Asia Roundup: Dollar slips after nearing 13-year high as Traders buy back Euro, Asian Shares steady- Tuesday, December 1st, 2015

Market Roundup

• India Nov Nikkei Markit Mfg PMI Decrease To 50.3 (Forecast 51.0) Vs Previous 50.7
  
  
• Australia Dec RBA Cash Rate Stays Flat At 2.00 % (Forecast 2.00 %) Vs Previous 2.00 %
  
  
• Indonesia Nov Inflation YY Decrease To 4.89 % (Forecast 4.88 %) Vs Previous 6.25 %
  
  
• Indonesia Nov Core Inflation YY Decrease To 4.77 % (Forecast 4.94 %) Vs Previous 5.02 %
  
  
• Indonesia Oct Foreign Tourist Decrease To 2.11 % Vs Previous 9.84 %
  
  
• Japan government pension investment fund begins currency hedging - WSJ.
  
  
• Japan EconMin Amari - Companies beginning to implement planned CAPEX, some concerns over effect of next tax hike - Reuters.
  
  
• MoF survey - Q3 CAPEX +11.2% y/y, +5.4% q/q ex-software, recurring profits +9.0% y/y, sales +0.1%.
  
  
• Japan Nov mfg PMI - final 52.6, highest in 20-mos, flash 52.8, Oct 52.4.
  
  
• SWIFT - China yuan becomes second most used currency for payments with Japan.
  
  
• PBOC Vice Gov Yi Gang - No basis for yuan to continue to devalue, inclusion in SDR to make yuan more stable, facilitate cross border investment, will still intervene on abnormal volatility, stable interest rates desired - RTRS.
  
  
• China Nov Caixin/Markit mfg PMI 48.6, still in contraction, Oct 48.3, Nov output index 50.0, stops shrinking for first time in six months.
  
  
• China Nov off'l mfg PMI 49.6, 49.8 forecast, services PMI 53.6, Oct 49.8, 53.1.
  
  
• Fitch - Renminbi reserve status still a way off despite SDR entry.
  
  
• RBA leaves policy as is as forecast, OCR 2%, no change in statement.
  
  
• Australia Q3 c/a deficit A$18.1 bln, A$16.5 bln forecast, net exports GDP impact +1.5%, +1.0% forecast.
  
  
• Australia Nov AIG PMI +2.3 pts to 52.5.
  
  
• Australia Oct bldg approvals +3.9% m/m, -2.3% forecast, private houses -2.1%.
  
  
• Australia Nov RPData home prices -1.5% m/m, +8.2% y/y, Oct +0.2%, +10.1%.
  
  
• New Zealand Q3 terms of trade index -3.7% q/q, -2.8% forecast, export volumes +3.7%, import prices +7.3%, export prices +3.4%, +3.3/+5.4/+3.0% forecast.
  
  
• New Zealand Nov QV residential property price index +15% y/y, Oct +14%.

• (0145 ET/0645 GMT)    China Q3  GDP, +0.2% q/q, +0.9% y/y forecast; last +0.2%, +1.2%.
  
  
• (0230 ET/0730 GMT)    Sweden Nov PMI mfg, 54.0 forecast; last  53.5.
  
  
• (0300 ET/0800 GMT)    Norway Nov PMI mfg, 48.0 forecast; last  48.3.
  
  
• (0315 ET/0815 GMT)    China Oct retail sales; last +0.2% y/y.
  
  
• (0315 ET/0815 GMT)     Spain Nov PMI mfg, 52.0 forecast; last  51.3.
  
  
• (0330 ET/0830 GMT)     China Nov PMI mfg, 51.0 forecast; last  50.7.
  
  
• (0345 ET/0845 GMT)     Italy Nov PMI mfg, 54.4 forecast; last  54.1.
  
  
• (0350 ET/0850 GMT)     France Nov PMI mfg, 50.8 forecast; flash 50.8.
  
  
• (0355 ET/0855 GMT)    Germany Nov PMI mfg, 52.6 forecast; flash 52.6.
  
  
• (0355 ET/0855 GMT)    Germany Nov unemployment, 6.4% sa, -5k sa forecast; last 6.4%, -5k.
  
  
• (0355 ET/0855 GMT)    Germany Nov unemployment, 2.64 mln nsa forecast; last 2.65 mln nsa, 2.79 mln sa.
  
  
• (0400 ET/0900 GMT)    Italy Oct unemployment, 11.7% forecast; last 11.8%.
  
  
• (0400 ET/0900 GMT)    Eurozone Nov PMI mfg, 52.8 forecast; flash 52.8.
  
  
• (0430 ET/0930 GMT)    Great Britain Nov PMI mfg, 53.6 forecast; last  55.5.
  
  
• (0500 ET/1000 GMT)    Eurozone Oct unemployment, 10.8% forecast; last 10.8%.
  
  
• (0500 ET/1000 GMT)    Italy Q3  GDP - final, +0.2% q/q, +0.9% y/y forecast; prelim +0.2%, +0.9%.
  
  
• (0830 ET/1330 GMT)    Canada Q3  GDP, +2.4% AR forecast; last -0.1% q/q, -0.5% AR.
  
  
• (0945 ET/1445 GMT)    United States Nov Markit PMI mfg PMI - final; flash 52.6.
  
  
• (1000 ET/1500 GMT)    United States Nov ISM PMI mfg, 50.5 forecast; last 50.1.
  
  
• (1000 ET/1500 GMT)    United States Oct construction spending, +0.5% m/m forecast; last +0.6%.
  
  
• (1030 ET/1530 GMT)    United States Nov Dallas Fed services outlook/revenues indices; last 5.6, 7.6.
  
  
• (1330 ET/1830 GMT)    United States Nov total vehicle sales, 18.1 mln AR forecast; last 18.24 mln.

Key Events Ahead

• N/A   UN COP 21 conference in Paris (till December 11).
  
  
• N/A   ESM E1.5 bln 3-mo bill, Belgium E0.9-1.3 bln 3/6-mo tsy cert auctions.
  
  
• (0200 ET/0700 GMT) Bank of England Financial Stability Report/09:00 Gov Carney press conference.
  
  
• (0430 ET/0930 GMT) ECB 7-day refi at fixed 0.05%, E69 bln allotment forecast, last E73.8 bln.
  
  
• (0700 ET/1200 GMT) ECB/Austria CB Nowotny parliamentary testimony.
  
  
• (0830 ET/1330 GMT) OECD Switzerland economic survey.
  
  
• (1245 ET/1745 GMT) Chicago Fed Evans speech at East Lansing, MI luncheon.
  
  
• (1800 ET/2300 GMT) RBA Gov Stevens speech in Perth.

FX Beat 

USD: The dollar slipped down on Tuesday after nearing a 13-year high against a basket of currencies as traders bought back the euro, long depressed by expectations of aggressive policy easing from the European Central Bank. The dollar index dropped 0.2 percent to 100.00 after having climbed to as high as 100.31 on Monday, but remained within sight of its more than 12-year high of 100.39 hit in March. The dollar also dropped 0.3 percent against the yen to 122.70 yen, with some traders pointing to a media report that Japan's giant public pension fund started currency hedging as helping the yen.

EUR/USD: The Euro gained 0.2 percent to $1.0585 from a 7 1/2-month low of $1.05575 touched on Monday, as hefty option-related bids at $1.05 kept traders from selling down the currency further.

GBP/USD: Sterling dropped below $1.50 for the first time since April on Monday after a policymaker warned about the impact of a strong pound on inflation, but rebounded slightly as the dollar slipped on soft U.S. data. Although sterling hit a 7-month low of $1.4994 on Monday, on a trade-weighted basis it is close to 8-year highs. It was 0.3 percent up against the euro at 70.26 pence, less than a cent away from an 8-year high of 69.35 pence hit earlier this year. The cable has made a low of 1.49935 and recovered from that level . It is currently trading at 1.50918.  The pair has broken major trend line resistance 1.05750 and this confirms minor bullishness , jump till 1.5150/1.5220 is possible. On the downside minor support is around 1.5050 and below that level 1.5000/1.4980. Minor resistance is around 1.5130 and any break above 1.5130 will target next level 1.5150 (Major resistance)/1.5220. 

USD/JPY: Profit taking was seen after the US dollar index faced rejection at eight-month highs near 100.35 and slipped back to 100 mark after WSJ GPIF news. The greenback had earlier popped above 123.00 for the first time in a week, but fell sharply to hit lows of 122.64. Strong support for the pair is placed at 122.30 (Double bottom - 
Nov 27 & 24 Low), while immediate resistance is seen at 123.28 (Today's High). US ISM manufacturing report due later today will continue to influence the pair, traders will aslo track sentiment across equity markets.

AUD/USD: The Australian dollar gained up to $0.7262, from $0.7234 in early trade, pulling close to a peak of $0.7283 touched last week. It received a fillip on Tuesday as upbeat data reinforced the outlook for steady rates and burnished its reputation as a relatively high-yielding asset.

USD/CAD: The Canadian dollar gained against the U.S. dollar on Monday as it broadly tracked movements in the price of crude oil, with attention shifting to a slew of upcoming data and events, including a Bank of Canada interest rate decision on Wednesday. The Canadian dollar settled at C$1.3353 to the greenback, or 74.89 U.S. cents, stronger than Friday's official close of C$1.3372, or 74.78 U.S. cents. The currency's strongest level of the session was C$1.3312, while its weakest was C$1.3393, a one-week low.

EUR/JPY: The pair was hit the hardest amongst the JPY complex on latest round of JPY buy-backs. WSJ GPIF news was the catalyst, EUR stands to lose most from any bond-hedging. The pair is currently trading at 130.11. 129.67 Friday low is initial support on the downside, not much major support below till 126.08 on 4/14. 130.29 (Nov 30 highs) is major resistance on the flipside, capping gains in the pair.

NZD/USD: The New Zealand dollar rallied to a one-month peak at $0.6638, with much talk of demand against the yen and euro where short-term yields are near zero or negative and as investors anticipated a rise in dairy prices at a global auction to be held early Wednesday. The pair held support at 0.6550 in yesterday's trade and edged higher to break and close above trendline resistance at 0.6568. We see some signs that a broader rally might ensue, bulls could target cloud top at 0.6662 and futher gains could see 0.6730 (23.6 % Fibo retracement of 0.6196 - 0.6896 rise). The pair has hit session highs at 0.6647 and cooled off slightly to trade at 0.6624 at the time of writing, 
immediate resistance is seen at 0.6662 (cloud top), while support on the downside lies at 0.6578 (session lows 1 Dec)

GBP/NZD: The pair has made a low of 2.2700 and slightly recovered from that level.  Overall trend is still bullish as long as support 2.0680 holds. On the higher side major resistance is around 2.2800 and break above targets 2.2850/2.2910/2.3070.  The major support is around 2.0680 and below that will take to next level at 2.0600/2.04950.

USD/CNY: Outside of the G10 currencies, the Chinese yuan eased 0.2 percent after the International Monetary Fund admitted the Chinese currency to its benchmark Special Drawing Rights basket.

Equities Recap

Asian shares were higher on Tuesday, shrugging off one Chinese factory survey that did little to ease persistent concerns about cooling growth in the economy, while a private survey showed a hint of stabilisation.

MSCI's broadest index of Asia-Pacific shares outside Japan extended early gains and was up 1.1 percent, while Nikkei closed up 1.34 pct at 20,012.40. China's major stock indexes opened down, with the CSI300 index and the Shanghai Composite Index both slipping 0.1 percent down in early trading.

Australia's S&P/ASX 200 Index ended up 1.82 Pct at 5,260.50 points with Seoul shares climbed up 1.66 Pct.

Commodities Recap

Gold gained nearly 1 percent on Tuesday, extending gains above a near 6 year low on short covering and as the dollar slipped from multi-month highs. Spot gold increased to a session high of $1,074.34 an ounce, before giving up some gains to trade up 0.7 percent at $1,071.40 by 0319 GMT, pressured by the recently robust dollar and growing expectations of higher U.S. interest rates. It had gained 0.5 percent on Monday.

U.S. crude oil prices steadied after volatile trading overnight in which they first rallied and then erased gains after a survey estimated higher OPEC output. U.S. crude added 0.4 percent to $41.81 a barrel. Brent crude futures edged up 0.1 percent to $44.66.

Treasuries Recap

U.S. 10-Year Treasuries yield last stood at 2.225 percent vs U.S. close of  2.218 percent on Monday. 

Australian Government Bond futures were split, with the 3-year bond contract dropped by 1 tick at 97.890. The 10-year contract was 2 ticks steady at 97.1300, while the 20-year contract gained 2.5 ticks to 96.6400.

New Zealand Government Bonds eased, sending yields 1 basis point higher in the middle of the curve.

Canadian government bond prices were mixed across the maturity curve, with the 2-year price up half a Canadian cent to yield 0.629 percent and the benchmark 10-year dropping 2 Canadian cents to yield 1.568 percent. The 20-year issue gained almost 17 cents to yield 2.259 percent.