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Asia Roundup: Aussie rebounds on RBA Debelle's comments, dollar near 9-day low against the yen after IMF cuts global economic outlook, Asian shares off 8-month peak - Wednesday, April 10th, 2019

Market Roundup

  • In placeholder meeting, ECB hopes to instil confidence
     
  • In new attack, Trump threatens more tariffs against European Union
     
  • Fed's Clarida: U.S. jobless rate may have room to fall without inflation
     
  • Trump's Fed picks draw political fire as they angle for the job
     
  • IMF says global economy cooling, coordinated stimulus may be needed
     
  • Japan's Feb machinery orders rebound but investment outlook fragile
     
  • Australia c.bank still trying to unravel policy puzzle - dep gov
     
  • Australian consumer confidence gets modest budget boost
     
  • Israel's Netanyahu secures election victory - Israeli TV channels
     

Economic Data Ahead

  • (0400 ET/0800 GMT) Italy Feb Industrial Output YY WDA, -0.9% f'cast, -0.8% prev
     
  • (0430 ET/0830 GMT) Great Britain Feb GDP Estimate YY, 1.7% f'cast, 1.4% prev
     
  • (0430 ET/0830 GMT) Great Britain Feb Industrial Output YY, -0.9% f'cast, -0.9% prev
     
  • (0430 ET/0830 GMT) Great Britain Feb Manufacturing Output YY, -0.7% f'cast, -1.1% prev
     
  • (0430 ET/0830 GMT) Great Britain Feb Construction O/P Vol YY, 2.4% f'cast, 1.8% prev
     
  • (0430 ET/0830 GMT) Great Britain Feb Goods Trade Balance GBP, -12.70 bln f'cast, -13.08 bln prev
     
  • (0430 ET/0830 GMT) Great Britain Feb Goods Trade Bal. Non-EU, -4.500 bln f'cast, -4.977 bln prev
     
  • (0430 ET/0830 GMT) Great Britain Feb Services YY, 1.7% prev
     
  • (0745 ET/1145 GMT) EZ Apr ECB Refinancing Rate, 0.00% f'cast, 0.00% prev
     
  • (0745 ET/1145 GMT) EZ Apr ECB Deposit Rate, -0.40% f'cast, -0.40% prev
     

Key Events Ahead

  • (0415 ET/0815 GMT) BoE Insurance Supervision Executive Director David Rule will speak at 2019 Bulk Annuities Conference Westminster and City Programmes, London
     
  • (0830 ET/1230 GMT) ECB President Mario Draghi holds a press conference after an interest rate meeting
     
  • (1105 ET/1505 GMT) BoE Monetary Policy Committee Member Dave Ramsden participates in Financial Stability Board Roundtable, Washington
     
  • (1150 ET/1550 GMT) Fed's Quarles, BoE's Ramsden, U.S. CFTC Chairman J. Christopher Giancarlo and UK FCA CEO Andrew Bailey speak at a Financial Stability Board round-table discussion, Washington
     
  • (1400 ET/1800 GMT) FOMC will release the minutes from its March 19-20, 2019 policy meeting
     
  • (1400 ET/1800 GMT) ECB's Coeure participates in a seminar on 'Money and payments in the digital age' organised by the IMF in Washington, D.C

FX Beat

DXY: The dollar index declined, hovering towards a near 2-week low hit in the prior session, as hopes of a trade deal between Washington and Beijing eased. The greenback against a basket of currencies traded 0.05 percent down at 96.96, having touched a peak of 97.52 last week, its highest since Mar. 8. FxWirePro's Hourly Dollar Strength Index stood at -83.51 (Slightly Bearish) by 0600 GMT.

EUR/USD: The euro consolidated within narrow ranges after Italy cut its growth forecasts for this year and next; and raised the budget deficit and public debt. The European currency traded flat at 1.1261, having touched a high of 1.1284 on Tuesday, its highest since Mar. 27. FxWirePro's Hourly Euro Strength Index stood at 60.56 (Bullish) by 0500 GMT. Investors’ attention will remain on data from the Eurozone economies, ahead of the U.S. consumer price index, monthly budget statement and Fed Quarles speech. 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 traded near a 9-day low after the International Monetary Fund slashed its global growth forecasts for 2019 to 3.3 percent, the slowest expansion since 2016 and from its earlier projection of 3.5 percent in January. The major was trading flat at 111.17, having hit a high of 111.82 on Friday, its highest since Mar. 15. FxWirePro's Hourly Yen Strength Index stood at 16.21 (Neutral) by 0600 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. consumer price index, monthly budget statement and Fed Quarles speech. 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 110.80 (Apr. 1 Low), a break below could take it lower at 110.53 (Mar. 20 Low).

GBP/USD: Sterling traded within narrow ranges, as investors refrained from taking big positions, ahead of a crucial Brexit summit meeting. The major traded 0.1 percent up at 1.3066, having hit a low of 1.2986 on Friday; it’s lowest since Mar. 29. FxWirePro's Hourly Sterling Strength Index stood at 19.18 (Neutral) 0600 GMT. Investors’ attention will remain on the UK manufacturing production, industrial production, trade balance and gross domestic product, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3121 (Apr. 5 High), a break above could take it near 1.3149 (Apr. 1 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 0.1 percent up at 86.19 pence, having hit a low of 86.51 on Tuesday, it’s lowest since Mar. 22.

AUD/USD: The Australian dollar rose, hovering towards a near 3-week peak struck in the prior session after Reserve Bank of Australia Deputy Governor Guy Debelle reiterated that while the economy seemed to have slowed, the labour market was surprisingly strong. The Aussie trades 0.4 percent up at 0.7148, having hit a high of 0.7152 on Tuesday; it’s highest since Mar. 21. FxWirePro's Hourly Aussie Strength Index stood at 133.35 (Highly Bullish) by 0600 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 0.7168 (Mar. 21 High), a break above could take it near 0.7198 (Feb. 27 High).

NZD/USD: The New Zealand dollar rose, extending gains for the third straight session, as the greenback eased for the third consecutive day. The Kiwi trades 0.2 percent up at 0.6754, having touched a low of 0.6718 on Friday, its lowest level Jan. 22. FxWirePro's Hourly Kiwi Strength Index was at 4.05 (Neutral) by 0600 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 slumped from 8-month highs as the International Monetary Fund lowered its global growth outlook, while tensions over tariffs between the United States and Europe escalated.

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

Tokyo's Nikkei plunged 0.5 percent to 21,687.57 points, Australia's S&P/ASX 200 index gained 0.05 percent to 6,223.50 points and South Korea's KOSPI surged 0.5 percent to 2,225.02 points.

Shanghai composite index declined 0.05 percent to 3,239.29 points, while CSI 300 index traded 0.2 percent up at 4,084.18 points.

Hong Kong’s Hang Seng traded 0.3 percent lower at 30,082.91 points. Taiwan shares added 0.2 percent to 10,868.14 points

Commodities Recap

Crude oil prices eased, weighed down by expectations that an economic slowdown could soon dent fuel consumption, however, supply cuts by producer group OPEC and U.S. sanctions against oil exporters Iran and Venezuela limited downside. International benchmark Brent crude was trading 0.1 percent down at $70.66 per barrel by 0506 GMT, having hit a high of $71.33, its highest since Nov. 12. U.S. West Texas Intermediate was trading 0.1 percent down at $64.15 a barrel, after rising as high as $64.77 on Tuesday, its highest since the Nov. 1.

Gold prices declined from a near 2-week peak hit in the previous session as the dollar steadied amid concerns over global growth and trade tensions between the United States and Europe. Spot gold was 0.1 percent down at $1,302.58 per ounce at 0540 GMT, having touched a high of $1,306.09 on Tuesday, its highest since March 28. U.S. gold futures slipped 0.2 percent to $1,306 an ounce.

Treasuries Recap

The Japanese government bond prices rose, with the benchmark 10-year JGB yield falling 1 basis point to minus 0.060 percent. The 20-year yield lost half a basis point to 0.350 percent. The 30-year yield and the 40-year yield dipped 1 basis point each, to 0.525 percent and 0.550 percent, respectively.

The yields on three-year Australian bonds edged up to 1.41 percent, from 1.376 percent. The three-year bond futures contract was still up 1 tick at 98.615, while the 10-year contract added 3 ticks to 98.1250.

The Canadian government bond prices were higher across much of the yield curve in sympathy with U.S. Treasuries. The two-year rose up 2.5 Canadian cents to yield 1.602 percent and the 10-year was up 7 Canadian cents to yield 1.727 percent.

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July 2 15:00 UTC Released

DKCurrency Reserves

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449.6 Stale

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451.7 Stale

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50 %

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48.6 %

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-1541 %

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2016 bln ARS

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