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Asia Roundup: Aussie rebounds on RBA Governor Lowe's comments, greenback rallies as U.S. Treasury yields surge, Asian shares consolidate - Friday, February 22nd, 2019 

Market Roundup

  • U.S., China haggle over toughest issues in trade war talks
     
  • Trump to meet Chinese Vice Premier Liu He on Friday -White House
     
  • China sees "enormous potential" in Saudi economy as crown prince visits
     
  • China's January home price growth slips to 9-month low
     
  • Bank of Canada head says path back to neutral rates 'highly uncertain'
     
  • EU debates how and when to start trade talks with Trump
     
  • Australia seeks to reassure investors over coal ban at China port
     
  • Australia's central bank says next rate move could still be up
     
  • RBNZ proposes capital ratio increase to 16 pct for top banks
     
  • U.S.-based leveraged loan funds extend cash withdrawals -Lipper
     
  • Foreign CB US debt holdings +$5.069 bln to $3.431 tln Feb 21 week
     
  • Treasuries +$339 mln to $3.036 tln, agencies +4.561 bln to $324.688 bln
     
  • Japan Jan CPI, Core Nationwide YY, 0.8%, 0.8% f’cast, 0.7% prev
     
  • Japan Jan CPI, Overall Nationwide, 0.2%, 0.3% prev

Economic Data Ahead

  • (0400 ET/0900 GMT) Germany Feb Ifo Business Climate New, 99.0 f’cast, 99.1 prev
     
  • (0400 ET/0900 GMT) Germany Feb Ifo Curr Conditions New, 103.9 f’cast, 104.3 prev
     
  • (0400 ET/0900 GMT) Germany Feb Ifo Expectations New, 94.2 f’cast, 94.2 prev
     
  • (0500 ET/1000 GMT) EZ Jan HICP Final MM, -1.1% f’cast, 0.0% prev
     
  • (0500 ET/1000 GMT) EZ Jan HICP Final YY, 1.4% f’cast, 1.4% prev
     
  • (0500 ET/1000 GMT) EZ Jan HICP-X F,E,A&T Final YY, 1.1% f’cast, 1.1% prev

Key Events Ahead

  • (0330 ET/0830 GMT) Swedish Central Bank minutes from the monetary policy will be published in Stockholm
     
  • (0400 ET/0900 GMT) Press conference with Austrian Federal Reserve Chairman and ECB Council member Ewald Nowotny in Brussels
     
  • (0840 ET/1340 GMT) Atlanta Fed President Raphael Bostic speaks in New York
     
  • (1000 ET/1500 GMT) Bank of France Governor François Villeroy speaks in Lisbon
     
  • (1015 ET/1515 GMT) New York Fed President John Williams and San Francisco Fed President Mary Daly participates in a panel discussion in New York
     
  • (1115 ET/1615 GMT) ECB President Mario Draghi speaks in Bologna, Italy
     
  • (1200 ET/1700 GMT) Fed Vice Chairman Richard Clarida speaks in New York
     
  • (1230 ET/1730 GMT) New York Fed Executive Vice President Simon Potter speaks in New York
     
  • (1330 ET/1830 GMT) Fed's Bullard, Harker and Quarles participates in panel in New York
     
  • (1730 ET/2230 GMT) New York Fed President John Williams speaks in New York
     

FX Beat

DXY: The dollar index gained, underpinned by a rise in the U.S. Treasury yields. The greenback against a basket of currencies trades 0.05 percent up at 96.65, having touched a low of 96.29 on Wednesday, its lowest since February 6. FxWirePro's Hourly Dollar Strength Index stood at 43.58 (Neutral) by 0500 GMT.

EUR/USD: The euro consolidated within narrow ranges, as investors’ awaited German Ifo business climate index due later in the session for potential catalysts for the common currency. The European currency traded flat at 1.1348, having touched a high of 1.1371 on Wednesday, its highest since Feb. 6. FxWirePro's Hourly Euro Strength Index stood at 48.04 (Neutral) by 0500 GMT. Investors’ attention will remain on Eurozone consumer price index, ahead of series of speeches by Fed officials. Immediate resistance is located at 1.1368 (Feb.7 High), a break above targets 1.1394 (Jan. 23 High). On the downside, support is seen at 1.1308 (10-DMA), a break below could drag it till 1.1289 (Feb. 18 Low).

USD/JPY: The dollar surged, reversing some of its previous session losses, as markets continue to closely watch talks between U.S. and Chinese trade negotiators in Washington, with little more than a week left before a U.S.-imposed deadline for an agreement expires. The major was trading 0.1 percent up at 110.79, having hit a high of 110.95 on Wednesday, its highest since February 14.  FxWirePro's Hourly Yen Strength Index stood at 43.58 (Neutral) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of series of speeches by Fed officials. Immediate resistance is located at 111.05 (Feb. 13 Low), a break above targets 111.40 (Dec. 26 Low). On the downside, support is seen at 110.25 (Feb.15 Low), a break below could take it lower at 109.60 (Feb. 7 Low).

GBP/USD: Sterling eased, extending losses for the third straight session, on concerns that Britain could leave the EU bloc on the March 29 exit date without a deal, if Prime Minister Theresa May fails to secure changes to her Brexit deal from Brussels. The major traded flat at 1.3033, having hit a high of 1.3109 on Wednesday; it’s highest since February 1.  FxWirePro's Hourly Sterling Strength Index stood at 75.45 (Slightly Bullish) 0500 GMT. Immediate resistance is located at 1.3103 (Feb. 4 High), a break above could take it near 1.3160 (January 31 High). On the downside, support is seen at 1.2996 (21-DMA), a break below targets 1.2928 (10-DMA). Against the euro, the pound was trading 0.1 percent down at 86.98 pence, having hit a high of 86.72 on Tuesday, it’s highest since Jan. 29.

AUD/USD: The Australian dollar rebounded from a 9-day low touched in the previous session, after Reserve Bank of Australia Governor Philip Lowe stated that the outlook for the economy remained positive, indicating no inclination to ease anytime soon. The Aussie trades 0.1 percent up at 0.7097, having hit a high of 0.7206 the day before; it’s highest since February 6. FxWirePro's Hourly Aussie Strength Index stood at -89.74 (Slightly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7060 (Feb.8 Low), a break below targets 0.7016 (Dec. 27 Low). On the upside, resistance is located at 0.7135 (Feb 13 High), a break above could take it near 0.7173 (Feb. 19 High).

NZD/USD: The New Zealand dollar slumped to an over 1-week low after Reserve Bank of New Zealand proposed capital ratio increase to 16 percent for top banks. The Kiwi trades 0.3 percent down at 0.6780, having touched a low of 0.6757, its lowest level Feb. 13. FxWirePro's Hourly Kiwi Strength Index was at -140.53 (Highly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data.  Immediate resistance is located at 0.6850 (5-DMA), a break above could take it near 0.6911 (Dec. 11 High). On the downside, support is seen at 0.6744 (Feb. 7 Low), a break below could drag it below 0.6719 (Feb. 12 Low).

Equities Recap

Asian shares consolidated within narrow, as a deteriorating global economic outlook outweighed signs of progress in trade talks between China and the United States.

MSCI's broadest index of Asia-Pacific shares outside Japan traded flat.

Tokyo's Nikkei fell 0.2 percent to 21,425.51 points, Australia's S&P/ASX 200 index surged 0.5 percent to 6,167.30 points and South Korea's KOSPI rallied 0.1 percent to 2,230.50 points.

Shanghai composite index rose 1.8 percent to 2,801.24 points, while CSI300 index traded 2.2 percent up at 3,517.00 points.

Hong Kong’s Hang Seng traded 0.3 percent higher at 28,711.67 points. Taiwan shares added 0.05 percent to 10,322.92 points.

Commodities Recap

Crude oil prices declined after the United States reported its crude output hit a record 12 million barrels per day (bpd), undermining efforts by producer cartel OPEC to withhold supply and tighten global markets. International benchmark Brent crude was trading 0.1 percent up at $66.88 per barrel by 0504 GMT, having hit a high of $67.36 on Wednesday, its highest since November 19. U.S. West Texas Intermediate was trading 0.05 percent higher at $56.86 a barrel, after rising as high as $57.56 on Thursday, its highest since the November 16.

Gold prices rose as optimism over U.S.-China trade talks pressured the dollar. Spot gold was trading 0.1 percent up at $1,324.59 per ounce by 0523 GMT, having touched a high of $1,346.61 per ounce on Wednesday, its highest level since April 20. U.S. gold futures were steady at $1,327.5 per ounce.

Treasuries Recap

The Japanese government bond prices edged higher, with the 10-year JGB yield easing half a basis point to minus 0.050 percent. The 20-year yield slipped 1 basis point to 0.390 percent, its lowest since November 2016.

The Australian government bond futures fell, with the three-year bond contract off 5.5 ticks at 98.350. The 10-year contract dropped 4 ticks to 97.9050.

The Canadian government bond prices were lower across the yield curve. The two-year fell 4.5 Canadian cents to yield 1.795 percent and the 10-year declined 19 Canadian cents to yield 1.917 percent.

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July 2 15:00 UTC Released

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449.6 Stale

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