Asia Roundup: Japan leads Asian stocks higher, UK GDP data in focus - September 30, 2015

Market Roundup

• UBS consumption indicator for Switzerland 1.63 points in August from 1.59 in previous month.
  
  
• UK September nationwide house price mm increase to +0.5 % (forecast 0.4 %) vs previous 0.3 %.
  
  
• Germany August retail sales mm real decrease to -0.4 % (forecast 0.2 %) vs previous 1.4 %.
  
  
• South Africa August private sector credit extension increase to 8.6 % (forecast 8.40 %) vs previous 8.38 %.
  
  
• South Africa August M3 money supply YY decrease to 10.02 % (forecast 10.23 %) vs previous 10.25 %.
  
  
• Japan PM Abe advisor Honda - Japan needs extra stimulus.
  
  
• Moody's - Japan's weakening saving bias could in time raise risk of funding public debt.
  
  
• Japan August industrial output -0.5% m/m, +1.0% eyed, +0.1% eyed in Sept, previous estimate -1.7%, Oct +4.4% eyed, government cuts assessment of sector.
  
  
• Japan August retail sales +0.8% y/y, +1.1% eyed.
  
  
• UK September GFK consumer confidence +3, +6 eyed, Aug +7, best since June/Jan '00.
  
  
• China SAFE - Q2 c/a surplus $73 bln, capital-financial acct deficit $40.6 bln, trend same in H2, eyes large fluctuations in cross border flows, to improve monitoring/management of reserves, to keep CNY basically stable.
  
  
• Australia August private-sector credit +0.6% m/m, housing credit +0.6%.
  
  
• Australia August building approvals -6.9% m/m, -2% eyed, private-sector houses +4.9%.
  
  
• NZ September ANZ business confidence index -18.9%, own activity +16.7%, Aug -29.1, +12.2%, sentiment up but still generally pessimistic.
  
  
• NZ August new dwelling consents -4.9% m/m, +11.3% y/y, July +20.3% m/m.

Economic Data Ahead

• (0300 ET/0700 GMT) Switzerland September KOF indicator, 100.9 eyed; last 100.7.
  
  
• (0300 ET/0700 GMT) Spain July current account balance; last bln surplus.
  
  
• (0355 ET/0755 GMT) Germany September unemployment, 2.69 mln nsa eyed; last 2.8 mln nsa, 2.79 mln sa.
  
  
• (0355 ET/0755 GMT) Germany September unemployment, 6.4%, -5k sa eyed; last 6.4%, -7k.
  
  
• (0400 ET/0800 GMT) Norway August credit indicator, +5.7% y/y eyed; last +5.7%.
  
  
• (0400 ET/0800 GMT) Italy August unemployment, 11.9% eyed; last 12.0%.
  
  
• (0430 ET/0830 GMT) UK Q2 GDP, +0.7% q/q, +2.6% y/y eyed; prelim +0.7%, +2.6%.
  
  
• (0430 ET/0830 GMT) UK Q2 current account balance, bln deficit eyed; last bln deficit.
  
  
• (0500 ET/0900 GMT) EZ September inflation flash, unchanged y/y eyed; last +0.1%.
  
  
• (0500 ET/0900 GMT) EZ September ex-f/e - flash, +0.9% y/y eyed; last +0.9%.
  
  
• (0500 ET/0900 GMT) EZ August unemployment, 10.9% eyed; last 10.9%.
  
  
• (0500 ET/0900 GMT) Italy September CPI flash, -0.3% m/m, +0.3% y/y eyed; last +0.2%, +0.2%.
  
  
• (0500 ET/0900 GMT) Italy September HICP - flash, +1.7% m/m, +0.3% y/y eyed; last -0.1%, +0.4%.
  
  
• (0600 ET/1000 GMT) Italy August PPI; last -0.2% m/m, -2.3% y/y.
  
  
• (0815 ET/1215 GMT) US September ADP national employment, +194k eyed; last +190k.
  
  
• (0945 ET/1345 GMT) US September Chicago PMI, 53.0 eyed; last 54.4.

Key Events Ahead

• N/A OECD meeting in Tokyo, various speakers (final day).
  
  
• N/A Norges Bank DepGov Nicolaisen speech in Oslo.
  
  
• N/A Sweden SEK2 bln each 5% and 1.5% 2020 and 2023 government bond auctions.
  
  
• (0305 ET/0705 GMT) Buba Dombret speech in Frankfurt.
  
  
• (0400 ET/0800 GMT) Iceland CB policy announcement.
  
  
• (0400 ET/0800 GMT) Norway October daily currency operations, September NOK700 mln net sales.
  
  
• (0530 ET/0930 GMT) ECB 77-day refinance, E15 bln allotment eyed, E17.3 bln maturing.
  
  
• (0700 ET/1100 GMT) BoE Fisher speech in London.
  
  
• (0700 ET/1100 GMT) Finland E1 bln max 0.75% and 2.625% 2031 and 2042 RFGB auctions.
  
  
• (0800 ET/1200 GMT) BoS DepGov Restoy moderates Madrid panel discussion.
  
  
• (0835 ET/1235 GMT) NY Fed Dudley speech at SIFMA Liquidity Forum in New York.
  
  
• (1030 ET/1430 GMT) IMF Lagarde speaks at Council of Americas event in Washington, DC.
  
  
• (1510 ET/1910 GMT) St Louis Fed Bullard speaks at St Louis conference.

FX Recap

EURUSD: The pair edged up after trading at daily lows following upbeat consumer confidence in the US and weak German CPI data. German inflation declined on a monthly basis in September, as consumer prices shrank 0.2% month-on-month. The German retail sales data will kick-start an action-packed EUR calendar, with the markets predicting a 0.4% gain on a monthly basis, following the 1.4% gain in July, and a 3.4% rise y/y after rising 3.3% in July. Subsequently, Germany will report employment data for September, with the unemployment rate expected to remain at 6.4%, after the same rate recorded in August. Pair is supported above 1.1200 levels. It made intraday high at 1.1261 and low at 1.1240. Initial support is seen around at 1.1015 and resistance at 1.1560 levels.

USDJPY: Japanese retail sales grew for the fifth month in a row in August, but the pace of growth halved compared to July, signalling consumer confidence was subdued. Japan's industrial output fell for the second month in a row in August, suggesting the economy remains on a sluggish recovery path. Retail sales rose 0.8% year-on-year in August and Industrial output fell 0.5% month-on-month in August. Pair is supported around 120.00 levels. Pair made intraday high at 120.03 and low at 119.68 levels. Looking ahead, market will focus on US macroeconomic data for the further movement. Initial resistance is seen at 123.20 and support is seen at 118.42 levels.

USD/CHF: The greenback was trading flat against the Swiss franc on Wednesday, extending its two-day decline from the six-week high at ₣0.9845 reached on September 25.  Ahead in a day, Switzerland will release KOF economic indicator for the further direction of the parity. It made intraday high at 0.9727 and low at 0.9706 levels. Initial support is seen at 0.9663 and resistance is seen around 0.9815 levels.

GBPUSD: Market expectations ahead of the final estimate of the UK's second-quarter GDP due on Wednesday show a confirmed 0.7% quarterly growth, up from 0.4% in the previous three months. Pair made intraday high at 1.5173 and low at 1.5145 levels. Initial support is seen at 1.5185 and resistance is seen around 1.5725 levels.

NZDUSD: A consolidation mood on the markets pushed commodity currencies higher and helping them to regain some lost ground, while safe havens fell. The kiwi turned on the dime as equities stabilized, recovering from below $0.63 seen at end of last week to $0.64 once again. The NZD/USD added 0.53% to $0.6379 on Wednesday. The ANZ Business Outlook survey showed that a net 18.9% of businesses were pessimistic in September, up from a net 29.1% which were pessimistic last month. It made intraday high at 0.6378 and low at 0.6332 levels. Market now awaits US macroeconomic data for the further direction. Initial support is seen at 0.6195 and resistance at 0.6511 levels.

AUDUSD: The Australian dollar advanced against its US namesake on Wednesday afternoon in Sydney as traders' risk appetite improved. Pair was up 0.58% at $0.7021 in Sydney on Wednesday afternoon, from $0.6981 where the pair closed in New York on Tuesday. Australian building approvals fell back in August after a solid rise in July, although the drop in consents last month was mostly down to the often volatile non-house dwelling sector and July consents were revised upwards. Total building approvals were down 6.9% month-on-month in August. Initial support is seen at 0.6908 and resistance at 0.7245 levels.

Equity Recap

Japan's benchmark Nikkei 225 index rallied 2.03% to 17,273.89 points within the first hour of trade, while Tokyo's broader Topix gauge jolted 2.13% higher to 1,404.81 points.

Hong Kong's benchmark Hang Seng index advanced 1.29% to 20,822.58 points at the opening bell, and mainland China's benchmark Shanghai Composite grew 0.64% to 3,057.58 points at the same time.

Korea's benchmark Kospi index tumbled 0.97% to 1,923.94 points on Wednesday morning in Seoul.

The benchmark Australian S&P/ASX 200 index jumped 1.42% to 4,988.10 points in Sydney, with banks and resource stocks rebounding from Tuesday's heavy losses.

New Zealand's benchmark S&P/NZX 50 index slipped 0.2% to 5,601.33 points this afternoon in Wellington.

Australia's S&P/ASX 200 index closes up 1.85 pct at 5,009.50 points.

Tokyo's Nikkei average closes up 2.70 pct at 17,388.15.

Treasury Recap

BOJ offers to lend trln of JGBs on spot basis through 10/1 as a secondary source of JGBs.

New Zealand government bonds had a softer tone with yields 2 basis points higher along the curve.

Australian government bond futures retreated from multi-week highs, with the three-year bond contract off 2 ticks at 98.210. The 10-year contract was down 2.5 ticks to 97.3650.

Commodity Recap

Gold extended losses to a fourth day and was headed for its worst quarter in a year on a looming U.S. rate hike. Spot gold fell 0.2 percent to $1,124.90. With a drop of 4 percent, the yellow metal was headed for its worst quarter in a year, hurt by expectations that the Federal Reserve would raise U.S. rates this year for the first time in nearly a decade and reduce demand for non-interest-paying bullion.

Oil was trading in negative territory on Wednesday, with the sentiment derailed thanks to a weekly rise in US crude reserves that surpassed analysts' expectations. Futures for WTI dropped 0.69% to trade at $44.92 per barrel, while Brent futures were traded 0.44% lower at $48.02 per barrel, trimming the gains booked a session ago.