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Asia Roundup: Aussie rallies as mortgage lending rebounds, greenback eases following a drop in U.S. durable goods orders, Asian shares consolidate - Tuesday, April 9th, 2019

Market Roundup

  • Theresa May to ask Merkel and Macron for Brexit delay
     
  • UK high-street spending falls for first time in 11 months - BRC
     
  • Japan faces recession risks with dearth of ammunition
     
  • U.S. 'not satisfied yet' in China trade talks -White House official
     
  • Assertive EU to face resistant China at trade-focused summit
     
  • Turkish election board rejects recount call in 31 Istanbul districts -board member
     

Economic Data Ahead

  • No major economic data releases

Key Events Ahead

  • (0805 ET/1205 GMT) Riksbank Deputy Governor Henry Ohlsson speaks at a conference organised by the Swedish Unions within Industry, Balsta
     
  • (1700 ET/2100 GMT) Fed's Randal Quarles participates in discussion before the George Mason University "Meet the Policymakers" Forum for Students, Arlington
     
  • (1800 ET/2245 GMT) Fed's Richard Clarida speaks on the first day of the two-day Spring 2019 Institute Conference, Minneapolis
     

FX Beat

DXY: The dollar index eased to a 6-day low, weighed down by weak U.S. economic data that supported the Federal Reserve's decision to suspend further interest rate rises this year. The greenback against a basket of currencies traded 0.05 percent down at 97.02, having touched a peak of 97.52 last week, its highest since Mar. 8. FxWirePro's Hourly Dollar Strength Index stood at -68.03 (Bearish) by 0500 GMT.

EUR/USD: The euro steadied after rising to a 1-1/2 peak in the previous session, ahead of Chinese Premier Li Keqiang and EU institution leaders meet in Brussels today for an annual EU-China summit.  The European currency traded 0.05 percent up at 1.1265, having touched a high of 1.1274 on Monday, its highest since Mar. 27. FxWirePro's Hourly Euro Strength Index stood at 42.16 (Neutral) by 0500 GMT. Investors’ attention will remain on data from the Eurozone economies, ahead of the U.S. JOLTS Job Openings and IBD/TIPP economic optimism. Immediate resistance is located at 1.1285 (Mar. 28 High), a break above targets 1.1331 (Mar. 25 High). On the downside, support is seen at 1.1213 (Mar. 28 Low), a break below could drag it till 1.1176 (Mar. 7 Low).

USD/JPY: The dollar plunged to a near 1-week low, undermined by data showing U.S. durable goods orders declined modestly in February, pulled down by weak orders for machinery, transportation equipment and computers and electronic products. The major was trading 0.1 percent down at 111.34, having hit a high of 111.82 on Friday, its highest since Mar. 15. FxWirePro's Hourly Yen Strength Index stood at 58.77 (Bullish) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. JOLTS Job Openings and IBD/TIPP economic optimism. Immediate resistance is located at 111.92 (Mar. 6 High), a break above targets 112.13 (Mar. 5 High). On the downside, support is seen at 111.06 (Mar. 13 Low), a break below could take it lower at 110.74 (Mar. 8 Low).

GBP/USD: Sterling surged, extending previous session gains, as Prime Minister Theresa May seek to compromise with opposition Labour leader Jeremy Corbyn on the terms of the UK's withdrawal ahead of an EU leaders' summit today. The major traded 0.2 percent up at 1.3087, having hit a low of 1.2986 on Friday; it’s lowest since Mar. 29. FxWirePro's Hourly Sterling Strength Index stood at -13.81 (Neutral) 0500 GMT. Investors’ attention will remain on the U.S. fundamental drivers, amid a lack of economic data from the UK docket. Immediate resistance is located at 1.3149 (Apr. 1 High), a break above could take it near 1.3196 (Apr. 3 High). On the downside, support is seen at 1.3003 (Mar. 21 Low), a break below targets 1.2976 (Mar. 29 Low). Against the euro, the pound was trading 0.2 percent up at 86.06 pence, having hit a low of 86.45 on Monday, it’s lowest since Mar. 29.

AUD/USD: The Australian dollar rallied to a near 2-week peak, after domestic data showed some rebound in mortgage lending, with loans ex-refinancing up 2.7 percent in February for the biggest monthly gain since 2016. The Aussie trades 0.1 percent up at 0.7134, having hit a high of 0.7139 earlier; it’s highest since Mar. 27. FxWirePro's Hourly Aussie Strength Index stood at 145.21 (Highly Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7070 (Mar. 29 Low), a break below targets 0.7041 (Mar. 14 Low). On the upside, resistance is located at 0.7149 (Mar. 20 High), a break above could take it near 0.7198 (Feb. 27 High).

NZD/USD: The New Zealand dollar advanced, extending previous session's rebound from a 10-week low hit last week, as investors awaited a potentially market-moving speech from a top central banker later in the week. The Kiwi trades 0.1 percent up at 0.6749, having touched a low of 0.6718 on Friday, its lowest level Jan. 22. FxWirePro's Hourly Kiwi Strength Index was at -87.03 (Slightly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6773 (Feb. 11 High), a break above could take it near 0.6827 (Mar. 5 High). On the downside, support is seen at 0.6706 (Jan. 22 Low), a break below could drag it below 0.6668 (Jan. 4 Low).

Equities Recap

Asian shares traded within narrow ranges, as investors awaited the start of the U.S. earnings season and a crucial Brexit summit; however, broader concerns about slowing global growth dented investor risk sentiment.

MSCI's broadest index of Asia-Pacific shares outside Japan consolidated within narrow ranges.

Tokyo's Nikkei rose 0.1 percent to 21,791.81 points, Australia's S&P/ASX 200 index gained 0.05 percent to 6,221.80 points and South Korea's KOSPI surged 0.2 percent to 2,220.33 points.

Shanghai composite index declined 0.9 percent to 3,215.99 points, while CSI 300 index traded 0.4 percent down at 4,039.82 points.

Hong Kong’s Hang Seng traded 0.1 percent higher at 30,097.24 points. Taiwan shares added 0.5 percent to 10,851.60 points

Commodities Recap

Crude oil prices rose to fresh 5-month highs as fears of a global recession ebbed, however, a sluggish economic outlook limited upside. International benchmark Brent crude was trading 0.2 percent up at $71.16 per barrel by 0433 GMT, having hit a high of $71.31, its highest since Nov. 12. U.S. West Texas Intermediate was trading 0.2 percent up at $64.52 a barrel, after rising as high as $64.74, its highest since the Nov. 1.

Gold prices surged, hovering towards a more than one-week high recorded in the previous session, as the greenback eased after weak U.S. economic data. Spot gold rose 0.2 percent to $1,299.38 per ounce by 0454 GMT, having touched a high of $1,303.61 on Monday, its highest since March 28. U.S. gold futures were up 0.1 percent at $1,303.30 an ounce.

Treasuries Recap

The Japanese government bond prices fell slightly, with the 5-year and 10-year JGB yields rising 0.5 basis points each to minus 0.165 percent and minus 0.045 percent, respectively. The 30-year yield rose 1 basis point to 0.540 percent.

The Australian government bond futures were a shade softer on the day, with the three-year bond contract off half a tick at 98.605. The 10-year contract dipped 1 tick to 98.1050.

The yields on New Zealand government bonds rose 2 to 3 basis points across the curve.

The Canadian government bond prices were lower across a steeper yield curve, with the two-year down 3.5 Canadian cents to yield 1.611% and the 10-year falling 25 Canadian cents to yield 1.729 percent. The 10-year yield touched its highest intraday since March 20 at 1.732 percent.

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