at 0.7860 (5-DMA), a break above could take it near 0.7900.

NZD/USD: The New Zealand dollar consolidated near recent lows on expectations that the Reserve Bank of New Zealand would keep interest rates at a record low well into next year largely due to tepid inflation. The Kiwi trades 0.05 percent down at 0.7215, having touched a low of 0.7176 the day before, its lowest level since Jan. 10. FxWirePro's Hourly Kiwi Strength Index was at -43.21 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7242 (5-DMA), a break above could take it near 0.7313 (10-DMA). On the downside, support is seen at 0.7176 (Session Low), a break below could drag it near 0.7100.

Equities Recap

Asian shares slumped after Wall Street shares dropped again, while the greenback rose against a basket of currencies following a rise in the U.S. Treasury yields.

MSCI's broadest index of Asia-Pacific shares outside Japan dropped 2.3 percent to a two-month low.

Tokyo's Nikkei declined 2.8 percent to 21,288.37 points, Australia's S&P/ASX 200 index lost 0.9 percent to 5,838.00 points and South Korea's KOSPI tumbled 1.7 percent to 2,416.68 points.

Shanghai composite index fell 5.9 percent to 3,070.41 points, while CSI300 index was trading 6.0 percent down at 3,773.22 points.

Hong Kong’s Hang Seng was trading 3.7 percent lower at 29,306.23 points. Taiwan shares shed 1.5 percent to 10,371.75 points.

Commodities Recap

Crude oil prices steadied after falling to multi-week lows in the previous session on Iran's announcement to boost production and as U.S. crude output hit record highs.  International benchmark Brent crude was trading 0.2 percent up at $64.35 per barrel by 0427 GMT, having hit a low of $64.08 the day before, its lowest since Dec. 21. U.S. West Texas Intermediate was trading 0.2 percent up at $60.52 a barrel, after falling as low as $60.26 on Thursday, its weakest since Jan. 5.

Gold prices eased after falling to a 4-week low in the previous session on a firmer dollar and worries about rising global interest rates. Spot gold was trading 0.1 percent down at $1,317.06 an ounce, at 0437 GMT, having hit a low of 1,306.96 on Thursday, lowest since Jan 14. U.S. gold futures were up 0.1 percent at $1,319.60 per ounce.

Treasuries Recap

The 10-year U.S Treasury yield stood at 2.831 percent lower by 0.018 bps, while 5-year yield was 0.021 bps down at 2.546 percent.

The Japanese government bonds remained slightly on the upside in a muted trading session that witnessed little data of major economic significance, as China’s trade surplus narrowed in January, thus leading to higher demand for safe-haven assets worldwide. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slipped 1/2 basis point to 0.07 percent, the yield on the long-term 30-year note fell 1 basis point to 0.81 percent and the yield on short-term 2-year too remained tad lower at -0.14 percent.

The Australian bonds jumped on the last trading day of the week as investors covered in short positions after the Reserve Bank of Australia’s (RBA) monetary policy statement cited inflation concerns. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 2 basis points to 2.84 percent, the yield on the long-term 30-year note dipped 2-1/2 basis points to 3.47 percent and the yield on short-term 2-year slid 4 1 basis points to 1.97 percent.

The New Zealand government bonds ended Friday’s session on a higher note as investors flocked into safe-haven instruments in a mild trading session that witnessed data of least economic significance. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, slipped 1 basis point to 2.97 percent, the yield on 20-year also fell 1 basis point to 3.48 percent and the yield on short-term 2-year slumped 2 basis points to 1.86 percent.

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November 16 21:00 UTC Released

UST Flows,Incl.Swaps

Actual

16.7 Bln USD

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Previous

111.5 Bln USD

November 16 21:00 UTC Released

USOverall Net Capital Flows

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-29.1 Bln USD

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108.2 Bln USD

January 31 00:00 UTC 419383419383m

ARAnnual Primary Balance*

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2016 bln ARS

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January 31 00:00 UTC 419383419383m

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2016 bln ARS

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January 22 19:00 UTC 431203431203m

ARTrade Balance

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-1541 %

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2016 bln ARS

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Bln AR bln ARS

January 22 19:00 UTC 431203431203m

ARTrade Balance

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-1541 %

January 31 00:00 UTC 419383419383m

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2016 bln ARS

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Bln AR bln ARS

January 31 00:00 UTC 419383419383m

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2016 bln ARS

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Bln AR bln ARS

January 31 00:00 UTC 419383419383m

ARAnnual Primary Balance*

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2016 bln ARS

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