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Asia Roundup: Dollar eases against yen as U.S. existing home sales decline more than expected, oil near 2019 highs after U.S. ends all Iran sanction exemptions, Asian shares steady - Tuesday, April 23rd, 2019

Market Roundup

  • BOJ signals readiness to combine steps if more stimulus needed
     
  • U.S. to end all waivers on imports of Iranian oil, crude price jumps  
             
  • Cain withdraws from Fed consideration, citing lower pay, influence
     
  • Democratic presidential candidates divided over impeaching Trump
     
  • Oil near 2019 highs after U.S. ends all Iran sanction exemptions
     

Economic Data Ahead

  • (1000 ET/1400 GMT) EZ Apr Consumer Confid. Flash, -7.0 f'cast, -7.2 prev

Key Events Ahead

  • No significant event scheduled

FX Beat

DXY: The dollar index rose after falling for two straight sessions, amid geopolitical concerns as Washington ends sanctions waivers on Iranian oil, while markets eye the release of the U.S. GDP data later in the week that could provide clear indications about the strength of the economy. The greenback against a basket of currencies traded 0.1 percent up at 97.35, having touched a high of 97.49 on Thursday, its highest since Apr. 2. FxWirePro's Hourly Dollar Strength Index stood at 45.35 (Neutral) by 0400 GMT.

EUR/USD: The euro eased, halting a 2-day rally, as the greenback surged on the back of higher U.S. 10-year Treasury yields and signs of strength in the economy. The European currency traded 0.1 percent down at 1.1251, having touched a high of 1.1323 on Wednesday, its highest since Mar. 26. FxWirePro's Hourly Euro Strength Index stood at 25.24 (Neutral) by 0400 GMT. Investors’ attention will remain on the U.S. new home sales, housing price index and Richmond Fed manufacturing index, ahead of EZ prelim consumer confidence. Immediate resistance is located at 1.1287 (Apr. 10 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 1-1/2 week trough after data released overnight showed the U.S. existing home sales declined more than expected in March amid supply constraints. The major was trading 0.1 percent down at 111.83, having hit a low of 111.65 earlier, its lowest since Apr. 12. FxWirePro's Hourly Yen Strength Index stood at 22.43 (Neutral) by 0400 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. new home sales, housing price index and Richmond Fed manufacturing index. Immediate resistance is located at 112.60 (Dec. 20 High), a break above targets 113.24 (Dec. 5 High). On the downside, support is seen at 111.20 (Apr. 3 Low), a break below could take it lower at 110.53 (Mar. 20 Low).

GBP/USD: Sterling rebounded from a 6-week low after Research Company Springboard stated that sunny weather encouraged British shoppers onto the high street over Easter, with footfall across retail destinations rising 6.5 percent on Friday, 1.2 percent on Saturday and 8.4 percent on Monday morning. The major traded 0.1 percent up at 1.2987, having hit a low of 1.2974 earlier; it’s lowest since Mar. 11. FxWirePro's Hourly Sterling Strength Index stood at 43.12 (Neutral) 0400 GMT. Investors’ attention will remain on the U.S. fundamental drivers, amid a lack of data from the UK docket. Immediate resistance is located at 1.3038 (10-DMA), a break above could take it near 1.3074 (Apr. 8 High). On the downside, support is seen at 1.2960 (Mar. 11 Low), a break below targets 1.2924 (Feb. 5 Low). Against the euro, the pound was trading 0.1 percent up at 86.62 pence, having hit a low of 86.80 on Wednesday, it’s lowest since Mar. 22.

AUD/USD: The Australian dollar slumped to an 11-day low as comments from top Chinese policymaking bodies raised investor fears that Beijing will ease up on stimulative policies after some signs of stabilisation in the economy. Moreover, the selling pressure intensified as investors remained cautious ahead of the release of first-quarter inflation data due on Wednesday. The Aussie trades 0.1 percent down at 0.7124, having hit a low of 0.7121 earlier; it’s lowest since Apr. 12. FxWirePro's Hourly Aussie Strength Index stood at -129.76 (Highly Bearish) by 0400 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7109 (Apr. 10 Low), a break below targets 0.7070 (Mar. 29 Low). On the upside, resistance is located at 0.7174 (Apr. 10 High), a break above could take it near 0.7235 (Jan. 11 High).

NZD/USD: The New Zealand dollar declined to near 1-week low on growing concern about tight global supplies after the United States announced a further clampdown on Iranian oil exports. The Kiwi trades 0.1 percent down at 0.6670, having touched a low of 0.6669, its lowest level Apr. 17. FxWirePro's Hourly Kiwi Strength Index was at -84.92 (Slightly Bearish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6758 (Apr. 9 High), a break above could take it near 0.6799 (Apr. 4 High). On the downside, support is seen at 0.6652 (Jan. 2 Low), a break below could drag it below 0.6585 (Jan. 3 Low).

Equities Recap

Asian shares steadied, hovering not far from 9-month peaks hit last week, amid concerns China may slow the pace of policy easing.

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

Tokyo's Nikkei declined 0.05 percent to 22,217.36 points, Australia's S&P/ASX 200 index rose 0.9 percent to 6,316.90 points and South Korea's KOSPI surged 0.1 percent to 2,218.10 points.

Shanghai composite index fell 0.3 percent to 3,207.14 points, while CSI 300 index traded 0.1 percent up at 4,030.98 points.

Hong Kong’s Hang Seng traded 0.05 percent lower at 29,962.58 points. Taiwan shares added 0.2 percent to 11,006.88 points

Commodities Recap

Crude oil prices traded near 2019 highs after Washington announced all Iran sanction waivers would end by May, pressuring importers to stop buying from Tehran.  International benchmark Brent crude was trading 0.2 percent higher at $74.27 per barrel by 0423 GMT, having hit a high of $74.50 on Monday, its highest since Nov. 1, 2018. U.S. West Texas Intermediate was trading 0.3 percent up at $65.85 a barrel, after rising as high as $65.97 on Monday, its highest since the Oct. 31, 2018.

Gold prices consolidated within narrow ranges as Washington moved to stop Iran's oil revenues, prompting safe haven buying, however, gains were limited by a strong greenback. Spot gold traded flat at $1,274.78 per ounce by 0427 GMT, having touched a low of $1,271.07 on Friday, its lowest since Dec. 27, 2018. U.S. gold futures were unchanged at $1,277.70 an ounce.

Treasuries Recap

The long-dated Japanese government bond prices gained, with the 20-year JGB yield and the 30-year yield easing 1 basis point each to 0.380 percent and 0.570 percent, respectively. The 40-year yield dropped half-a-basis point to 0.610 percent. The benchmark 10-year yield lost 0.5 basis point to minus 0.035 percent. The two-year yield ticked up half-a-basis point to minus 0.150 percent.

The Australian government bonds gained during Asian session as investors moved towards safe-haven buying on expectations of weaker Q1 inflation data. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, dipped 4-1/2 basis points to 1.895 percent (lowest since April 12), the yield on the long-term 30-year bond fell nearly 5 basis points to 2.514 percent and the yield on short-term 2-year traded 3-1/2 basis points lower at 1.475 percent.

The Canadian government bond prices were mixed across a steeper yield curve. The two-year gained 1 Canadian cent to yield 1.62 percent and the 10-year was down 21 Canadian cents to yield 1.788 percent. The 10-year yield rose 2.7 basis points further above the 2-year yield to a spread of 16.8 basis points, its widest since March 1.

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