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Asia Roundup: Antipodeans rebound, dollar steadies against yen as broader sentiment stabilize, investors eye German ZEW survey - Tuesday, May 14th, 2019

Market Roundup

  • China, U.S. have 'wisdom' to resolve trade dispute, says senior diplomat
     
  • Cellphones and laptops on latest USTR China tariff list, drugs excluded
     
  • Japan Finmin Aso: Sino-US trade war won't trigger economic crisis
     
  • China stocks, currency weaker on trade war escalation, state buying seen
     
  • Saudi oil tankers among those attacked off UAE amid Iran tensions
     
  • Fed officials see risks in weaker inflation expectations, trade row
     
  • Australia business conditions ease in April, employment softens-NAB survey
     
  • N.Korea says ship seizure by U.S. violates spirit of Trump-Kim summit
     
  • Japan Mar Current Account NSA JPY, 2,847.9 bln, 3,161.3 bln f'cast, 2,676.8 bln prev
     

Economic Data Ahead

  • (0430 ET/0830 GMT) Great Britain Apr Claimant Count Unem Chng, 28.3k prev
     
  • (0430 ET/0830 GMT) Great Britain Mar ILO Unemployment Rate, 3.9% f'cast, 3.9% prev
     
  • (0500 ET/0900 GMT) Germany May ZEW Economic Sentiment, 5.0 f'cast, 3.1 prev
     
  • (0500 ET/0900 GMT) Germany May ZEW Current Conditions, 6.0 f'cast, 5.5 prev
     
  • (0500 ET/0900 GMT) EU Mar Industrial Production YY, -0.8% f'cast, -0.3% prev
     

Key Events Ahead

  • (0400 ET/0800 GMT) Nick Strange of BoE speaks at 21st Annual Operational Risk Europe Conference in London
     
  • (0440 ET/0840 GMT) Riksbank Governor Stefan Ingves talks about the economic situation and current monetary policy at conference in Stockholm
     
  • (0835 ET/1235 GMT) David Rule of BoE speaks at the Association for British Insurers' Prudential Regulation Seminar 2019 in London
     
  • (1100 ET/1500 GMT) New York FRB issues Q1 2019 Household Debt and Credit Report in New York
     
  • (1245 ET/1645 GMT) Kansas City Fed President Esther George speaks before the Economic Club of Minnesota
     

FX Beat

DXY: The dollar index consolidated near a 3-1/2 week low hit in the prior session after China announced on Monday it will impose tariffs on more than 5,000 US products worth $60 billion, starting on June 1.  The greenback against a basket of currencies traded 0.05 percent down at 97.31, having touched a low of 97.03 on Monday, its lowest since May 1. FxWirePro's Hourly Dollar Strength Index stood at -36.22 (Neutral) by 0400 GMT.

EUR/USD: The euro rose, hovering towards a 2-week peak in the previous session, as investor shifted focus on eurozone industrial production for March and Germany's ZEW economic sentiment index for May. The European currency traded 0.2 percent up at 1.1239, having touched a high of 1.1263 on Monday, its highest since May 1. FxWirePro's Hourly Euro Strength Index stood at 136.98 (Highly Bullish) by 0400 GMT. Investors’ attention will remain on German ZEW survey and EZ industrial production, ahead of the U.S. import and export price index; and speeches by Fed's William and George. 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 rebounded after falling to a 3-month low in the previous session, as broader sentiment stabilized after U.S. President Donald Trump stated that he expected U.S.-China trade negotiations to be successful. The major was trading 0.3 percent up at 109.64, having hit a low of 109.01 on Monday, its lowest since Feb. 1. FxWirePro's Hourly Yen Strength Index stood at -32.31 (Neutral) by 0400 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. import and export price index; and speeches by Fed's William and George. Immediate resistance is located at 110.04 (38.2% retracement of 111.68 and 109.01), a break above targets 110.67 (61.8% retracement). On the downside, support is seen at 109.01 (May 14 Low), a break below could take it lower at 108.49 (Jan. 31 Low).

GBP/USD: Sterling steadied after falling to a 2-week low in the prior session after a newspaper report suggested the British parliament might still reach a cross-party deal on Brexit, however, doubts about such an agreement limited the upside. The major traded flat at 1.2959, having hit a low of 1.2940 on Monday; it’s lowest since Apr. 30. FxWirePro's Hourly Sterling Strength Index stood at -90.38 (Slightly Bearish) 0400 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 1.2923 (Apr. 30 Low), a break below targets 1.2865 (Apr. 25 Low). Against the euro, the pound was trading 0.2 percent down at 86.73 pence, having hit a low of 86.80 on Monday, it’s lowest since Apr. 23.

AUD/USD: The Australian dollar bounced back from a 4-1/2 month low after Trump said he would meet with Chinese President Xi Jinping at a G20 summit next month. The Aussie trades 0.1 percent up at 0.6952, having hit a low of 0.6940 earlier, it’s lowest since Jan. 3. FxWirePro's Hourly Aussie Strength Index stood at -85.68 (Slightly Bearish) by 0400 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6921, a break below targets 0.6900. On the upside, resistance is located at 0.6997 (May 9 High), a break above could take it near 0.7069 (Apr. 30 High).

NZD/USD: The New Zealand dollar retreated from a near 1-week low hit in the previous session, as broader sentiment stabilized after Trump said he would meet with Chinese President Xi Jinping at a G20 summit next month. The Kiwi trades 0.2 percent up at 0.6582, having touched a low of 0.6525 on Wednesday, its lowest level Nov. 1. FxWirePro's Hourly Kiwi Strength Index was at -7.52 (Neutral) by 0400 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 after China announced it would impose higher tariffs on $60 billion of U.S. goods following Washington's decision last week to hike its own levies on $200 billion in Chinese imports.

MSCI's broadest index of Asia-Pacific shares outside Japan tumbled 0.9 percent.

Tokyo's Nikkei declined 0.6 percent to 21,067.23 points, Australia's S&P/ASX 200 index plunged 0.9 percent to 6,239.90 points and South Korea's KOSPI surged 0.3 percent to 2,084.34 points.

Shanghai composite index fell 0.2 percent to 2,897.44 points, while CSI 300 index traded 0.1 percent down at 3,664.81 points.

Hong Kong’s Hang Seng traded 1.6 percent lower at 28,093.68 points. Taiwan shares shed 0.4 percent to 10,519.25 points

Commodities Recap

Crude oil prices rose after rising to a 2-week in the previous session, however, gains were limited amid an escalation in the trade war between the United States and China. International benchmark Brent crude was trading 0.8 percent higher at $70.44 per barrel by 0425 GMT, having hit a high of $72.56 on Monday, its highest since Apr, 30. U.S. West Texas Intermediate was trading 0.7 percent up at $61.23 a barrel, after rising as high as $63.32 on Monday, its highest since the May 2.

Gold prices rallied to a 1-month high as an escalation in U.S.-China trade war sent investors looking for safe-haven assets. Spot gold was trading at $1,299.29 by 0431 GMT, having touched a high of $1,303.21, its highest since Apr. 11. U.S. gold futures were down 0.2 percent at $1,299.20.

Treasuries Recap

The long-dated Japanese government bond prices firmed, with the benchmark 10-year JGB yield easing half-a-basis point to minus 0.055 percent, while the 20-year yield shed 1 basis point to 0.360 percent. The 30-year and 40-year yields each fell half-a-basis point to 0.535 percent and 0.560 percent, respectively.

The Australian government bond futures firmed, with the three-year bond contract up 2 ticks at 98.770. The 10-year contract rose 2.5 ticks to 98.2900.

The New Zealand government bonds were well bid, with two-year yields not far from record lows at 1.425 percent.

The Canadian government bond prices were higher across a flatter yield curve. The 10-year rose 68 Canadian cents to yield 1.661 percent. The 10-year yield dropped 7.2 basis points more than the yield on the 3-month T-bill to leave a spread of 1.4 basis points in favor of the shorter-dated maturity, as the curve inverted.

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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 725856725856m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 725856725856m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 22 19:00 UTC 737676737676m

ARTrade Balance

Actual

Forecast

Previous

-1541 %

January 31 00:00 UTC 725856725856m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 22 19:00 UTC 737676737676m

ARTrade Balance

Actual

Forecast

Previous

-1541 %

January 31 00:00 UTC 725856725856m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 725856725856m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 725856725856m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

Close

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