Asia Roundup: Dollar struggles as Aussie soars on bullish job data, Asian shares face downside - Thursday, December 10th, 2015.

Market Roundup

• Malaysia's October Factory Output +4.2 pct from year ago vs Reuters Poll +4.3 pct
  
  
• Dutch Oct Manuf Output +1.6 pct M/M after +0.4 pct in Sept - CBS
  
  
• Dutch Nov CPI +0.7 Pct Y/Y After Revised +0.6 Pct in Oct - CBS
  
  
• Fed plans to signal gradual, cautious path on rate hikes -J. Hilsenrath, WSJ.
  
  
• Japan Q4 MoF survey - Big mfg sentiment index +3.8, Q3 +11.0, +4.0 forecast in Q1 '16, previous estimate +7.1, '15/16 CAPEX forecast at +7.5%, previous +6.1%.
  
  
• MoF flow data week-ended Dec 5 - Japanese buy net Y234.6 bln foreign stocks, Y73.1 bln bonds, sell Y110.7 bln bills; foreign investors buy net Y104.6 bln Japanese stocks, Y179.6 bln bonds, sell Y384.2 bln bills.
  
  
• Japan Nov domestic corp goods prices -0.1% m/m, -3.6% y/y, -0.3%/-3.8% forecast.
  
  
• Tokyo to back India-bound business with Y1.5 trln - Nikkei.
  
  
• China SAFE Wang - Targeted measures have limited capital outflows, modest falls in FX reserves can be tolerated, no basis for large yuan depreciation.
  
  
• BoE might send message on distant rate hike bets - Reuters.
  
  
• UK Nov RICS house price bal +49, +50 forecast, Oct rev up to +50, supply short.
  
  
• Australia Nov employment +71.4k, unemployment 5.8%, participation 65.3%, -10k, 6.0% and 65.0% forecast, full-time employment +41.6k.
  
  
• RBNZ cuts OCR 25 bps to 2.5%, as forecast, rates to steady but will ease again if necessary, China hard landing fears reduced, further NZD fall appropriate, TWI forecast at 67.7 Dec '16, CPI +1.6% Dec '16, GDP +2.2% to March '16.
  
  
• Reuters poll - RBNZ to hold steady at Jan 28 meeting, rates steady thru '16.
  
  
• New Zealand Nov electronic card retail sales +0.3% m/m, +3.7% y/y.
  
  
• New Zealand Nov REINZ median house prices -0.1% m/m, +0.8% y/y

• (0130 ET/0630 GMT) France Q3  non-farm payrolls - revised; last +0.1%.
  
  
• (0245 ET/0745 GMT) France Oct industrial output, -0.1% m/m forecast; last +0.1%.
  
  
• (0245 ET/0745 GMT) France Nov HICP - final, unch m/m, +0.2% y/y forecast; flash +0.1%, +0.2%.
  
  
• (0330 ET/0830 GMT) Sweden Nov CPI,    unch m/m, +0.2% y/y forecast; last +0.1%, +0.1%.
  
  
• (0330 ET/0830 GMT) Sweden Nov CPIF,   unch m/m, +1.1% y/y forecast; last +0.1%, +1.1%.
  
  
• (0400 ET/0900 GMT) Norway Nov CPI,   +0.2% m/m, +2.6% y/y forecast; last +0.4%, +2.5%.
  
  
• (0400 ET/0900 GMT) Norway Nov - core, unch m/m, +3.1% y/y forecast; last +0.2%, +3.0%.
  
  
• (0400 ET/0900 GMT) Norway Nov PPI; last -9.4% y/y.
  
  
• (0430 ET/0930 GMT) Great Britain Oct trade balance, GBP9.7 bln deficit forecast; last bln deficit.
  
  
• (0430 ET/0930 GMT) Great Britain Oct - non-EU,      GBP2.5 bln deficit forecast; last bln deficit.
  
  
• (0830 ET/1330 GMT) United States w/e initial jobless claims, 269k forecast; last 269k.
  
  
• (0830 ET/1330 GMT) United States Nov import/export prices, -0.7%, -0.3% m/m forecast; last -0.5%, -0.2%.

• N/A   UN COP 21 conference in Paris (final day), Italy 12-mo bill auction.
  
  
• (0315 ET/0815 GMT) Bank of Spain Gov Linde speech in Madrid.
  
  
• (0330 ET/0830 GMT) SNB policy announcement, 3-mo LIBOR target 50 bp cut to -0.75% forecast.
  
  
• (0400 ET/0900 GMT) ECB/Finland CB Liikanen press conference on Finnish economy, ECB policy.
  
  
• (0630 ET/1130 GMT) ECB Coeure speech at Brussels roundtable.
  
  
• (0700 ET/1200 GMT) Bank of England MPC announcement, minutes, unch 0.5% bank rate/QE forecast, 8-1 vote.
  
  
• (1300 ET/1800 GMT) Bank of England Gov Carney speaks, US Tsy Szubin at London events.
  
  
• (1300 ET/1800 GMT) ECB/Buba Weidmann speech in Lisbon.

FX Beat

USD: The dollar struggled on Thursday, sharp losses seen from investors paring dollar-long positions. The dollar index dropped to 97.223 on Wednesday, its lowest in over a month, and was last up about 0.1 percent at 97.454. The greenback edged up about 0.2 percent against its Japanese counterpart to 121.62 after suffering its biggest one-day drop in over 3-months, breaking out of the past month's 122.23-123.77 range.

EUR/USD: The euro edged down about 0.1 percent to $1.1009 but remained above the $1.10 level, strengthened by a central banker's suggestion that markets had been expecting too much stimulus from the European Central Bank. The pair is currently trading at 1.10074 levels after touching a low of 1.10041 levels. It struggles above 1.10 levels, with the next hurdle in sight is located at 1.1041 (Dec 9 High) and from there to 1.1072/84 (100 & 200-DMA). Selling pressure will intensify, dragging the pair towards 1.0926/27 (1h 50-SMA/ 5-DMA). It has broken major resistance 1.100 and jumped till 1.10423. Overall trend is still weak as long as resistance 1.10900 holds.

USD/JPY: Currently the pair trades at 121.68 levels, recovering from fresh session lows struck at 121.07 levels. It faces resistance at 121.89 levels and a break above can see the pair testing 122.11 levels. The extension of the rout in global equities, with the Japanese Nikkei down -1.22% accentuated the risk-off sentiment across the financial markets and hence, strengthened the demand for yen as a safe-haven. 

AUD/USD: The Australian dollar reached a high of $0.7333, drifting away from the previous session's 2-week low of $0.7169 after an unexpected increase in jobs report caught the investors by surprise. It last stood at $0.7291, up 0.9 percent. It climbed up 1.5 percent on the yen, while the euro and pound dropped two full cents and pence against the Aussie. The pair is currently trading at $0.7283 , having touched a daily high of 0.7334. It has major resistance at 0.7387 (converging trendline and 38.2% Fib of 0.8160 - 0.6907 fall) with support seen at 0.7172 levels, also the pair still trades below the 200 DMA at 0.7452 and breaks above which can see the tide turn.

NZD/USD: The kiwi dollar climbed to a high of $0.6782, from $0.6640, after the Reserve Bank of New Zealand cut interest rates to 2.50 percent but appeared less dovish than the market had anticipated. It gained more than 1 percent against the euro, pound and yen, but could not outpace Aussie. The pair is currently trading at $0.6729 levels, having touched a daily high of $0.6758 levels. It faces resistance at $0.6788 levels, break above can see the pair testing new levels and support seen at 0.6751 levels .

USD/CAD: Weaker oil prices supported the dollar hold its ground against the Canadian dollar, which languished near an 11-year trough of C$1.3623 per USD set on Tuesday. It ended Wednesday's trading at C$1.3564 to the greenback, or 73.72 U.S. cents, slightly stronger than the Bank of Canada's official close of C$1.3587, or 73.60 U.S. cents. The currency's strongest level of the session was C$1.3517, while its weakest level was C$1.3620. Against the euro, the Canadian dollar weakened to C$1.4952, its weakest level in 10 weeks.

USD/CNY: China's yuan weakened at open on Thursday after PBoC set the midpoint at 6.4236 per dollar, 0.1 percent weaker than the previous fix of 6.414, more than 4-year low for the second day. Beijing is quietly permitting the currency to depreciate after it was included in the International Monetary Fund's reserve basket. The spot market opened at 6.4300 per dollar, its weakest since Aug. 12, and was trading at 6.4385, compared with the previous close of 6.4280. The offshore yuan was trading 1.03 percent weaker than the onshore spot at 6.498 per dollar.


Equities Recap

Asian stocks stumbled on Thursday as weak oil prices continued to increase global growth worries, while the euro held solid gains after a policymaker shattered the market expectations of more easing by the European Central Bank.

MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.3 percent. Chinese and Indonesian shares were the only gainers, with the CSI300 rising 0.7 percent and the Jakarta Composite advancing 0.2 percent.

Australia's S&P/ASX200 Index edged down 0.92 pct at 5,033.60 points while Nikkei closed down 1.32 pct at 19,046.55 with Seoul shares edged up 0.24 pct.

Commodities Recap

Gold was treading water on Thursday as investors stuck to the sidelines ahead of a widely anticipated U.S. interest rate hike next week, with even a slump in the dollar failing to trigger interest in the metal. Spot gold edged up 0.2 percent to $1,074.70 an ounce by 0337 GMT, after closing down 0.1 percent in the previous session.

Crude oil prices climbed up early on Thursday, supported by a fall in U.S. crude inventories after 10 straight weeks of builds, but a global oversupply and cheap oil are still dominating the broader market. U.S. crude futures were at $37.40 per barrel at 0106 GMT, up 24 cents from their last settlement, but still not far off this week's 7-year lows below $37 per barrel. Prices are down over 11 percent since the beginning of December.

Treasuries Recap

U.S. 10-Year Treasuries yield stood at 2.22 percent up by 0.012. 

Australian government bond futures dropped sharply, with the 3-year bond contract off 12 ticks to 97.780. The 10-year contract dropped 6 ticks to 97.0900, while the 20-year contract was a touch softer a 96.6200.

New Zealand government bonds increased, sending yields between 1 and 2 basis points lower along the curve.

Canadian government bond prices were higher across the maturity curve, with the benchmark 10-year gaining 15 Canadian cents to yield 1.488 percent while the 2-year gained 4.5 Canadian cents to yield 0.543 percent.