Asia Roundup: Dollar nervous ahead of the expected Fed hike; halt in oil, equities slide provide some traction - Tuesday, 15th December, 2015.

 Market Roundup

• Indonesia Nov Trade Balance (Bln Of $) Decreases to -0.35 Bln $ (Forecast 0.84 Bln $) versus previous 1.01 Bln $
  
  
• Indonesia Nov Exports Growth YY Increases to -17.58 % (Forecast -11.35 %) versus previous -20.98 %
  
  
• Indonesia Nov Imports Growth YY Increases to -18.03 % (Forecast -19.40 %) versus previous -27.81 %
  
  
• Dutch Oct Retail Sales +2.3 Pct Y/Y after Revised +4.2 pct in September - CBS
  
  
• Australia Q3 house price index +2.0% q/q, as forecast, +10.7% y/y.
  
  
• Australia Nov new vehicle sales +1.0% m/m, Oct -3.6%.
  
  
• NZ forecasts FY '15/16 OBEGAL NZ$401 mln, NZ$356 mln surplus in '16/17, near balance, '15/16 net debt 26.9% of GDP, down to 24% by '20, year-to-March '16 GDP +2.1%, gradual economic improvement to continue, some risks.
  
  
• Australia '15/16 budget deficit A$37.4 bln, A$35.1 bln forecast in May, debt to peak at 18.5% of GDP in '17/18, eyes '15/16 GDP at +2.5%, CPI +2%, '16/17 +2.75%, +2.25%, deficit to fall into '18/19 to A$14.2 bln.
  
  
• BoJ Tankan price expectations survey - Firms see CPI +1% in year, prev survey +1.2%, +1.3% in three-years, +1.4% in five, prev +1.4%, +1.5%.
  
  
• Nissan CEO Ghosn - JPY competitive, producing in Japan competitive - Reuters.
  
  
• PBOC fixes yuan at 6.4559 vs USD, weakest since July '11.
  
  
• Fitch - Sharp China slowdown would hit global growth hard.
  
  
• RBA Dec 1 minutes - Room to ease if necessary, inflation affords scope, data mostly positive, AUD adjusting to commodity price declines, China concerns.

• (0300 ET/0800 GMT) Spain Nov CPI,   -0.3% y/y forecast; last +0.6% m/m, -0.7% y/y.
  
  
• (0300 ET/0800 GMT) Spain Nov HICP,  +0.2% m/m, -0.4% y/y forecast; last +0.3%, flash -0.4%.
  
  
• (0315 ET/0815 GMT) Switzerland Nov producer/import prices, -0.1% forecast; last +0.2% m/m, -6.6% y/y.
  
  
• (0430 ET/0930 GMT) Great Britain Nov CPI,   -0.1% m/m, +0.1% y/y forecast; last +0.1%, -0.1%.
  
  
• (0430 ET/0930 GMT) Great Britain Nov - core, unch m/m, +1.2% y/y forecast; last +0.3%, +1.1%.
  
  
• (0430 ET/0930 GMT) Great Britain Nov RPI,   -0.1% m/m, +0.9% y/y forecast; last  unch, +0.7%.
  
  
• (0430 ET/0930 GMT) Great Britain Nov RPIX,  +1.0% y/y forecast; last unch m/m, +0.8% y/y.
  
  
• (0430 ET/0930 GMT) Great Britain Nov PPI - output, -0.1% m/m,  -1.3% y/y forecast; last  unch,  -1.3%.
  
  
• (0430 ET/0930 GMT) Great Britain Nov - core output, unch m/m,  +0.1% y/y forecast; last -0.1%,  +0.3%.
  
  
• (0430 ET/0930 GMT) Great Britain Nov PPI input,    -1.1% m/m, -12.4% y/y forecast; last +0.2%, -12.1%.
  
  
• (0500 ET/1000 GMT) Germany Dec ZEW current conditions index, 54.2 forecast; last 54.4.
  
  
• (0500 ET/1000 GMT) Germany Dec ZEW economic sentiment index, 15.0 forecast; last 10.4.
  
  
• (0500 ET/1000 GMT) Eurozone Q3  employment; last +0.3% q/q, +0.8% y/y.
  
  
• (0830 ET/1330 GMT) United States Dec NY Fed Empire State mfg index, -6.00 forecast; last -10.74.
  
  
• (0830 ET/1330 GMT) United States Nov CPI,     unch m/m, +0.4% y/y forecast; last +0.2%, +0.2%.
  
  
• (0830 ET/1330 GMT) United States Nov - core, +0.2% m/m, +2.0% y/y forecast; last +0.2%, +1.9%.
  
  
• (0830 ET/1330 GMT) United States Nov real weekly earnings, unch m/m forecast; last +0.2%.
  
  
• (1000 ET/1500 GMT) United States Dec NAHB housing market index, 63 forecast; last 62.
  
  
• (1130 ET/1630 GMT) United States Nov Cleveland Fed median CPI; last +0.2% m/m.

• N/A   Belgium E1.6-2.0 bln 3/12-mo Tsy certificate, Spain 3/9-mo bill auctions.
  
  
• (0300 ET/0800 GMT) ECB Pres Draghi, EU Dijsselbloem parliamentary testimony.
  
  
• (0330 ET/0830 GMT) Riksbank policy announcement, no change in -0.35% repo rate forecast.
  
  
• (0430 ET/0930 GMT) ECB 0.05% 7-day refi, E68.5 bln allotment forecast, last bln.
  
  
• (0500 ET/1000 GMT) BoE DepGov Bailey, BoE Pomeroy parliamentary testimony.
  
  
• (0500 ET/1000 GMT) Austria bln total 3.4% and 1.2% 2022 and 2025 RAGB auctions.
  
  
• (0700 ET/1200 GMT) BoE ChiefEcon Haldane in London panel discussion/BoE quarterly bulletin.
  
  
• N/A   FOMC begins two-day meeting.
  
  
• (1100 ET/1600 GMT) BoC Fin'l System Review/16:45 BoC Gov Poloz, Wilkins press conference.
  
  
• (1600 ET/2100 GMT) United States Treasury Oct int'l capital flows data, Sept net $175.1 bln outflow.
  
  
• (1830 ET/2330 GMT) RBA AsstGov Debelle speech at Sydney conference.

FX Beat 

USD:  The dollar was firm versus the yen and euro on Tuesday following a recent wave of selling, taking its cue from calmer oil prices and steadier equity markets. The dollar index edged down about 0.1 percent to 97.504 and remained vulnerable from a two-day Fed policy-meet on expectations of interest rates hike for the first time in almost a decade.

EUR/USD: The euro was trading steady, off from a 6-week peak of $1.1048 overnight. It currently trades 0.35% higher at 1.1027 levels, after having touched a daily high of 1.1030 levels. The  pair extends its bullish run post-ECB troughs, with markets viewing the recent stretch of gains as the extension of the short-squeeze triggered by less aggressive easing stance by the ECB. Immediate resistance located at 1.1049 (Dec 14 High) and on the flip side, support is placed at 1.0993 (5-DMA). The euro rose 72.55 pence against the Pound after rising to a 7-week high of 73.01 overnight, while against the yen, it was slightly higher at $1.1011.

USD/JPY: The pair is currently trading at 120.83 levels after having touched a daily high of 121.18 levels. Cautious traders have trimmed their dollar positions, awaiting on how the Fed might pace for additional monetary tightening next year. Dollar-yen to stay capped between 120-125 on Fed's expected interest rate hike, while BoJ refrains from fresh stimulus. Initial support is seen at 120.30 levels, while immediate resistance is located at 121.31 levels on the upside.

AUD/USD: The Australian dollar gained about 0.5 percent to $0.7279 after having hit a 3-week low of $0.7160 on Monday. It has strengthened by relative upbeat minutes from the Reserve Bank of Australia's December policy review, which said recent positive economic trends suggested a steady interest rate outlook in the near term. Currently it trades at 0.7253 levels, having touched a daily high of 0.7283 levels. Resistance is faced at Friday's 0.7280 high with break targeting 0.7335 and then 0.7360. On the downside, support is located at at 0.7236 (21 DMA and session lows), and further below at 0.7190 (55 & 100-Day MAs).

NZD/USD: The New Zealand dollar rose to $0.6810, extending gains beyond 7-week highs on Tuesday, on expectations of a rise in milk prices at a dairy auction due later in the day. It has gained more than 2 cents since the RNZ last week said it might be done cutting interest rates. A broadly weaker USD also supporting gains in the pair. Strong resistance is located in 0.6810-20 zone, while on the downside it faces support at 0.6725 levels. 

USD/CNY: China's yuan weakened against the dollar on Tuesday after PBOC set its official midpoint rate at 6.4559 per dollar prior to the market open on Tuesday, its weakest level since July 2011, and 0.1 percent weaker than the previous fix of 6.4495. In the spot market, the yuan opened at 6.4640 per dollar and hit 6.4691 in early trade, the weakest intraday level since mid-July 2011. By midday it was trading at 6.4667, 0.08 percent weaker than the previous close. Offshore, the yuan was trading 1.30 percent weaker than the onshore spot at 6.5491 per dollar. Against the euro, it was trading at 7.1148, weaker than the previous close of 7.0806, and was nearly flat against the yen at 5.3397. 

Equities Recap

Asian shares firmed on Tuesday as recently volatile crude oil prices showed some stability, though gains were limited by caution ahead of a widely anticipated U.S. interest rate increase by the Federal Reserve.

MSCI's broadest index of Asia-Pacific shares outside Japan extended early gains and added 0.5 percent.

Australia's S&P/ASX 200 Index edged down 0.27 pct at 4,915.40 points, while Nikkei closes down 1.68 pct at 18,565.90 with Seoul Shares close up 0.23 pct.


Commodities Recap

Gold suffered overnight losses on Tuesday and it looked vulnerable to drop back to multi-year lows as it  has already dropped 10 percent for the year, its third straight annual decline on expectations of a U.S. rate hike later in this week. Higher rates are expected to hurt demand for non-interest-paying bullion. Spot gold edged up 0.2 percent to $1,064.20 an ounce by 0346 GMT, after a 1.1-percent slide on Monday. The price is only about $20 short of a near 6-year low of $1,045.85 reached earlier this month.

Brent crude was steady in Asian trade on Tuesday, inched higher to $37.94 after falling as low as $36.33 a barrel on Monday, its weakest since December 2008. A fall below $36.20 would take oil down to levels not seen since 2004. U.S. crude oil edged up 0.1 percent to $36.37 after dropping as low as $34.53 on Monday before rebounding to end nearly 2 percent higher. 

Treasuries Recap

U.S. 10-Year Treasuries yield stood at 2.209 percent down by 0.016 versus previous close of 2.225 percent on Monday.

Australian government bond futures were softer with the 3-year bond contract off 2 ticks at 97.845. The 10-year contract eased 2 ticks to 97.0925, while the 20-year contract was steady at 96.6100.

New Zealand government bonds gained, sending yields lower across the curve, in particular at the long end.

Canadian government bond prices were lower across the maturity curve, with the benchmark 10-year dropped 59 Canadian cents to yield 1.471 percent, while 2-year price down 6 Canadian cents to yield 0.509 percent.  The Canada-U.S. two-year bond spread was 2.6 basis points wider at minus 43.9 basis points, near its deepest negative spread in more than eight years as Treasuries underperformed ahead of a likely Federal Reserve rate hike this week.