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Asia Roundup: Kiwi halts 5-day losing streak ahead of RBNZ policy meeting, dollar eases against yen amid persisting U.S.-China trade deal concerns, Asian shares plunge - Monday, November 11th, 2019

Market Roundup

  • Gold rallies as economic slowdown linger
     
  • Oil declines on concern over U.S.-China trade talks progress

Economic Data Ahead

  • (0430 ET/0930 GMT) UK trade balance
     
  • (0430 ET/0930 GMT) UK industrial production
     
  • (0430 ET/0930 GMT) UK gross domestic product
     
  • (0430 ET/0930 GMT) UK goods trade balance
     
  • (0430 ET/0930 GMT) UK manufacturing production
     

Key Events Ahead

  • No Significant Event Scheduled

FX Beat

DXY: The dollar index edged lower from a  3-week peak amid fading optimism that the United States and China would roll back tariffs that have hurt global growth. The greenback against a basket of currencies traded 0.1 percent down at 98.13, having touched a high of 98.40 on Friday, its highest since October 16.

EUR/USD: The euro steadied, halting a 5-day losing streak, after the European Commission last week cut its growth forecast for the eurozone to 1.1 percent this year from 1.2 percent it expected in July, and to 1.2 percent in 2020 and 2021 from 1.4 percent. The European currency traded flat at 1.1024, having touched a low of 1.1016 on Friday, its lowest since October 15. Investors’ attention will remain on a series of data from the Eurozone economies, ahead of the Fed Rosengren's speech. Immediate resistance is located at 1.1067 (5-DMA), a break above targets 1.1123. On the downside, support is seen at 1.1012, a break below could drag it below 1.0985.

USD/JPY: The dollar eased, extending previous session losses, as uncertainty persisted over whether the United States and China could end their damaging trade war. The major was trading 0.3 percent down at 108.93, having hit a high of 109.48 on Thursday, its highest since May 31. Investors’ will continue to track the broad-based market sentiment, ahead of the Fed Rosengren's speech. Immediate resistance is located at 109.62 (May 31 High), a break above targets 109.92 (May 30 High). On the downside, support is seen at 108.74 (10-DMA), a break below could take it near at 108.49.

GBP/USD: Sterling nudged higher after falling to a 3-week in the previous session on data that showed Britain’s economy lost momentum this year, hurt by a global downturn due to the U.S.-China trade war as well as increased uncertainty over its exit from the European Union. The major traded 0.2 percent up at 1.2796, having hit a low of 1.2768 on Friday, it’s lowest since October 17. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2840 (5-DMA), a break above could take it near 1.2897 (November 6 High). On the downside, support is seen at 1.2748, a break below targets 1.2700. Against the euro, the pound was trading flat at 86.15 pence, having hit a low of 86.57 on Thursday, it’s lowest since October 25.

AUSD/USD: The Australian dollar declined amid worries about progress in Chinese-U.S. trade talks after U.S. President Donald Trump contradicted reports about a rollback in tariffs sought by China. The Aussie trades 0.1 percent down at 0.6850, having hit a low of 0.6847 on Friday, it’s lowest since October 29. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6835, a break below targets 0.6809. On the upside, resistance is located at 0.6882, a break above could take it near 0.6907.

NZD/USD: The New Zealand dollar rebounded after falling for five straight sessions, ahead of a rate-setting meeting of the New Zealand central bank later in the week. The Kiwi trades 0.3 percent up at 0.6349, having touched a low of 0.6322 on Friday, its lowest level since October 17. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6396, a break above could take it near 0.6431. On the downside, support is seen at 0.6313, a break below could drag it below 0.6289.

Equities Recap

Asian shares plunged from 6-month highs following a fresh escalation of violence in Hong Kong while uncertainty remained over whether the United States and China could end their trade war.

MSCI's broadest index of Asia-Pacific shares outside Japan eased 1.0 percent.

Tokyo's Nikkei fell 0.3 percent to 23,331.84 points, Australia's S&P/ASX 200 index rose 0.7 percent to 6,772.50 points and South Korea's KOSPI eased 0.6 percent to 2,124.09 points.

Shanghai composite index eased 1.8 percent to 2,909.86 points, while CSI 300 index traded 1.8 percent down at 3,903.17 points.

Hong Kong’s Hang Seng traded 2.8 percent lower at 26,877.71 points. Taiwan shares shed 1.3 percent to 11,427.28 points.

Commodities Recap

Crude oil prices declined amid renewed doubts over the prospects of a trade deal between the United States and China, while concerns over excess supplies also weighed on market sentiment.  International benchmark Brent crude was trading 0.9 percent down at $61.98 per barrel by 0530 GMT, having hit a low of $60.65 on Friday, its lowest since November 1. U.S. West Texas Intermediate was trading 1.08 percent down at $56.72 a barrel, after falling as low as $55.74 on Friday, its lowest since November 1.

Gold prices steadied after recording a 3-month low in the previous session, as concerns linger over the trade war between the United States and China and the prospect of a slowing global economy. Spot gold was trading 0.2 percent up at $1,462.70 per ounce by 0533 GMT, having touched a low of $1,456.08 on Friday, its lowest August 5. U.S. gold futures were flat at $1,462.60 per ounce.

Treasuries Recap

The Australian government bonds gained during Asian session of the first trading day of the week Monday ahead of the country’s employment report for the month of October, scheduled to be released later this week amid ongoing U.S.-China trade uncertainties after President Donald Trump casted doubts over potential rollback of existing tariffs as part of the Phase 1 trade deal. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slipped 1/2 basis point to 1.291 percent, the yield on the long-term 30-year bond hovered around 1.893 percent and the yield on short-term 2-year suffered 2 basis points to 0.874 percent.

By Lactus Fernandes
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