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Asia Roundup: Aussie eases on RBA policy meeting minutes, dollar tumbles amid doubts over the U.S.-China trade deal, Asian shares subdued - Tuesday, November 19th, 2019

Market Roundup

  • Oil slips amid rise in U.S. inventories.
     
  • Gold gains on lack of U.S.-China trade talk progress
     

Economic Data Ahead

  • (0400 ET/0900 GMT) Italy industrial sales MoM September
     
  • (0400 ET/0900 GMT) Italy industrial sales YoY September
     
  • (0400 ET/0900 GMT) EZ Current Account N.S.A
     
  • (0400 ET/0900 GMT) EZ Current Account S.A
     
  • (0400 ET/0900 GMT) EZ Construction output S.A
     
  • (0400 ET/0900 GMT) EZ Construction output W.D.A
     

Key Events Ahead

  • No significant event scheduled

FX Beat

DXY: The dollar index declined amid receding hopes for a preliminary trade deal between the United States and China. The greenback against a basket of currencies traded 0.1 percent down at 97.77, having touched a high of 98.45 on Wednesday, its highest since October 15.

EUR/USD: The euro steadied after rising to an over 1-week peak in the previous session, after Slovenian central bank chief Boštjan Vasle stated that Eurozone growth has stabilised and the European Central Bank’s recent stimulus scheme is working as intended. The European currency traded 0.05 percent up at 1.1075, having touched a high of 1.1089 on Monday, its highest since November 7. Investors’ attention will remain on a series of data out of Eurozone economies, EZ current account and construction output, ahead of the U.S. building permits, housing starts, and Fed officials' speeches. Immediate resistance is located at 1.1091, a break above targets 1.1123. On the downside, support is seen at 1.1039, a break below could drag it below 1.1002.

USD/JPY: The dollar declined, extending previous session losses after CNBC reported that Beijing was pessimistic about a trade deal with the United States, troubled by President Donald Trump’s comments that there was no agreement on rollback of tariffs. The major was trading 0.1 percent down at 108.60, 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. building permits, housing starts, and Fed officials' speeches. Immediate resistance is located at 108.75 (21-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 surged, extending gains for the fifth straight session, as the Conservatives lead in polls for Britain’s general election, boosting the chances of Prime Minister Boris Johnson’s withdrawal deal being passed by parliament before the January 31 Brexit deadline. The major traded 0.1 percent up at 1.2959, having hit a high of 1.2985 on Monday, 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 1.2884 (5-DMA), a break below targets 1.2859 (10-DMA). Against the euro, the pound was trading flat at 85.45 pence, having hit a high of 85.45 earlier, it’s highest since May 6.

AUD/USD: The Australian dollar declined after minutes from a Reserve Bank of Australia policy meeting showed central bankers considered cutting rates this month. The Aussie trades 0.1 percent down at 0.6784, 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 0.6836, a break above could take it near 0.6858.

NZD/USD: The New Zealand dollar plunged as investors await clearer news on the progress of trade negotiations between the United States and China. The Kiwi trades 0.1 percent down at 0.6393, 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 0.6418, a break above could take it near 0.6435. On the downside, support is seen at 0.6371 (10-DMA), a break below could drag it below 0.6326.

Equities Recap

Asian shares markets were mixed in subdued trade as investors await clarity on whether U.S.-China negotiations will reach a preliminary accord to end the prolonged trade war.

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

Tokyo's Nikkei eased 0.5 percent to 23,292.65 points, Australia's S&P/ASX 200 index rallied 0.7 percent to 6,814.20 points and South Korea's KOSPI declined 0.4 percent to 2,151.17 points.

Shanghai composite index rose 0.6 percent to 2,925.48 points, while CSI 300 index traded 0.7 percent up at 3,936.47 points.

Hong Kong’s Hang Seng traded 1.3 percent higher at 27,014.42 points. Taiwan shares added 0.5 percent to 11,656.40 points

Commodities Recap

Crude oil prices steadied, after tumbling in the previous session, amid market concerns over limited progress between China and the United States on rolling back trade tariffs, exacerbated by a rise in U.S. inventories. International benchmark Brent crude was trading 0.2 percent up at $62.34 per barrel by 0511 GMT, having hit a high of $63.63 on Friday, its highest since September 24. U.S. West Texas Intermediate was trading 0.2 percent higher at $56.93 a barrel, after rising as high as $57.93 on Friday, its highest since September 24.

Gold prices declined after rising to its highest in more than 1-1/2 weeks earlier in the session on fresh doubts about a trade deal between the United States and China. Spot gold eased 0.1 percent to $1,469.55 per ounce by 0528 GMT, having touched a high of $1,475.25 earlier, its highest November 7. U.S. gold futures edged up 0.2 percent to $1,474.10 per ounce.

Treasuries Recap

The Japanese government bond prices edged a tick higher amid a lack of clarity on the progress in the U.S-China trade negotiations. Benchmark 10-year JGB futures rose 0.04 point to 153.29.  The key 10-year cash JGB yield fell half-a-basis point to minus 0.095 percent. The 20-year and the 40-year yields also dropped 0.5 basis point each to 0.280 percent and 0.470 percent, respectively, while the 30-year yield stood flat at 0.440 percent. The five-year yield retreated half-a-basis point to minus 0.205 percent.

By Lactus Fernandes
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