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Asia Roundup: Kiwi halts 2-day losing streak ahead of RBNZ policy meeting, greenback rallies after Mueller finds no Trump-Russia conspiracy, Asian shares plunge on impending U.S. recession fears - Monday, March 25th, 2019

Market Roundup

  • Brexit up in the air as May pushes divorce deal for third time
     
  • Markets seem to underestimate threat of Brexit - ECB's Rehn
     
  • Fed's Evans says have to be nervous about yield curve, but U.S. economy solid
     
  • Fed rate hike, rate cut both 'on the table': Bostic
     
  • Mueller finds no Trump-Russia conspiracy but some questions left unresolved
     
  • China says will reduce gov't direct intervention in industrial sector
     
  • China refuses to concede on U.S. demands to ease curbs on tech firms-FT
     

Economic Data Ahead

  • (0500 ET/0900 GMT) Germany Mar Ifo Business Climate New, 98.5 f'cast, 98.5 prev
     
  • (0500 ET/0900 GMT) Germany Mar Ifo Curr Conditions New, 102.9 f'cast, 103.4 prev
     
  • (0500 ET/0900 GMT) Germany Mar Ifo Expectations New, 94.0 f'cast, 93.8 prev
     

Key Events Ahead

  • N/A ECB's Coeure, Eurogroup chief Mário Centeno, IMF deputy chief David Lipton and Portuguese central bank chief Costa speak in Lisbon, Portugal
     
  • (0530 ET/0930 GMT) ECB board member Sabine Lautenschlager participates in the EU Project Day in German schools in Seelscheid, Germany
     
  • (0530 ET/0930 GMT) ECB board member Benoit Coeure participates in a panel discussion in Lisbon, Portugal
     
  • (0530 ET/1030 GMT) Federal Reserve Bank of Philadelphia President Patrick Harker speaks on economic outlook in London
     
  • (1950 ET/2350 GMT) BoJ to release summary of opinions from board members at its March 14-15 policy meeting in Tokyo
     

FX Beat

DXY: The dollar index surged after an official report concluded that U.S. President Donald Trump did not collude with Russia during the presidential elections in 2016. The greenback against a basket of currencies traded 0.1 percent up at 96.62, having touched a peak of 96.81 on Friday, its highest since Mar. 14. FxWirePro's Hourly Dollar Strength Index stood at 54.71 (Bullish) by 0500 GMT.

EUR/USD: The euro declined for the third straight session, as Friday’s weaker-than-expected German manufacturing survey stoked concerns for Europe's biggest economy and the wider eurozone.  The European currency traded 0.5 percent down at 1.1295, having touched a low of 1.1273 on Friday, its highest since Mar. 12. FxWirePro's Hourly Euro Strength Index stood at -64.67 (Bearish) by 0500 GMT. Investors’ attention will remain on German IFO report, ahead of the Chicago Fed national activity index, Dallas Fed Manufacturing business index and Fed Harker's speech. Immediate resistance is located at 1.1344 (Mar. 14 High), a break above targets 1.1408 (Mar. 1 High). On the downside, support is seen at 1.1273 (Mar. 22 Low), a break below could drag it till 1.1221 (Mar. 11 Low).

USD/JPY: The dollar plunged to a 1-1/2 month trough as concerns about a potential U.S. recession and decelerating global growth sent investors seeking safety in safe-haven assets. However, the pair attempted a minor recovery after U.S. Attorney General William Barr stated that special counsel Robert Mueller found no evidence of collusion between Trump's campaign team and Russia. The major was trading 0.1 percent up at 109.98, having hit a low of 109.70, its lowest since Feb. 8. FxWirePro's Hourly Yen Strength Index stood at 32.19 (Neutral) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the Chicago Fed national activity index, Dallas Fed Manufacturing business index and Fed Harker's speech. Immediate resistance is located at 110.46 (Feb. 11 High), a break above targets 111.07 (Feb. 26 High). On the downside, support is seen at 109.63 (Dec. 31 Low), a break below could take it lower at 109.55 (Feb. 6 Low).

GBP/USD: Sterling declined amid growing political turmoil in Britain over the country's exit from the European Union. The major traded 0.1 percent down at 1.3189, having hit a low of 1.3003 on Thursday; it’s lowest since Mar. 11. FxWirePro's Hourly Sterling Strength Index stood at -25.55 (Neutral) 0500 GMT. Investors’ will remain on the U.S. fundamental drivers, amid a lack of data from the UK docket. Immediate resistance is located at 1.3254 (Mar. 4 High), a break above could take it near 1.3311 (Mar. 19 High). On the downside, support is seen at 1.3146 (Mar. 20 Low), a break below targets 1.3068 (Mar. 7 Low). Against the euro, the pound was trading 0.2 percent down at 85.69 pence, having hit a low of 87.22 on Thursday, it’s lowest since Feb. 22.

AUD/USD: The Australian dollar tumbled to a 5-day low, as investors grew increasingly concerned about the outlook for the global economy. The Aussie trades 0.05 percent up at 0.7082, having hit a high of 0.7168 on Thursday, it’s highest since Feb. 27. FxWirePro's Hourly Aussie Strength Index stood at -40.06 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7041 (Mar. 14 Low), a break below targets 0.7003 (Mar. 8 Low). On the upside, resistance is located at 0.7149 (Mar. 20 High), a break above could take it near 0.7198 (Feb. 27 High).

NZD/USD: The New Zealand dollar surged, halting a 2-day losing streak, as investors’ eye RBNZ's next policy meeting on Wednesday, where it is considered certain to keep rates at 1.75 percent and reiterate the outlook for steady policy. The Kiwi trades 0.2 percent up at 0.6883, having touched a high of 0.6938 on Thursday, its highest level Feb. 1. FxWirePro's Hourly Kiwi Strength Index was at 25.90 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6944 (Dec. 5 High), a break above could take it near 0.6969 (Dec. 4 High). On the downside, support is seen at 0.6808 (Mar. 14 Low), a break below could drag it below 0.6757 (Feb. 22 Low).

Equities Recap

Asian shares tumbled as growing worries about an impending U.S. recession dented investor risk sentiment.

MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.6 percent.

Tokyo's Nikkei fell 3.01 percent to 20,977.11 points, Australia's S&P/ASX 200 index eased 1.1 percent to 6,126.20 points and South Korea's KOSPI plunged 1.9 percent to 2,145.31 points.

Shanghai composite index declined 1.6 percent to 3,053.37 points, while CSI300 index traded 2.1 percent down at 3,754.83 points.

Hong Kong’s Hang Seng traded 1.6 percent lower at 28,655.16 points. Taiwan shares shed 1.5 percent to 10,484.09 points

Commodities Recap

Crude oil prices declined, extending losses for the third straight session, amid concerns that looming recession could outweigh supply disruptions from OPEC's production cuts and from U.S. sanctions on Iran and Venezuela. International benchmark Brent crude was trading 0.4 percent up at $66.67 per barrel by 0525 GMT, having hit a high of $68.67 on Thursday, its highest since Nov. 13. U.S. West Texas Intermediate was trading 0.5 percent lower at $58.59 a barrel, after rising as high as $60.37 on Thursday, its highest since the Nov. 12.

Gold prices surged as concerns about a potential U.S. recession and decelerating global growth weighed on investor risk appetite. Spot gold was 0.2 percent up at $1,315.87 per ounce by 0528 GMT, having touched a high of $1,320.26 on Thursday, its highest since Feb 28. U.S. gold futures were up 0.2 percent at $1,314.40 an ounce.

Treasuries Recap

The yield on Australia’s benchmark 10-year note, which moves inversely to its price, plunged 6-1/2 basis points to 1.781 percent, the yield on the long-term 30-year bond also slumped 6-1/2 basis points to 2.424 percent and the yield on short-term 2-year traded nearly 5 basis points lower at 1.452 percent.

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July 2 15:00 UTC Released

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449.6 Stale

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