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Asia Roundup: Kiwi steadies following NZ Treasury's growth forecast, dollar gains as U.S. Treasury yields surge, Asian shares rally - Thursday, December 13th, 2018

Market Roundup

  • British PM May survives party confidence vote but Brexit deal still teetering
     
  • Brexit worries push UK house price gauge to six-year low - RICS
     
  • Trump ex-lawyer Cohen given 3 years in prison as risks rise for Trump
     
  • U.S. Rep. Meadows out of running for White House chief of staff -officials
     
  • ECB worries multiply even as money-printing presses stop
     
  • Trump intervention comment may be gift to Huawei CFO
     
  • Chinese state media urges Canada to defy U.S., free Huawei exec
     
  • Canada warns U.S. not to politicize extradition cases
     
  • New Zealand's Treasury flags smaller 2019 budget surplus, trims growth forecasts
     

Economic Data Ahead

  • (0200 ET/0700 GMT) Germany Nov CPI Final YY, 2.3% f'cast, 2.3% prev
     
  • (0200 ET/0700 GMT) Germany Nov HICP Final YY, 2.2% f'cast, 2.2% prev
     
  • (0745 ET/1245 GMT) EZ Dec ECB Refinancing Rate, 0.00% f'cast, 0.00% prev
     
  • (0745 ET/1245 GMT) EZ Dec ECB Deposit Rate, -0.40% f'cast, -0.40% prev
     

Key Events Ahead

  • (0745 ET/1245 GMT) ECB Governing Council meeting, followed by interest rate announcement, Frankfurt
     
  • (0830 ET/1330 GMT) ECB President Mario Draghi and Vice President Luis de Guindos to hold news conference, Frankfurt

FX Beat

DXY: The dollar index rallied as the U.S. Treasury yields rebounded from recent lows. The greenback against a basket of currencies trades 0.1 percent up at 97.10, having touched a low of 96.36 on Monday, its lowest since Nov 22. FxWirePro's Hourly Dollar Strength Index stood at 44.17 (Neutral) by 0400 GMT.

EUR/USD: The euro consolidated within narrow ranges, as investors turned cautious ahead of a closely-watched policy meeting by the European Central Bank later in the day. The ECB is all but certain to formally end its bond purchase scheme, however, it will take a cautious view on growth. The European currency traded flat at 1.1367, having touched a high of 1.1442 on Monday, its highest since Nov. 20. FxWirePro's Hourly Euro Strength Index stood at 8.37 (Neutral) by 0400 GMT. Investors’ attention will remain on ECB interest rate decision, ahead of the U.S. unemployment benefits claims; and import and export price index. Immediate resistance is located at 1.1401 (November 29 High), a break above targets 1.1455 (November 2 High). On the downside, support is seen at 1.1305 (November 30 Low), a break below could drag it till 1.1267 (November 28 Low).

USD/JPY: The dollar surged, reversing most of its previous session losses, as the U.S. Treasury yields continued to gain after steep declines as risk sentiment improved. The major was trading 0.2 percent up at 113.46, having hit a high of 113.52 on Wednesday, its highest since December 4. FxWirePro's Hourly Yen Strength Index stood at -60.30 (Bearish) by 0400 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefits claims; and import and export price index. Immediate resistance is located at 113.66 (December 4 High), a break above targets 114.03 (November 28 High). On the downside, support is seen at 112.66 (October 23 Low), a break below could take it lower 112.08 (October 24 Low).

GBP/USD: Sterling eased after rebounding from a 20-month trough in the previous session, as British Prime Minister Theresa May pulled through a no-confidence vote on her leadership. The major traded 0.1 percent down at 1.2619, having hit a low of 1.2480 on Tuesday; it’s lowest since mid-April 2017. FxWirePro's Hourly Sterling Strength Index stood at -43.93 (Neutral) 0400 GMT. Investors’ attention will remain on the U.S. fundamental drivers, amid a lack of economic data from the UK docket. Immediate resistance is located at 1.2700, a break above could take it near 1.2754. On the downside, support is seen at 1.2560, a break below targets 1.2515. Against the euro, the pound was trading 0.1 percent down at 90.08 pence, having hit a low of 90.87 on Monday, it’s lowest since August 29.

AUD/USD: The Australian dollar rose, extending gains for the third straight session, amid signs of progress in U.S.-China trade relations. The Aussie trades 0.2 percent up at 0.7228, having hit a low of 0.7178 on Monday; it’s lowest since November 13. FxWirePro's Hourly Aussie Strength Index stood at 100.29 (Highly Bearish) by 0400 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7164 (November 13 Low), a break below targets 0.7141 (September 17 Low). On the upside, resistance is located at 0.7268 (November 22 High), a break above could take it near 0.7325 (November 19 High).

NZD/USD: The New Zealand dollar edged higher after falling to a 2-week low in the prior session after the New Zealand Treasury trimmed the growth forecast for 2019 and flagged a smaller surplus as it cautioned of risks to the economy from global trade wars and slowing immigration. The Kiwi trades 0.1 percent up at 0.6864, having touched a low of 0.6824 on Wednesday, its lowest level Nov 28. FxWirePro's Hourly Kiwi Strength Index was at -5.19 (Neutral) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6939 (December 3 High), a break above could take it near 0.6976 (June 15 High). On the downside, support is seen at 0.6816 (November 9 Low), a break below could drag it below 0.6753 (November 27 Low).

Equities Recap

Asian shares rallied as China appeared to be taking more steps to meet U.S. demands to open its markets.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.1 percent.

Tokyo's Nikkei surged 0.9 percent to 21,815.31 points, Australia's S&P/ASX 200 index rallied 0.1 percent to 5,661.60 points and South Korea's KOSPI gained 0.9 percent to 2,100.39 points.

Shanghai composite index rose 1.3 percent to 2,636.57 points, while CSI300 index traded 1.6 percent up at 3,221.95 points.

Hong Kong’s Hang Seng traded 1.0 percent higher at 26,448.18 points. Taiwan shares added 0.4 percent to 9,858.76 points.

Commodities Recap

Crude oil prices surged, supported by a decline in U.S. crude inventories and signs that China is taking more concrete steps to put a trade war truce with Washington into action. International benchmark Brent crude was trading 0.4 percent up at $60.42 per barrel by 0422 GMT, having hit a high of $63.67 on Friday, its highest since November 22. U.S. West Texas Intermediate was trading 0.3 percent up at $51.30 a barrel, after rising as high as $54.20 on Friday, its highest since the December 5.

Gold prices declined, as the dollar steadied amid optimism for progress in Chinese-U.S. trade talks. Spot gold was 0.1 percent down at $1,244.22 per ounce, as of 0425 GMT, having touched a high of $1,250.46 on Monday, its highest level since July 11. U.S. gold futures were little changed at $1,249.5 per ounce.

Treasuries Recap

The Australian government bond futures eased a tad, with the three-year bond contract off 2 ticks at 98.015. The 10-year contract slipped 1-3/4 ticks to 97.5300.

The New Zealand government bonds were barely changed.

The Canadian government bond prices were lower across a steeper yield curve in sympathy with U.S. Treasuries. The 10-year declined 29 Canadian cents to yield 2.115 percent.

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March 20 11:00 UTC Released

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