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Asia Roundup: Dollar gains against yen on upbeat U.S. economic data, gold off 3-week peak, investors eye EZ prelim Markit PMI - Friday, March 22nd, 2019

Market Roundup

  • May gets two-week Brexit reprieve from impatient EU
     
  • Five percent? EU leaders doubt May's Brexit vote chances          
     
  • Japan firms see prolonged Sino-US trade war, China slowdown to persist-Reuters poll
     
  • U.S. imposes first new North Korea sanctions since failed summit
     
  • Japan Feb CPI, Core Nationwide YY, 0.7%, 0.8% f'cast, 0.8% prev
     
  • Japan Feb CPI, Overall Nationwide, 0.2%, 0.2% prev
     
  • Japan Mar Nikkei Mfg PMI Flash, 48.9, 48.9 prev
     

Economic Data Ahead

  • (0415 ET/0815 GMT) France Mar Markit Mfg Flash PMI, 51.5 f'cast, 51.5 prev
     
  • (0415 ET/0815 GMT) France Mar Markit Serv Flash PMI, 50.7 f'cast, 50.2 prev
     
  • (0415 ET/0815 GMT) France Mar Markit Comp Flash PMI, 50.7 f'cast, 50.4 prev
     
  • (0430 ET/0830 GMT) Germany Mar Markit Mfg Flash PMI, 48.0 f'cast, 47.6 prev
     
  • (0430 ET/0830 GMT) Germany Mar Markit Service Flash PMI, 54.8 f'cast, 55.3 prev
     
  • (0430 ET/0830 GMT) Germany Mar Markit Comp Flash PMI, 52.7 f'cast, 52.8 prev
     
  • (0500 ET/0900 GMT) EZ Mar Markit Mfg Flash PMI, 49.5 f'cast, 49.3 prev
     
  • (0500 ET/0900 GMT) EZ Mar Markit Serv Flash PMI, 52.7 f'cast, 52.8 prev
     
  • (0500 ET/0900 GMT) EZ Mar Markit Comp Flash PMI, 52.0 f'cast, 51.9 prev
     

Key Events Ahead

  • N/A ECB's Mario Draghi participates in European Council meeting in Brussels
     
  • (0340 ET/0740 GMT) Norway Central Bank Deputy Governors Jon Nicolaisen and Egil Matsen speaks in Harstad, Norway
     
  • (0415 ET/0815 GMT) ECB Board Member Luis de Guindos makes open remarks at the ECB colloquium in Frankfurt
     
  • (0430 ET/0830 GMT) ECB Board Member Ignazio Angeloni speaks at the ECB colloquium in Frankfurt
     
  • (0605 ET/1005 GMT) Speeches by Governor Oystein Olsen and Carine Smith Ihenacho, chief corporate governance officer in Norges Bank Investment Management in Loen, Norway
     
  • (0630 ET/1030 GMT) ECB Board Member Andrea Enria participates in session 2 at the ECB colloquium in Frankfurt

FX Beat

DXY: The dollar index extended prior session's rebound after data showed the number of Americans filing applications for unemployment benefits declined more than expected last week.  The greenback against a basket of currencies traded 0.5 percent up at 96.38, having touched a low of 95.74 on Wednesday, its lowest since Feb 4. FxWirePro's Hourly Dollar Strength Index stood at -18.41 (Neutral) by 0500 GMT.

EUR/USD: The euro steadied after easing from a 1-1/2 month peak in the previous session after overnight data showed Euro zone consumer confidence rose by 0.2 point to -7.2 in March from -7.4 February.  The European currency traded flat at 1.1378, having touched a high of 1.1448 on Wednesday, its highest since Feb. 4. FxWirePro's Hourly Euro Strength Index stood at 38.13 (Neutral) by 0500 GMT. Investors’ attention will remain on a series of data from the Eurozone economies, ECB De Guindos speech, EZ current account and Markit prelim PMI, ahead of the U.S. Markit flash PMI's, existing home sales, and wholesale inventories. Immediate resistance is located at 1.1419 (Feb 28 High), a break above targets 1.1488 (Feb 1 High). On the downside, support is seen at 1.1336 (Jan. 22 Low), a break below could drag it till 1.1309 (Mar. 4 Low).

USD/JPY: The dollar nudged higher, after rebounding from a 5-week low in the prior session, after data released yesterday showed U.S. weekly unemployment benefits claims fell more than expected last week, indicating strong labor market conditions. The major was trading 0.05 percent up at 110.81, having hit a low of 110.29 the day before, its lowest since Feb. 15. FxWirePro's Hourly Yen Strength Index stood at -18.41 (Neutral) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. Markit flash PMI's, existing home sales, and wholesale inventories. Immediate resistance is located at 111.07 (Feb. 26 High), a break above targets 111.46 (Mar. 12 High). On the downside, support is seen at 110.25 (Feb. 15 Low), a break below could take it lower at 109.63 (Dec. 31 Low). 

GBP/USD: Sterling bounced back from near 2-week lows despite growing fears of a no-deal Brexit if the British lawmakers held firm in their rejection of Prime Minister Theresa May's EU withdrawal deal. On Thursday, the Bank of England kept interest rates steady at 0.75 percent, as most businesses braced for a no-deal Brexit that would likely dent economic growth and jobs. The major traded 0.3 percent up at 1.3143, having hit a low of 1.3003 on Thursday; it’s lowest since Mar. 11. FxWirePro's Hourly Sterling Strength Index stood at -157.63 (Highly Bearish) 0500 GMT. Investors’ will remain on UK quarterly bulletin, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3198 (Mar. 5 High), a break above could take it near 1.3254 (Mar. 4 High). On the downside, support is seen at 1.3068 (Mar. 7 Low), a break below targets 1.3004 (Mar. 4 Low). Against the euro, the pound was trading 0.2 percent up at 86.56 pence, having hit a low of 87.22 on Thursday, it’s lowest since Feb. 22.

AUD/USD: The Australian dollar declined, extending previous session losses, as the greenback gained on strong U.S. economic data. The Aussie trades 0.1 percent down at 0.7105, having hit a high of 0.7168 on Thursday, it’s highest since Feb. 27. FxWirePro's Hourly Aussie Strength Index stood at -34.25 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7078 (Mar. 18 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 gained, supported by data showing the country's economy expanded rapidly last quarter. The Kiwi trades 0.2 percent up at 0.6890, having touched a high of 0.6938 on Thursday, its highest level Feb. 1. FxWirePro's Hourly Kiwi Strength Index was at 30.26 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6944 (Dec. 5 High), a break above could take it near 0.6969 (Dec. 4 High). On the downside, support is seen at 0.6808 (Mar. 14 Low), a break below could drag it below 0.6757 (Feb. 22 Low).

Equities Recap

Asian shares touched 6-1/2-month highs after better-than-expected U.S. data and optimism in the tech sector boosted Wall Street stocks.

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

Tokyo's Nikkei rose 0.1 percent to 21,627.34 points, Australia's S&P/ASX 200 index gained 0.5 percent to 6,195.20 points and South Korea's KOSPI surged 0.1 percent to 2,187.87 points.

Shanghai composite index declined 0.1 percent to 3,098.86 points, while CSI300 index traded 0.2 percent down at 3,828.20 points.

Hong Kong’s Hang Seng traded 0.3 percent lower at 29,979.26 points. Taiwan shares added 0.3 percent to 10,639.07 points

Commodities Recap

Crude oil prices rose, hovering towards its 2019 peaks reached in the previous session, boosted by supply cuts led by producer cartel OPEC and by U.S. sanctions against Iran and Venezuela. International benchmark Brent crude was trading 0.1 percent up at $67.73 per barrel by 0504 GMT, having hit a high of $68.67 the day before, its highest since Nov. 13. U.S. West Texas Intermediate was trading 0.05 percent higher at $59.85 a barrel, after rising as high as $60.37 on Thursday, its highest since the Nov. 12.

Gold prices declined, hovering further away from a 3-week peak hit in the prior session, as appetite for riskier assets improved following upbeat U.S. economic data. Spot gold was 0.1 percent down at $1,308.09 per ounce at 0508 GMT, having touched a high of $1,320.26 on Thursday, its highest since Feb 28 and is on track for a third consecutive week of gain. U.S. gold futures were flat at $1,307.50 an ounce.

Treasuries Recap

The Japanese government bond yields plunged to their lowest since November 2016, with the 10-year JGB futures rising 0.23 point to 152.96 yen. The benchmark 10-year yield shed 2.5 basis points to minus 0.065 percent, its lowest since Nov. 9, 2016. The yields on super-long maturities fell the most, with the 20-year yield down 3.0 basis points at 0.360 percent and the 30-year yield off 3.5 basis points at 0.530 percent. The 40-year yield shed 4.0 basis points to 0.590 percent.

The yields on Australian three-year notes have eased 29 basis points since the start of March to hit 1.432 percent, below the cash rate and the lowest since late 2016. The 10-year bond futures contract has surged about 39 ticks to 98.1650 in almost three weeks, taking it nearer to the all-time peak of 98.2000.

The Canadian government bond prices edged lower across much of the yield curve, with the 10-year falling 6 Canadian cents to yield 1.673 percent. Still, the 10-year yield touched its lowest intraday since June 2017 at 1.635 percent.

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