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Asia Roundup: Aussie off highs as RBA set to cut rates again, greenback gains as investors eye U.S. retail sales data, Asian shares surge - Tuesday, July 16th, 2019

Market Roundup

  • Gold prices firm as investors eye U.S. retail sales data
     
  • Oil steady as U.S resumes Gulf of Mexico output
     
  • RBA ready to cut rates again 'if needed'
     

Economic Data Ahead

  • (0430 ET/0830 GMT) United Kingdom Claimant Count Rate June
     
  • (0430 ET/0830 GMT) United Kingdom Claimant Count Change June
     
  • (0430 ET/0830 GMT) United Kingdom ILO unemployment rate  3M May
     
  • (0500 ET/0900 GMT) German ZEW Survey - Economic Sentiment July
     
  • (0500 ET/0900 GMT) German ZEW Survey - Current Situation July
     
  • (0500 ET/0900 GMT) Italy Consumer price index  YY June
     
  • (0500 ET/0900 GMT) Italy Consumer price index  MM June
     
  • (0500 ET/0900 GMT) Italy Consumer price index  (EU Norm) YY June
     
  • (0500 ET/0900 GMT) Italy Consumer price index  (EU Norm) MM June
     
  • (0500 ET/0900 GMT) EZ ZEW Survey - Economic Sentiment July
     
  • (0500 ET/0900 GMT) EZ Trade Balance s.a. May
     
  • (0500 ET/0900 GMT) EZ Trade Balance n.s.a. May
     

Key Events Ahead

  • No significant data scheduled

FX Beat

DXY: The dollar index rose, extending previous session gains after U.S. Treasury Secretary Steven Mnuchin said he and U.S. Trade Representative Robert Lighthizer would speak with their Chinese counterparts by phone again this week as part of the recently resumed trade talks.  The greenback against a basket of currencies traded 0.1 percent up at 97.00, having touched a low of 96.72 on Friday, its lowest since June 5.

EUR/USD: The euro consolidated within narrow ranges as investors refrained from taking big positions amid growing expectations for a dovish European Central Bank meeting next week. The European currency traded flat at 1.1258, having touched a high of 1.1286 on Thursday, its highest since July 5. Investors’ attention will remain on a series of data from the Eurozone economies and ZEW Survey -Economic sentiment, ahead of the U.S. retail sales, capacity utilization, industrial production, business inventories, NAHB housing market index, and import and export price index. Immediate resistance is located at 1.1304 (50.0% retracement of 1.1412 and 1.1193), a break above targets 1.1366 (78.6% retracement). On the downside, support is seen at 1.1207 (July 5 Low), a break below could drag it below 1.1181 (June 18 Low).

USD/JPY: The dollar rose above the 108.00 handle, as investors awaited the release of U.S. retail sales figures for signs of improvement in the economy. However, the upside appears limited as the yield on benchmark 10-year Treasury notes eased slightly to 2.0852 percent compared with its previous close of 2.092 percent. The pair was trading 0.1 percent up at 108.05, having hit a low of 107.79 on Monday, its lowest since July 5. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. retail sales, capacity utilization, industrial production, business inventories, NAHB housing market index, and import and export price index. Immediate resistance is located at 108.32 (5-DMA), a break above targets 108.80 (July 8 High). On the downside, support is seen at 107.53 (July 3 Low), a break below could take it lower at 107.10 (June 26 Low).

GBP/USD: Sterling eased to a 5-day low, as investors were nervous about the prospect of eurosceptic Boris Johnson winning the Conservative party leadership contest and becoming the next British prime minister as early as the end of this month. The major traded flat at 1.2515, having hit a high of 1.2578 on Friday, it’s highest since July 5. Investors’ attention will remain on the development surrounding Brexit and UK labour market data, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2571 (38.2% retracement of 1.2783 and 1.2439), a break above could take it near 1.2611 (50.0% retracement). On the downside, support is seen at 1.2481 (July 5 Low), a break below targets 1.2439 (July 9 Low). Against the euro, the pound was trading flat at 89.96 pence, having hit a high of 89.55 on Monday, it’s highest since Jul. 9.

AUD/USD: The Australian dollar eased from a 1-1/2 week peak after minutes of the Reserve Bank of Australia’s July policy meeting showed its board decided that cutting rates by another quarter-point would help speed up the economy. The Aussie trades 0.1 percent down at 0.7033, having hit a high of 0.7044 earlier, it’s highest since July 4. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6998 (June 28 Low), a break below targets 0.6941 (June 25 Low). On the upside, resistance is located at 0.7069 (Apr. 30 High), a break above could take it near 0.7091 (Mar 12 High).

NZD/USD: The New Zealand dollar rallied to a 3-month peak, as investors continued to wager the Reserve Bank of New Zealand would cut rates at its next policy meeting on Aug. 7, as the Fed was also expected to ease by the end of this month. The Kiwi trades 0.2 percent up at 0.6730, having touched a high of 0.6738 earlier, its highest level Apr. 17. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6771 (Apr. 11 High), a break above could take it near 0.6799 (Apr. 4 High). On the downside, support is seen at 0.6663 (5-DMA), a break below could drag it below 0.6602 (July 5 Low).

Equities Recap

Asian shares gained as investors’ awaited U.S. retail sales data and corporate earnings to gauge the health of the economy.

MSCI's broadest index of Asia-Pacific shares outside Japan surged 0.2 percent.

Tokyo's Nikkei declined 0.7 percent to 21,535.25 points, Australia's S&P/ASX 200 index eased 0.2 percent to 6,641.00 points and South Korea's KOSPI rose 0.5 percent to 2,091.87 points.

Shanghai composite index eased 0.2 percent to 2,937.67 points, while CSI 300 index traded 0.4 percent down at 3,807.22 points.

Hong Kong’s Hang Seng traded 0.2 percent higher at 28,595.20 points. Taiwan shares added 0.1 percent to 10,886.05 points.

Commodities Recap

Crude oil prices surged after falling in the previous session as output in the U.S. Gulf of Mexico resumed after Hurricane Barry swept through over the weekend. International benchmark Brent crude was trading 0.5 percent higher at $66.50 per barrel by 0546 GMT, having hit a high of $67.63 on Thursday, its highest since May 30. U.S. West Texas Intermediate was trading 0.5 percent up at $59.58 a barrel, after rising as high as $60.91 on Thursday, its highest since the May 23.

Gold prices rose as investors’ awaited U.S. retail sales data that could provide further insight on the strength of the economy amid lingering concerns over global economic slowdown. Spot gold was trading 0.1 percent up at $1,415.16 per ounce by 0549 GMT, having touched a high of $1,427.06 on Thursday, its highest since July 3. U.S. gold futures were up 0.1 percent at $1,414.90 an ounce.

Treasuries Recap

The Japanese government bonds gained at close, tracking a similar movement in the global peers, helped further by the Bank of Japan’s (BoJ) daily bond-buying operations, held earlier today. At close, the yield on the benchmark 10-year JGB note, which moves inversely to its price, slipped 1-1/2 basis points to -0.135 percent, the yield on the long-term 30-year edged tad lower to 0.380 percent and the yield on short-term 2-year slumped 5 basis points to -0.185 percent.

The Australian government bond yields plunged during Asian session of the second trading day of the week after the Reserve Bank of Australia’s (RBA) July monetary policy meeting minutes hinted at further easing in its benchmark interest rate at its upcoming meetings. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, plunged nearly 8 basis points to 1.387 percent, the yield on the long-term 30-year bond slumped 7-1/2 basis points to 2.044 percent and the yield on short-term 2-year traded nearly 5-1/2 basis points down at 0.954 percent.

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July 2 15:00 UTC Released

DKCurrency Reserves

Actual

449.6 Stale

Forecast

Previous

451.7 Stale

July 2 13:45 UTC Released

USISM NY Biz Conditions

Actual

50 %

Forecast

Previous

48.6 %

January 31 00:00 UTC 818336818336m

ARAnnual Primary Balance*

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Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 818336818336m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 22 19:00 UTC 830156830156m

ARTrade Balance

Actual

Forecast

Previous

-1541 %

January 31 00:00 UTC 818336818336m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 22 19:00 UTC 830156830156m

ARTrade Balance

Actual

Forecast

Previous

-1541 %

January 31 00:00 UTC 818336818336m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 818336818336m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 818336818336m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

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