Asia Roundup: Euro ticks higher after dollar onslaught- August 28, 2015

Market Roundup

• Overseas bankers, officials urge Fed not to waiver on interest rate rise.
• CNY up sharply on central bank intervention, derivatives stabilize.
• China Vice Fin Min - Local pension funds to start investing $313 bln.
• Japan Fin Min Aso - Not considering fresh fiscal stimulus.
• Econ Min Amari - Up to BoJ to decide monetary policy.
• Japan July core CPI unchanged y/y, -0.2% eyed, core-core +0.6%, Tokyo August core -0.1% y/y, -0.2% eyed, uptrend in prices intact sans oil price falls.
• Japan July household spending +0.6% m/m, -0.2% y/y, +2.2% and +1.3% eyed.
• Japan July retail sales +1.6% y/y, +1.1% eyed.
• Japan July unemployment down to 3.3%, 3.4% eyed, jobs-applicants ratio 1.21, highest since February '92, June 1.19, 1.19 eyed.
• Japan fund managers trim stock holdings, up bonds in August.
• Moody's revises down G20 '16 growth forecast to 2.8% from 3.1%.
• US President Obama - US has best economic card amid volatile few weeks.
• IFR - Custody holdings of treasuries add $5.6 bln, no China effect here.
• Foreign CB US debt holdings -$4.425 bln to $3.348 trln Aug 26 week, Treasury holdings +$5.564 bln to $3.018 trln, agencies -$10.07 bln to $285.209 bln.
• NY Fed - FX swaps with foreign CBs $134 mln August 26 week, BoJ $2 mln, rest ECB.
• US-based stock funds post $17.8 bln outflows in latest week.
• UK August GFK consumer confidence index +7, back to 15-yr high, +4 eyed, July +4.
• China July industrial profits -2.9% y/y, January-July -1%.

Economic Data Ahead

• (0300 ET/0700 GMT) Spain August HICP - flash, -0.2% y/y eyed; last unchanged.
• (0300 ET/0700 GMT) Spain July retail sales, +0.9% y/y eyed; last +2.3%.
• (0300 ET/0700 GMT) Spain July retail sales, +0.4% m/m, +5.4% y/y eyed; last +0.3%, +3.8%.
• (0400 ET/0800 GMT) Italy August consumer confidence index, 107.5 eyed; last 106.5.
• (0400 ET/0800 GMT) Italy August business confidence index, 103.7 eyed; last 103.6.
• (0400 ET/0800 GMT) Norway July retail sales ex-autos, -0.4% eyed; last +1.0%.
• (0400 ET/0800 GMT) Norway August unemployment, 3.1% nsa eyed; last 3.1% nsa, 94.95k sa.
• (0430 ET/0830 GMT) UK Q2 GDP - 2nd release, +0.7% q/q, +2.6% y/y eyed; prelim +0.7%, +2.6%.
• (0500 ET/0900 GMT) Euro zone August business climate index, 0.34 eyed; last 0.39.
• (0500 ET/0900 GMT) Euro zone August economic sentiment index, 103.8 eyed; last 104.0.
• (0500 ET/0900 GMT) Euro zone August industrial sentiment index, -3.1 eyed; last -2.9.
• (0500 ET/0900 GMT) Euro zone August services sentiment index, 8.7 eyed; last 8.9.
• (0500 ET/0900 GMT) Euro zone August consumer confidence index - final, -6.9 eyed; flash -7.1.
• (0500 ET/0900 GMT) Italy July wage inflation; last +0.1% m/m, +1.1% y/y.
• (0530 ET/0930 GMT) Belgium August CPI; last unchanged m/m, +0.46% y/y.
• (0800 ET/1200 GMT) Germany Aug HICP - prelim, -0.1% m/m, +0.1% y/y eyed; last +0.3%, +0.1%.
• (0830 ET/1230 GMT) US July personal income, +0.4% m/m eyed; last +0.4%.
• (0830 ET/1230 GMT) US July personal consumption, +0.4% m/m sa eyed; last +0.2% sa, unchanged nsa.
• (0830 ET/1230 GMT) US July PCE price index; last +0.2% m/m, +0.3% y/y.
• (0830 ET/1230 GMT) US July core, +0.1% m/m eyed; last +0.1% m/m, +1.3% y/y.
• (0830 ET/1230 GMT) US July goods trade balance advance; last US$62.26 bln deficit.
• (1000 ET/1400 GMT) US August UOM sentiment index final, 93.0 eyed; prelim 92.9.
• (1300 ET/1700 GMT) US July Dallas Fed PCE; last +2.1% AR.

Key Events Ahead

• N/A BoE Rule at Edinburgh conference.
• N/A UK DMO GBP2/0.5/2 bln 1/3/6-month treasury bill auctions.
• (0500 ET/0900 GMT) Italy E1.5-2/1-1.5/3.5-4 bln 0.7/0.304/2.0% 2020/22/25 BTP/BTPei sales.
• N/A Kansas City Fed annual Jackson Hole symposium beings (till August 29).

FX Recap

EURUSD: Pair is currently supported below 1.1300 levels and trading at 1.1260 levels. It made intraday high at 1.1268 and low at 1.1232 levels. The US economy expanded at an annualized 3.7% in the second quarter, much better than the previous estimates of just 2.3% growth and also beating estimates of a 3.1% rise. Moreover, an unexpected drop in US inventories also boosted crude oil prices. The Energy Information Administration reported a drop of 5.45 million barrels for last week, while analysts had forecast a rise of 2 million barrels. Later in a day market will focus on Spain GDP as well as US Trade balance data. Initial support is seen around 1.1210 levels and resistance at 1.1425 levels.

USDJPY: Pair is supported around 121.00 levels. It made intraday high at 121.31 and low at 120.87 levels. It is currently trading around 121.02 levels. The Bank of Japan's preferred inflation gauge didn't increase for the first time in more than two years last month, putting greater pressure on the central bank to stem a decline in price pressures by expanding its monetary easing program. The National core CPI was flat in July after rising 0.2% year-on-year in June, according to the Statistics Bureau, while the more timely Tokyo CPI measure fell 0.1% year-on-year in August, the same pace as July. Initial support is seen at 118.23 and resistance at 122.01 levels.

GBPUSD: Pair is supported below 1.5500 levels. It made intraday high at 1.5442 and low at 1.5403 levels. It is currently trading at 1.5435 levels. Pair is almost flat before the 2ns estimate GDP data. It's the broadest measure of economic activity and the primary gauge of the economy's health. Initial support is seen at 1.5321 and resistance at 1.5592 levels.

NZDUSD: Pair is supported above 0.6400 levels and trading at 0.6466 levels. It made intraday high at 0.6505 and low at 0.6466 levels. The New Zealand dollar continued to gain on the US dollar on Friday after closing 0.3% higher on Thursday, with commodity-linked currencies outperforming as commodity prices rebounded overnight. Brent crude in particular, surged more than 9% overnight to above $47 per barrel, up from $43 per barrel on Wednesday. WTI futures rose from $39 per barrel to almost $43. Revised US GDP data on Thursday also provided the markets with something to get excited about, with second-quarter growth revised up from 2.3% to 3.7% quarter-on-quarter. Initial support is seen at 1.3187 and resistance at 1.3322 levels.

AUDUSD: Pair is supported above 0.7100 levels and trading around 0.7171 levels. It made intraday high at 0.7205 and low at 0.7160 levels. The Australian dollar, which is also closely-linked with commodities, rose 0.31% to $0.7187 at the same time, from $0.7164. Oil prices rose on Friday, adding to hefty gains posted the session before, with both benchmarks heading for a weekly gain after eight straight weeks of declines. Initial support is seen at 0.7040 and resistance is seen around 0.7236 levels.

Equities Recap

Japan's benchmark Nikkei 225 index rallied 2.37% to 19,014.31 points within the first hour of trade on Friday, with almost all 225 stocks on the index trading with gains, while Tokyo's broader Topix gauge bolted 2.69% higher to 1,540.70 points.

Hong Kong's benchmark Hang Seng index advanced 1.66% to 22,201.88 points at the opening bell, and mainland China's benchmark Shanghai Composite grew 1.03% to 3,115.33 points at the same time.

Korea's benchmark Kospi index jumped 1.29% to 1,932.64 points this morning in Seoul.

The benchmark Australian S&P/ASX 200 index traded 0.75% higher at 5,272.50 points in Sydney, with Australian oil and gas miners up sharply following the 9% gain in Brent crude futures overnight.

New Zealand's benchmark S&P/NZX 50 index was up 0.71% at 5,675.04 points this afternoon in Wellington.

Australia's S&P/ASX 200 index closes up 0.39 pct at 5,253.70 points.

Tokyo's Nikkei average unofficially closes up 3.03 pct at 19,136.32.

Treasury Recap

US 10-year treasuries yield at 2.181 percent vs US close of 2.166 percent on Thursday.

New Zealand government bonds eased, pushing yield 2 basis point higher along the yield curve.

Australian government bond futures dipped, with the three-year bond contract off 4 ticks at 98.170. The 10-year contract was down 3 ticks to 97.2350.

Commodity Recap

Oil prices rose on Friday, adding to hefty gains posted the session before, with both benchmarks heading for a weekly gain after eight straight weeks of declines. Futures for WTI were trading 1.06% higher at $43.01 per barrel, while Brent futures gained 0.57% to $47.83 per barrel. Both benchmarks closed Thursday's session with an over 10% gain, their biggest one-day rally in more than six years.

Gold was stuck near recent lows on Friday and was on track to post its biggest weekly drop in five as strong U.S. economic data backed the case for a near-term increase in interest rates. Spot gold was up 0.4 percent at $1,129.60 an ounce by 0226 GMT, but down almost 3 percent for the week.