Asia Roundup: NZ trade gap unexpectedly expands in September despite solid exports, UK GDP data in focus - October 27, 2015

Market Roundup

• BoJ to debate ease October 30th.
  
  
• Fed strives for a clear signal on interest rates.
  
  
• Japan Nippon Life agrees to buy NAB's life unit for Y200 bln.
  
  
• Japan September corporate service prices -0.1% m/m, +0.6% y/y, August +0.8% y/y.
  
  
• Hedge fund Third Point buys stake in Japan's Seven & I, less than 5%.
  
  
• PBOC lowers guidance rate on 7-day reverse repos 10 bps to 2.25%.
  
  
• France Fin Min Sapin - Hard for ECB to ease policy further.
  
  
• RBA may become reluctant rate cutter as ECB looks to ease.
  
  
• Australia consumer confidence sags as mortgage rates rise, increases in variable loans likely to lead central bank to cut key rates.
  
  
• NZ Sept trade deficit NZ$1.222 bln, NZ$800 mln eyed, balance to Sept NZ$3.2 bln deficit, Sept imports NZ$4.91 bln, exports NZ$3.69 bln.

Economic Data Ahead

• (0300 ET/0700 GMT) Switzerland September UBS consumption indicator; last 1.63.
  
  
• (0400 ET/0800 GMT) Sweden October consumer confidence index, 98.5 eyed; last 98.7.

• (0400 ET/0800 GMT) Sweden October manufacturing confidence index; last 110.1.
  
  
• (0430 ET/0830 GMT) Sweden September trade balance; last SEK3.6 bln deficit.
  
  
• (0430 ET/0830 GMT) Sweden September PPI; last +0.2% m/m, -1.4% y/y.
  
  
• (0430 ET/0830 GMT) Sweden September household lending; last +7.1% y/y.
  
  
• (0500 ET/0900 GMT) EZ September money supply M3, +5.0% y/y eyed; last +4.8%, 3-mo MA +5.0%.
  
  
• (0500 ET/0900 GMT) EZ September private loans, +1.1% eyed; last +1.0%, loans to households +1.0%.
  
  
• (0530 ET/0930 GMT) UK Q3 GDP prelim, +0.6% q/q, +2.4% y/y eyed; last +0.7%, +2.4%.
  
  
• (0830 ET/1230 GMT) US September durable goods orders, -1.2% m/m eyed; last -2.3%.
  
  
• (0830 ET/1230 GMT) US September - ex-transport, unchanged m/m eyed; last -0.2%.
  
  
• (0830 ET/1230 GMT) US September non-def cap goods ex-air, unchanged m/m eyed; last -0.8%.
  
  
• (0900 ET/1300 GMT) US August CaseShiller 20, +0.3% m/m nsa, +5.1% y/y eyed; last +0.6%, +5.0%.
  
  
• (0945 ET/1345 GMT) US October Markit services PMI flash, 55.1 eyed; last 55.1.
  
  
• (0945 ET/1345 GMT) US October Markit composite PMI flash; last 55.0.
  
  
• (1000 ET/1400 GMT) US October consumer confidence index, 103.0 eyed; last 103.0.
  
  
• (1000 ET/1400 GMT) US October Rich Fed mfg shipments, services, comp indices; last -3, +10, -5.
  
  
• (1030 ET/1430 GMT) US Oct Dallas Fed services revenues, outlook indices; last +12.8, +3.6.

Key Events Ahead

• N/A FOMC, Riksbank begin two-day policy meetings.
  
  
• (0500 ET/0900 GMT) Netherlands E1.5-2.5 bln 4% and 2.5% 2019 and 2033 DSL auctions.
  
  
• (0530 ET/0930 GMT) UK DMO GBP3 bln 2% 2025 Gilt auction.
  
  
• (0530 ET/0930 GMT) ECB 7-day refinance at fixed 0.05%, E68 bln allotment eyed, last E65.9 bln.
  
  
• (0600 ET/1000 GMT) Italy E1.5-1.75 bln zero-coupon 2017 CTZ auction.
  
  
• (0715 ET/1115 GMT) ECB/Austria CB Nowotny speech in Zurich.
  
  
• (1120 ET/1520 GMT) BoC DepGov Lane speech in Halifax.
  
  
• (1200 ET/1600 GMT) BoE DepGov Shakik speech in London.

FX Recap

EUR/USD: The euro has been trading up 0.42% at $1.1057, up from daily lows of $1.1045 levels. Disappointing home sales data in the US led to euro gains, while the single currency continues to recover from Draghi's comments. Looking ahead, we have a data-busy New York session today with plenty of risk events from the US due to be reported. The key of the lot is expected to be the US durable goods and consumer confidence data. It made intraday high at 1.1069 and low at 1.1045 levels. Initial support is seen around at 1.0972 and resistance at 1.1560 levels.

USD/JPY: The Japanese yen rose sharply against the US dollar on Tuesday, ahead of what is likely to be a big week for Japan, with retail data due on Wednesday and both inflation data and the BoJ policy announcement on Friday. The USD/JPY pair was down 0.42% at 120.57 on Tuesday morning in Tokyo from 121.08 at the close of trade in New York on Monday, hitting a morning low of 120.48. Pair made intraday high at 121.09 and low at 120.48 levels. Initial resistance is seen at 123.20 and support is seen at 118.42 levels.

GBP/USD: The British pound posted moderate gains against the greenback on Monday, extending its intraday high amid the dollar's current weakness induced by the unexpected drop of new home sales in September. However, the upcoming session will offer a drastically different picture on Tuesday, starting with the first estimate of the UK's GDP. Pair made intraday high at 1.5358 and low at 1.5346 levels. Initial support is seen at 1.5107 and resistance is seen around 1.5725 levels.

NZD/USD: New Zealand's merchandise trade balance recorded a larger deficit in September than August, even as beef exports surged and imports fell due to the strong comparison base from September 2014, with dairy exports continuing to reduce New Zealand's trade income. The trade gap grew from a revised $1.08 billion in August to $1.22 billion last month, according to Statistics New Zealand, coming in weaker than analysts' median estimate of $825 million deficit. Pair made intraday high at 0.6788 and low at 0.6738 levels. Initial support is seen at 0.6235 and resistance at 0.6896 levels.

AUD/USD: The riskier/higher yielding currencies such as the Antipodean were on the losing end as a result of the widespread risk-aversion. Pair dropped -0.20% to trade around 0.7230, reversing yesterday's gains as falling oil and gold prices adds to the persisting bearish pressures on the Aussie. While the news surrounding Nippon-NAB deal failed to boost the AUD bulls. Pair made intraday high at 0.7255 levels and low around 0.7227 levels. Initial support is seen at 0.6908 and resistance at 0.7438 levels.

Equity Recap

Japan's benchmark Nikkei 225 index slipped 0.12% to 18,923.78 points in morning trade, while Tokyo's broader Topix gauge fell 0.14% to 1,556.88 points.

Hong Kong's benchmark Hang Seng index shed 0.49% to trade at 23,003.31 points and mainland China's benchmark Shanghai Composite plummeted 1.22% to 3,387.80 points at the same time.

Korea's benchmark Kospi index fell 0.23% to 2,043.47 points on Tuesday morning in Seoul.

The benchmark Australia's S&P/ASX 200 index marginally up at 5,347.80 points in Sydney.

The benchmark New Zealand S&P/NZX 50 index rose 0.45% to 5,997.66 points this afternoon in Wellington.

Australia's S&P/ASX 200 index closes down 0.08 pct at 5,343.80 points.

Tokyo's Nikkei average closes down 0.90 pct at 18,777.04.

Treasury Recap

Thailand 35 bln baht, 91-day central bank bond average accepted yield 1.45643 pct. Thailand 35 bln baht, 364-day central bank bond average accepted yield 1.48889 pct. Thailand 20 bln baht, 182-day central bank bond average accepted yield 1.48383 pct.

Malaysia will sell 1.5 bln RGT Islamic Govt bond.

10-year US Treasury yield at 2.042 percent vs US close of 2.058 percent on Monday.

New Zealand bonds very attractive by comparison. The two-year bonds yield 2.5 percent, while the 10-year offers 3.4 percent - even though they are historically very low.

Commodity Recap

Gold steadied just above $1,160 an ounce on Tuesday as investors kept to the sidelines ahead of a Federal Reserve policy meeting that kicks off later in the session, waiting for clues on the timing of a U.S. rate hike. Spot gold was steady at $1,163.71 an ounce by 0326 GMT. The metal had fallen to its lowest in nearly two weeks at $1,158.77 on Friday, but has since firmed as the dollar gave up some recent gains.

Crude oil futures declined on Tuesday, extending the losses from the prior session, amid growing worries the global supply glut is likely to persist for some time to come. Futures for WTI dropped 1.21% to trade at $43.45 per barrel, hitting its lowest level since September 2. Brent futures slipped 0.72% to $47.20 per barrel.