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Asia Roundup: Antipodeans steady on improving risk-sentiment, dollar index hits 1-week peak on easing U.S.-North Korea tensions, Asian shares rally - Friday, March 9th, 2018

Market Roundup

  • Trump says plans to meet N.Korea's Kim after promise to give up nuclear weapons
     
  • Asia's biggest exporters bristle over U.S. tariffs, fanning trade war fears
     
  • Japan central bank keeps policy steady, Kuroda likely to flag distant stimulus exit
     
  • Japan Jan All Household spending y/y, 1.9%, -1.2% f'cast, -0.1% last
     
  • Japan Jan All Household spending m/m, 2.7%, -0.4% f'cast, -2.5% last
     
  • Japan real wages slump, overshadow rebound in household spending
     
  • China Feb PPI y/y, 3.7%, 3.8% f'cast, 4.3% last
     
  • China Feb CPI y/y, 2.9%, 2.5% f'cast, 1.5% last
     
  • China Feb CPI m/m, 1.2%, 0.8% f'cast, 0.6% last
     
  • China to rely less on economic stimulus as it battles risks - cbank gov
     
  • Asia-Pacific nations sign sweeping trade deal without U.S.
     
  • Fed's George sees 'upside' risks, wants further rate hikes
     
  • No Brexit deal until next year, UK officials say privately – Bloomberg
     
  • Foreign CB US debt holdings +$22,047 bln to $3.440 trln Mar 7 week
     
  • Treasuries +$21,232 bln to $3.095 trln, agencies +$723 mln to $264.195 bln

Economic Data Ahead

  • (0200 ET/0700 GMT) Norway Feb Consumer Price Index, 0.7% m/m, 1.8% y/y eyed; -0.1%, 1.6% prev
     
  • (0200 ET/0700 GMT) Norway Feb Core Inflation m/m, 0.8% eyed, -0.8% prev
     
  • (0200 ET/0700 GMT) Norway Feb Core Inflation, 1.3% eyed, 1.1% prev
     
  • (0200 ET/0700 GMT) Germany Jan Industrial Output m/m, 0.5% eyed, -0.6% prev
     
  • (0200 ET/0700 GMT) Germany Jan Trade Balance (EUR) SA, 21.1 bln eyed, 21.4 bln prev
     
  • (0200 ET/0700 GMT) Germany Jan Imports m/m SA, 0.0% eyed, 1.4% prev
     
  • (0200 ET/0700 GMT) Germany Jan Exports m/m SA, 0.30% eyed, 0.30% prev
     
  • (0430 ET/0930 GMT) Great Britain Jan Industrial Output, 1.5% m/m, 1.8% y/y eyed; -1.3%, 0.0% prev
     
  • (0430 ET/0930 GMT) Great Britain Jan Manufacturing Output, 0.2% m/m, 2.8% y/y eyed; 0.3%, 1.4% prev
     
  • (0430 ET/0930 GMT) Great Britain Jan Trade Balance Non-EU, -4.40 bln eyed, -5.18 bln prev
  •  
  • (0430 ET/0930 GMT) Great Britain Jan Trade Balance (GBP), -12.00 bln eyed, -13.58 bln prev

Key Events Ahead

  • (0330 ET/0830 GMT) ECB's Benoit Coeure speaks in Frankfurt
     
  • (0345 ET/0845 GMT) ECB's Sabine Lautenschlager speaks in Frankfurt
     
  • (0645 ET/1105 GMT) Great Britain Stg 2.0/Stg 1.0/Stg 2.0 bln for 1/3/6 month auction
     
  • (0800 ET/1300 GMT) Irish Central Bank Governor Philip Lane gives a speech on the state of the economy in Dublin
     
  • (0840 ET/1340 GMT) Chicago Fed President Charles Evans speaks in New York
     
  • (0945 ET/1445 GMT) World Bank's CEO Kristalina Georgieva and Madeleine Albright speak in a Brussels Forum

FX Beat

DXY: The dollar index rose to an over 1-week peak earlier in the day after a South Korean envoy said that Trump expressed willingness to meet North Korean leader Kim Jong Un by May and that Kim had expressed commitment to denuclearization. The greenback against a basket of currencies traded 0.05 percent up at 90.16, having touched a low of 89.41 on Wednesday, its lowest since Feb. 20. FxWirePro's Hourly Dollar Strength Index stood at 4.47 (Neutral) by 0500 GMT.

EUR/USD: The euro fell to a 4-day low after European Central Bank President Mario Draghi highlighted concerns over the regions subdued inflation and rising protectionism. The European currency traded 0.05 percent down at 1.2307, having touched a high of 1.2445 on Wednesday, its highest since Feb. 16. FxWirePro's Hourly Euro Strength Index stood at 64.82 (Bullish) by 0500 GMT. Investors’ attention will remain on series of economic data from the Eurozone economies, ahead of U.S. nonfarm payroll report, unemployment rate, wholesale inventories and Fed officials' speeches. Immediate resistance is located at 1.2364, a break above targets 1.2465 (Feb 14 High). On the downside, support is seen at 1.2269, a break below could drag it lower 1.2221.

USD/JPY: The dollar rallied to an over 1-week high, as geopolitical tensions eased after U.S. President Donald Trump showed willingness to accept an invitation to meet North Korean leader Kim Jong Un by May. The major was trading 0.4 percent up at 106.62, having hit a high of 106.94 earlier, its highest since Mar. 1. FxWirePro's Hourly Yen Strength Index stood at -47.81 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. nonfarm payroll report, unemployment rate, wholesale inventories and Fed officials' speeches. Immediate resistance is located at 107.20 (Mar 1), a break above targets 107.67 (Feb. 27). On the downside, support is seen at 105.85, a break below could take it lower 105.25.

GBP/USD: Sterling steadied after falling below the 1.3900 handle in the previous session on increasing concerns that disagreement over the European Union's draft guidelines for a trade pact would prevent a transition deal being reached later this month. The major traded flat at 1.3804, having hit a high of 1.3929 on Tuesday, it’s highest since Feb 27. FxWirePro's Hourly Sterling Strength Index stood at -59.90 (Bearish) by 0500 GMT. Investors’ focus will remain on the UK manufacturing and industrial production figures, trade balance data and UK NIESR GDP estimate, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3861 (10-DMA), a break above could take it near 1.3907 (21-DMA). On the downside, support is seen at 1.3766 (Mar. 5 Low), a break below targets 1.3711 (Mar. 1 Low). Against the euro, the pound was trading 0.05 percent down at 89.19 pence, having hit a low of 89.67 pence on Wednesday, it’s lowest since Nov. 28, 2017.

AUD/USD: The Australian dollar rose after falling for two straight sessions, as risk appetite improved after North Korean leader Kim Jong Un offered to stop nuclear and missile testing and to meet with his U.S. counterpart.  The Aussie trades 0.1 percent up at 0.7795, having hit a low of 0.7842 on Tuesday; it’s highest since Feb. 27. FxWirePro's Hourly Aussie Strength Index stood at 48.49 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7756 (Mar. 6 Low), a break below targets 0.7712 (Mar 1 Low). On the upside, resistance is located at 0.7832 (10-DMA), a break above could take it near 0.7868 (Feb 27 High).

NZD/USD: The New Zealand dollar gained on a report that North Korea's Kim Jong Un is committed to denuclearization and has invited President Trump to meet for negotiations over its nuclear program. The Kiwi trades 0.2 percent up at 0.7275, having touched a high of 0.7310 on Tuesday, its highest level since Feb. 26. FxWirePro's Hourly Kiwi Strength Index was at 13.22 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7310 (Mar 6 High), a break above could take it near 0.7344 (Feb 23 High). On the downside, support is seen at 0.7231, a break below could drag it below 0.7200.

Equities Recap

Asian shares surged, while the greenback hit a 1-week peak after North Korean leader Kim Jong Un offered to stop nuclear and missile testing and U.S. President Donald Trump agreed to a meeting.

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

Tokyo's Nikkei rallied 0.5 percent to 21,469.20 points, Australia's S&P/ASX 200 index surged 0.4 percent to 5,963.20 points and South Korea's KOSPI gained 0.8 percent to 2,453.51 points.

Shanghai composite index rose 0.4 percent to 3,302.71 points, while CSI300 index was trading 0.6 percent up at 4,103.36 points.

Hong Kong’s Hang Seng was trading 1.04 percent higher at 30,964.15 points. Taiwan shares added 0.4 percent to 10,864.82 points.

Commodities Recap

Crude oil prices declined, extending losses for the third straight session, as the dollar rose on news that North Korean leader Kim Jong Un will meet with U.S. President Donald Trump.  International benchmark Brent crude was trading 0.1 percent down at $63.78 per barrel by 0451 GMT, having hit a low of $63.41 on Thursday, its lowest since Mar. 2. U.S. West Texas Intermediate was trading 0.1 percent down at $60.24 a barrel, after falling as low as $59.99 the day before, its weakest since Feb. 15.

Gold prices extended losses into a third consecutive session as the dollar strengthened against the yen on hopes of easing tensions between the United States and North Korea and ahead of U.S. non-farm payroll data later in the day. Spot gold was down 0.3 percent at $1,317.94 per ounce at 0455 GMT, having hit $1,316.77 an ounce earlier, its lowest since Mar. 2. U.S. gold futures were down 0.3 percent at $1,318.1.

Treasuries Recap

The 10-year U.S Treasury yield stood at 2.871 percent higher by 0.006 bps, while 5-year yield was 0.012 bps up at 2.646 percent.

The Japanese government bonds remained unresponsive to the Bank of Japan’s (BoJ) two-day monetary policy meeting, concluded early today, where its kept its short-term interest rate target unchanged at -0.1 percent. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.05 percent, the yield on the long-term 30-year note rose 1 basis point to 0.76 percent and the yield on short-term 2-year traded flat at -0.15 percent.

The Australian short-term government bonds slumped as investors cashed in profits on the last trading day of the week. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, traded flat at 2.808 percent, the yield on the long-term 30-year note dipped 1/2 basis point to 3.386 percent and the yield on short-term 2-year up 2-1/2 basis points to 2.031 percent.

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June 22 14:30 UTC Released

USECRI Weekly Annualized

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3.1 %

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2.7 %

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150.1 %

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149.3 %

January 31 00:00 UTC 206048206048m

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January 22 19:00 UTC 217868217868m

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-1541 %

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-1541 %

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2016 bln ARS

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