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Asia Roundup: Antipodeans rebound, greenback at 2-week lows as soft U.S. payroll report dents Fed tightening outlook; investors eye UK GDP - Monday, December 10th, 2018

Market Roundup

  • U.S. says March 1 'hard deadline' for trade deal with China
     
  • Trump's top choice for chief of staff not taking job; other candidates in running
     
  • Huawei CFO seeks bail on health concerns; Canada wants her in jail
     
  • UK PM May presses on with Brexit vote as lawmakers demand better deal
     
  • Macron prepares response to 'yellow vest' protesters as Paris cleans up
     
  • China's Nov export, import growth shrinks, showing weak demand
     
  • China's November PPI up 2.7 pct y/y, CPI up 2.2 pct y/y
     
  • Australian home loans jump as RBA sticks to rate hike call
     
  • Japan Q3 GDP Rev QQ Annualised, -2.5%, -1.9% f'cast, -1.2% prev
     
  • Japan Q3 GDP Revised QQ, -0.6%, -0.5% f'cast, -0.3% prev
     
  • Japan Oct Current Account NSA JPY, 1,309.9 bln, 1,384.2 bln f'cast, 1,821.6 bln prev
     

Economic Data Ahead

  • (0200 ET/0700 GMT) Germany Oct Trade Balance, EUR, SA, 17.7 bln f’cast, 17.6 bln prev
     
  • (0430 ET/0930 GMT) Great Britain Oct GDP Estimate MM , 0.1% f’cast, 0.0% prev
     
  • (0430 ET/0930 GMT) Great Britain Oct GDP Estimate YY, 1.6% f’cast, 1.5% prev
     
  • (0430 ET/0930 GMT) Great Britain Oct Industrial Output YY, -0.2% f’cast, 0.0% prev
     
  • (0430 ET/0930 GMT) Great Britain Oct Manufacturing Output YY, 0.0% f’cast, 0.5% prev
     
  • (0430 ET/0930 GMT) Great Britain Oct Goods Trade Balance GBP, -10.50 bln f’cast, -9.73 bln prev
     
  • (0430 ET/0930 GMT) Great Britain Oct Goods Trade Bal. Non-EU, -3.15 bln f’cast, -2.34 bln prev
     
  • (0430 ET/0930 GMT) EZ Dec Sentix Index, 8.1 f’cast, 8.8 prev
     

Key Events Ahead

  • (0715 ET/1215 GMT) ECB's Ignazio Angeloni participates in a discussion organized by Official Monetary and Financial Institutions Forum, London

FX Beat

DXY: The dollar index slumped to an over 2-week low, as St. Louis Federal Reserve Bank President James Bullard repeated his call for the central bank to pause its current cycle of interest rate increases. The greenback against a basket of currencies trades 0.3 percent down at 96.46, having touched a low of 96.36, its lowest since Nov 22. FxWirePro's Hourly Dollar Strength Index stood at -11.66 (Neutral) by 0500 GMT.

EUR/USD: The euro rose to a 3-week peak, as the greenback eased after U.S. non-farm payrolls increased by 155,000 jobs last month, below a forecast of 200,000 jobs and the wage rise was softer than expected. The European currency traded 0.3 percent up at 1.1429, having touched a high of 1.1442, its highest since Nov. 20. FxWirePro's Hourly Euro Strength Index stood at 83.38 (Slightly Bullish) by 0500 GMT. Investors’ attention will remain on German current account and EZ Sentix investor confidence, ahead of the U.S. JOLTS openings. Immediate resistance is located at 1.1455 (November 2 High), a break above targets 1.1472 (November 20 High). On the downside, support is seen at 1.1348 (November 29 Low), a break below could drag it till 1.1305 (November 30 Low).

USD/JPY: The slumped to a near 1-1/2 month low, as disappointing U.S. jobs data stoked speculation that the Federal Reserve may stop raising interest rates sooner than expected. On Friday, Federal Reserve Governor Lael Brainard stated that the economic picture was broadly positive but that risks were growing overseas and in the U.S. corporate debt markets. The major was trading 0.2 percent down at 112.42, having hit a low of 112.23 earlier, its lowest since October 29. FxWirePro's Hourly Yen Strength Index stood at -24.42 (Neutral) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. JOLTS openings. Immediate resistance is located at 113.01 (November 23 High), a break above targets 113.23 (November 22 High). On the downside, support is seen at 112.08 (October 24 Low), a break below could take it lower 111.82 (October 25 Low).

GBP/USD: Sterling rebounded from a 4-day low, amid concerns whether May can secure a majority for her Brexit deal in a vote on December 11 that will define Britain's departure from the European Union scheduled for March. The major traded 0.2 percent up at 1.2749, having hit a low of 1.2701 earlier; it’s lowest since December 5. FxWirePro's Hourly Sterling Strength Index stood at -10.70 (Neutral) 0500 GMT. Investors’ attention will remain on UK industrial prod., manufacturing prod., trade balance, gross domestic product, and European Court of Justice ruling on Article 50, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2809 (November 30 High), a break above could take it near 1.2884 (November 19 High). On the downside, support is seen at 1.2671 (December 5 Low), a break below targets 1.2640. Against the euro, the pound was trading 0.3 percent down at 89.71 pence, having hit a low of 89.74, it’s lowest since September 25.

AUD/USD: The Australian dollar retreated from a near 1-month low on speculation the Federal Reserve might almost be done hiking rates. The Aussie trades 0.3 percent up at 0.7223, having hit a low of 0.7178; it’s lowest since November 13. FxWirePro's Hourly Aussie Strength Index stood at -85.69 (Slightly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7164 (November 13 Low), a break below targets 0.7141 (September 17 Low). On the upside, resistance is located at 0.7268 (November 22 High), a break above could take it near 0.7325 (November 19 High).

NZD/USD: The New Zealand dollar bounced back after falling to an over 1-week low, as Fed policymakers struck a cautious tone about the economic outlook, possibly flagging a turning point in its monetary policy. The Kiwi trades 0.6 percent up at 0.6900, having touched a low of 0.6840, its lowest level Nov 29. FxWirePro's Hourly Kiwi Strength Index was at -111.02 (Highly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6976 (June 15 High), a break above could take it near 0.7023 (May 31 High). On the downside, support is seen at 0.6816 (November 9 Low), a break below could drag it below 0.6753 (November 27 Low).

Equities Recap

Asian shares slumped amid growing worries over slowing growth and concerns that tensions between Washington and Beijing could reduce the chances of a trade deal.

MSCI's broadest index of Asia-Pacific shares outside Japan traded skidded 0.8 percent.

Tokyo's Nikkei declined 2.1 percent to 21,219.50 points, Australia's S&P/ASX 200 index plunged 2.3 percent to 5,552.50 points and South Korea's KOSPI eased 1.2 percent to 2,051.75 points.

Shanghai composite index fell 0.8 percent to 2,584.56 points, while CSI300 index traded 1.2 percent down at 3,146.52 points.

Hong Kong’s Hang Seng traded 1.4 percent lower at 25,705.12 points. Taiwan shares shed 1.2 percent to 9,647.54 points.

Commodities Recap

Crude oil prices surged, extending previous session gains as producer cartel OPEC and some non-affiliated producers agreed a supply cut of 1.2 million barrels per day (bpd) from January. International benchmark Brent crude was trading 1.0 percent down at $61.97 per barrel by 0507 GMT, having hit a high of $63.67 on Friday, its highest since November 22. U.S. West Texas Intermediate was trading 0.6 percent up at $52.50 a barrel, after rising as high as $54.20 on Friday, its highest since the December 5.

Gold prices rose to a 5-month peak, supported by a disappointing U.S. jobs data that stoked speculation that the Federal Reserve may stop raising interest rates sooner than expected. Spot gold was trading 0.1 percent at $1,248.99 per ounce by 0513 GMT, having touched a high of $1,250.46 on Monday, its highest level since July 11. U.S. gold futures were up 0.2 percent at $1,254.6 per ounce.

Treasuries Recap

The Japanese government bonds slumped on the first trading day of the week after the country’s economic growth for the third quarter of this year worsened, disappointing market participants and investors will now remain focused on Japan’s 3-year auction, scheduled to be held on December 11 by 03:35GMT for further direction in the debt market. The yield on the benchmark 10-year JGB note, which moves inversely to its price, slumped 20 basis points to 0.041 percent, the yield on the long-term 30-year note fell 6 basis points to 0.794 percent and the yield on short-term 2-year dipped 3 basis points to -0.143 percent.

The Australian bonds gained across the curve during Asian session as risk appetites softened further amid ongoing tensions regarding the Huawei issue and disappointing U.S. jobs data on Friday night. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, fell 2-1/2 basis points to 2.430 percent (lowest since June 2017), the yield on the long-term 30-year bond also dipped 2-1/2 basis points to 2.962 percent and the yield on short-term 3-year down 1-1/2 basis points to 1.919 percent.

The New Zealand 10-year yields dropped to their lowest since October 2016 at 2.455 percent.

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March 20 14:00 UTC Released

RUReal Wages YY

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0.7 %

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0.2 %

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RUUnemployment Rate

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4.9 %

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4.9 %

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4.9 %

January 31 00:00 UTC 595569595569m

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January 22 19:00 UTC 607389607389m

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-1541 %

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-1541 %

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2016 bln ARS

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