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Asia Roundup: Antipodeans steady, dollar halts 5-day losing streak against yen on U.S.-China trade deal hopes, investors eye EZ inflation data - Friday, November 15th, 2019

Market Roundup

  • Gold eases on U.S.-China trade deal hopes
     
  • Oil gains as hopes build for OPEC supply curbs
     

Economic Data Ahead

  • (0500 ET/1000 GMT) Eurozone trade
     
  • (0500 ET/1000 GMT) Eurozone inflation
     

Key Events Ahead

  • No significant event scheduled

FX Beat

DXY: The dollar index eased, extending losses for third straight session, amid mixed signals on trade negotiations. The greenback against a basket of currencies traded flat at 98.16, having touched a high of 98.45 on Wednesday, its highest since October 15.

EUR/USD: The euro steadied after falling to an over 1-month low in the previous session as German Economy Minister Peter Altmaier warned that economic developments remained fragile. The European currency traded flat at 1.1022, having touched a low of 1.0989 on Thursday, its lowest since October 15. Investors’ attention will remain on a series of data from the Eurozone economies, EZ final CPI and trade balance, ahead of the U.S. retail sales, capacity utilization rate and business inventories. Immediate resistance is located at 1.1042, a break above targets 1.1062. On the downside, support is seen at 1.0985, a break below could drag it below 1.0957.

USD/JPY: The dollar surged, halting a 5-day losing streak, after White House economic adviser Larry Kudlow stated that the United States is nearing an interim trade pact with China. The major was trading 0.2 percent up at 108.59, having hit a low of 108.24 on Thursday, its lowest since November 4. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. retail sales, capacity utilization rate and business inventories. Immediate resistance is located at 108.89 (5-DMA), a break above targets 109.15 (November 13 High). On the downside, support is seen at 108.29, a break below could take it near at 108.03.

GBP/USD: Sterling consolidated below the 1.2900 handle, amid expectations that Britain’s ruling Conservative Party might win a majority in a December 12 election that could finally end the Brexit impasse. The major traded flat at 1.2877, having hit a high of 1.2897 on Monday, it’s highest since November 5. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2904, a break above could take it near 1.2972 (November 1 High). On the downside, support is seen at 1.2856 (10-DMA), a break below targets 1.2806. Against the euro, the pound was trading flat at 85.59 pence, having hit a high of 85.44 on Thursday, it’s highest since May 7.

AUD/USD: The Australian dollar steadied after falling to a near 1-month low in the previous session on an unexpected rise in the nation's unemployment rate. The Aussie trades 0.1 percent up at 0.6793, having hit a low of 0.6769 on Thursday, it’s lowest since October 17. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6751, a break below targets 0.6708. On the upside, resistance is located at 0.6810, a break above could take it near 0.6834.

NZD/USD: The New Zealand dollar nudged higher after falling from a 9-day peak hit in the previous session, as fresh hopes for a breakthrough in U.S.-China trade talks boosted investor risk sentiment. The Kiwi trades 0.1 percent up at 0.6389, having touched a high of 0.6418 on Thursday, its highest level since November 5. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6405, a break above could take it near 0.6435. On the downside, support is seen at 0.6361 (5-DMA), a break below could drag it below 0.6326.

Equities Recap

Asian shares rallied on fresh hopes for a breakthrough in U.S.-China trade talks.

MSCI's broadest index of Asia-Pacific shares outside Japan surged 0.6 percent.

Tokyo's Nikkei rose 0.7 percent to 23,303.32 points, Australia's S&P/ASX 200 index surged 0.9 percent to 6,793.70 points and South Korea's KOSPI rallied 1.1 percent to 2,162.18 points.

Shanghai composite index eased 0.5 percent to 2,896.49 points, while CSI 300 index traded 0.6 percent down at 3,884.72 points.

Hong Kong’s Hang Seng traded 0.3 percent higher at 26,385.17 points. Taiwan shares added 0.7 percent to 11,525.60 points.

Commodities Recap

Crude oil prices surged as OPEC’s outlook for oil demand next year fueled hopes that the producer cartel and its associates will limit supply when they meet to discuss policy on output next month. International benchmark Brent crude was trading 0.3 percent up at $62.50 per barrel by 0540 GMT, having hit a high of $63.19 on Thursday, its highest since November 6. U.S. West Texas Intermediate was trading 0.2 percent higher at $56.99 a barrel, after rising as high as $57.75 on Thursday, its highest since November 7.

Gold prices declined as risk appetite improved by comments from White House economic adviser Larry Kudlow that the United States is nearing an interim trade pact with China. Spot gold was trading 0.5 percent down at $1,464.90 per ounce by 0548 GMT, having touched a higher of $1,474.52 on Thursday, its highest November 7, but was still set to rise more than 0.5 percent this week. U.S. gold futures were down 0.5 percent at $1,466.30 an ounce.

Treasuries Recap

The Japanese government bond prices eased on revived hopes of a U.S.-China trade deal. The benchmark 10-year JGB futures fell 0.07 point to 153.05. The benchmark 10-year cash JGB yield was flat at minus 0.075 percent, off a seven-month high of minus 0.030 percent touched on Tuesday. The longer maturities fared worse, with the 20-year JGB yield rising 0.5 basis point to 0.300 percent, while the 30-year yield was up 1 basis point at 0.455 percent.

By Lactus Fernandes
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