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Asia Roundup: Antipodeans steady as China cuts repo rate, dollar rallies against yen on optimism over U.S.-China trade deal, Asian shares nudge higher - Monday, November 18th, 2019

Market Roundup

  • Gold eases on U.S.-China trade deal optimism
     
  • Oil prices steady after last week's gains
     
  • China cuts repo rate
     

Economic Data Ahead

  • No major economic data releases

Key Events Ahead

  • (0400 ET/0900 GMT) ECB Guindos gives a speech
     
  • (0805 ET/1305 GMT) ECB Lane's speech
     

FX Beat

DXY: The dollar index plunged to a 1-1/2 week trough as data from the U.S. Federal Reserve on Friday showed the U.S. manufacturing downturn deepened in October. Investors now await minutes of the Federal Reserve’s last policy meeting, due on Wednesday, for clues about the future interest rate trajectory. The greenback against a basket of currencies traded 0.1 percent down at 97.88, having touched a high of 98.45 on Wednesday, its highest since October 15.

EUR/USD: The euro rallied to an over 1-week peak, as the greenback eased against a basket of currencies. The European currency traded 0.1 percent up at 1.1063, having touched a high of 1.1064 earlier, its highest since November 7. Investors’ attention will remain on ECB Guindos and Lane's speech, amid a lack of data from both the economies. Immediate resistance is located at 1.1090 (21-DMA), a break above targets 1.1123. On the downside, support is seen at 1.1023, a break below could drag it below 1.1002.

USD/JPY: The dollar surged, extending previous session gains after Chinese state media Xinhua reported Washington and Beijing had a high-level phone call on Saturday and that the two sides discussed each other’s core issues for the first phase of an initial trade agreement. The major was trading 0.1 percent up at 108.83, having hit a low of 108.24 on Thursday, its lowest since November 4. Investors’ will continue to track the broad-based market sentiment, amid a lack of economic data from the U.S. docket. Immediate resistance is located at 108.92 (10-DMA), a break above targets 109.15 (November 13 High). On the downside, support is seen at 108.53, a break below could take it near at 108.29.

GBP/USD: Sterling advanced to a 2-week peak after Prime Minister Boris Johnson said all Conservative Party candidates at the December 12 election had pledged to back his Brexit deal. Moreover, fresh opinion polls pointing to a Conservative victory further supported the upside in the British pound. The major traded 0.2 percent up at 1.2928, having hit a high of 1.2932 earlier, it’s highest since November 4. Immediate resistance is located at 1.2975, a break above could take it near 1.3012 (October 21 High). On the downside, support is seen at 1.2876 (21-DMA), a break below targets 1.2852 (10-DMA). Against the euro, the pound was trading 0.1 percent up at 85.54 pence, having hit a high of 85.45 earlier, it’s highest since May 7.

AUD/USD: The Australian dollar steadied after rebounding from multi-week lows in the previous session as traders looked to whether Washington and Beijing can soon sign off on a deal to end a trade war. The Aussie trades flat at 0.6815, having hit a low of 0.6769 on Thursday, it’s lowest since October 17. Immediate support is seen at 0.6800, a break below targets 0.6780. On the upside, resistance is located at 0.6836, a break above could take it near 0.6858.

NZD/USD: The New Zealand dollar nudged higher as comments from a top U.S. and Chinese officials raised optimism for a U.S.-China trade deal. The Kiwi trades 0.1 percent up at 0.6405, having touched a high of 0.6418 on Thursday, its highest level since November 5. Immediate resistance is located at 0.6418, a break above could take it near 0.6435. On the downside, support is seen at 0.6380 (21-DMA), a break below could drag it below 0.6367.

Equities Recap

Asian shares gained after Beijing surprised markets by trimming a key interest rate for the first time since 2015, stoking speculation that more stimulus was on the way for the Chinese economy.

MSCI's broadest index of Asia-Pacific shares outside Japan surged 0.3 percent.

Tokyo's Nikkei advanced 0.5 percent to 23,416.76 points, Australia's S&P/ASX 200 index eased 0.4 percent to 6,766.80 points and South Korea's KOSPI declined 0.1 percent to 2,160.69 points.

Shanghai composite index rose 0.6 percent to 2,909.20 points, while CSI 300 index traded 0.8 percent up at 3,907.93 points.

Hong Kong’s Hang Seng traded 1.2 percent higher at 26,628.42 points. Taiwan shares added 0.6 percent to 11,599.78 points.

Commodities Recap

Crude oil prices declined, following steady gains in the previous week with investors awaiting fresh clues over prospects for a trade deal between the United States and China. International benchmark Brent crude was trading 0.2 percent down at $63.19 per barrel by 0639 GMT, having hit a high of $63.63 on Friday, its highest since September 24. U.S. West Texas Intermediate was trading 0.1 percent lower at $57.62 a barrel, after rising as high as $57.93 on Friday, its highest since September 24.

Gold prices declined as optimism grew about U.S.-China trade ties following a report of constructive talks over the weekend. Spot gold was trading 0.2 percent down $1,464.36 per ounce by 0642 GMT, having touched a higher of $1,474.52 on Thursday, its highest November 7. U.S. gold futures were 0.1 percent lower at $1,466.40.

Treasuries Recap

The Australian bonds slightly gained during Asian session of the first trading day of the week amid a muted day that witnessed data of little economic significance ahead of the Reserve Bank of Australia’s (RBA) November monetary policy meeting minutes, scheduled to be released on November 19 by 00:30GMT. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, edged tad 1/2 basis point down to 1.155 percent, the yield on the long-term 30-year bond suffered 2-1/2basis points to 1.768 percent and the yield on short-term 2-year slipped 1 basis point to 0.794 percent.

By Lactus Fernandes
  • Market Data
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