Asia Roundup:  Yen remains well supported above 111.00 mark, gold flat at $1,265 mark- Friday, April 28, 2017

Market Roundup

• Trump says major major conflict with NoKorea possible, would prefer diplomacy but very difficult, China doing all to help, spurns Taiwan pres suggestion of another phone call – Reuters exclusive.
   
• Trump vows to fix or scrap SoKorea trade deal, wants missile system payment.


• US House GOP backs down from last-minute push to vote on health-care bill, smoothes way for government to stay open past Friday – Washington Post.
   
• Japan March industrial output -2.1% m/m, -0.8% eyed, April output eyed at +8.9%, prev est +8.3%, May -3.7%, Feb rev +3.2%.


• Japan DepPM/FinMin Aso – Won’t make concessions in two-way trade talks with US – Nikkei.
   
• Japan March household spending -2.0% m/m, -1.3% y/y, -0.8% and -0.3% eyed.


• Japan March retail sales +2.1% y/y, +1.5% eyed, February +0.2%.
   
• Japan March unemployment 2.8%, jobs-applicants ratio 1.45, 2.9% and 1.43 eyed, Feb 2.8%, 1.43, jobs-applicants ratio highest since November ’90.


• Japan March core CPI +0.2% y/y, Tokyo April core -0.1%, +0.3%, -0.2% eyed.
   
• Japan Lawson, FamilyMart to snip household-goods prices - Nikkei.
   
• Japan seeks to establish bilateral ccy swap frameworks with ASEAN – Nikkei.
   
• Reuters poll – Japan fund managers up equity and bond exposure in April.
   
• Foreign CB US debt holdings +$4.527 bln to $3.210 trln Apr 26 week, Treasury holdings +$10.492 bln to $2.894 trln, agencies -$4.844 bln to $254.987 bln.
   
• NY Fed – Swap with foreign CBs $80 mln April 26 week, all with ECB.
   
• Lipper – US-based stock funds attract $7.2 bln inflows in latest week.
   
• EU prepares for post-Brexit membership for united Ireland - Financial Times.
   
• Australia Mar priv-sector credit +0.3% m/m, +5.0% y/y, housing +0.5%, +6.5%.
   
• Australia Q1 final demand PPI +0.5% q/q, +1.3% y/y.
   
• NZ April ANZ biz confidence 11.0%, own outlook 37.7%, March 11.3%, 38.8%.
   
• NZ March bldg consents -1.8% m/m, +20.0% y/y, Feb +17.2% m/m.

Economic Data Ahead

• (0400 ET/0800 GMT) Spain Feb current account balance; last E410 mln surplus.
   
• (0400 ET/0800 GMT) EZ March money supply M3, +4.7% AR eyed; last +4.7%.


• (0400 ET/0800 GMT) EZ March loans to non-financials, households; last +2.1%, +2.3%.
   
• (0430 ET/0830 GMT) UK Q1  GDP – prelim, +0.4% q/q, +2.2% y/y eyed; last +0.7%, +1.9%.
   
• (0430 ET/0830 GMT) UK March BBA mortgage approvals; last 42.61k.
   
• (0500ET/0900 GMT) EZ April inflation – flash, +1.8% y/y eyed; last +1.5%.
   
• (0500 ET/0900 GMT) EZ April – ex-food/energy,  +1.0% y/y eyed; last +0.7%.
   
• (0600 ET/1000 GMT) Italy March producer prices; last +0.3% m/m, +3.3% y/y.
   
• (0830 ET/1230 GMT) US Q1 employment cost index, +0.6% q/q eyed; last +0.5%.
   
• (0830 ET/1230 GMT) US Q1 wages, benefits; last +0.5% q/q, +0.5%.


• (0830 ET/1230 GMT) US Q1 GDP – advance,   +1.2% AR  eyed; last +2.1%.


• (0830 ET/1230 GMT) US Q1  GDP deflator,    +2.0% y/y eyed; last +2.1%.
   
• (0830 ET/1230 GMT) US Q1  PCE price index, +2.3% y/y eyed; last +2.0%.
   
• (0830 ET/1230 GMT) US Q1  - core PCE,      +2.0% y/y eyed; last +1.3%.
   
• (0900 ET/1300 GMT) Belgium Q1  GDP, +0.4% q/q eyed; last +0.5%.
   
• (0945 ET/1345 GMT) US April Chicago PMI, 56.4 eyed; last 57.7.
   
• (1000 ET/1400 GMT) US April U.Mich sentiment index – final, 98.0 eyed; prelim 98.0.

Key Events Ahead

• (0400 ET/0800 GMT) SNB shareholder general meeting, Chair Jordan, Studer to speak.
   
• (0400 ET/0800 GMT) Norges Bank May currency operations, April net NOK850 mln sales/day.
   
• (0600 ET/1000 GMT) UK DMO GBP0.5/0.5/1.5 bln 1/3/6-month treasury bill auctions.
   
• (1315 ET/1715 GMT) Fed Gov Brainard speaks at Northwestern University.
   
• (1430 ET/1830 GMT) Philly Fed Harker speaks in Washington, DC.

FX Recap

USD: The dollar index, which tracks the greenback against a basket of six major rivals, edged up 0.1 percent to 99.193, but down 0.8 percent for the week and 1.2 percent for April.

EUR/USD: The euro was down 0.1 percent at $1.0865, but up 1.3 percent for the week and 2 percent for the month. ECB Chief Mario Draghi said on Thursday after the central bank's policy meeting that removal of the bank's easing bias was not discussed; stressing the barriers the ECB still faces before beginning to tighten its ultra-loose financing conditions. Against its Japanese counterpart, the dollar was steady on the day at 111.30 yen, up 2 percent for the week but still down 0.1 percent for the month.

USD/JPY: The yen showed little reaction to the Bank of Japan's decision on Thursday to keep monetary policy steady as the outcome was well anticipated. USD/JPY was currently trading around 111.28 marks. Pair made intraday high at 111.35 and low at 111.07 levels.  A sustained close above 111.24 is required to take the parity higher towards 111.45, 112.19, 113.72, 115.37 and 117.42 marks. Alternatively, a daily close below 111.25 will drag the parity down towards 108.13 levels.

GBP/USD:  The sterling rose 0.8 percent against the euro on Thursday to trade at its strongest since before Sunday's first round of France's presidential election, when a victory for the market-friendly Emmanuel Macron drove a surge in the single currency. Its gains were largely due to broad weakness in the euro, which fell across the board after European Central Bank President Mario Draghi said policymakers did not discuss removing the bank's monetary policy easing bias at this month's meeting.

AUD/USD:  The Australian dollar rose modestly in Asian hours after the White House said Trump had agreed not to terminate the NAFTA agreement for now.

NZD/USD: The New Zealand dollar rose 0.3 percent to $0.6909, up from a four-month low of $0.6873 on Wednesday.

Equities Recap

Japan’s Nikkei was trading around 0.31 percent lower at 19,193 points.  

Hong Kong’s Hang seng was trading 0.26 percent lower at 24,634 points.

Australia’s S&P ASX200 was trading 0.05 percent higher at 5,924 points.

South Korea’s kospi was trading 0.21 percent lower at 2,204 points.

Shanghai composite index to open down 0.3 pct at 3,144.02 points and China's CSI300 index to open down 0.2 pct at 3,439.57 points.

Taiwan’s market was trading 0.12 percent higher at 9,872.93 points.

India’s NSE Nifty was trading around 0.60 percent lower at 9,286.28 points and BSE Sensex was trading at 0.58 percent lower at 29,875.87 points.

Commodities Recap

Oil prices rose on Friday but were still on track for a second straight weekly loss on concerns that an OPEC-led production cut has failed to significantly tighten an oversupplied market. U.S. West Texas Intermediate (WTI) crude futures were trading at $49.40 per barrel at 0344 GMT, up 43 cents, or 0.88 percent, from their last close. However, WTI is still set for a small weekly loss and is around 8 percent below its April peak. Brent crude futures were at $51.86 per barrel, up 42 cents, or 0.82 percent. Brent is almost around 8.5 percent down from its April peak and is also on track for a second, albeit small, week of declines.

Gold was little changed on Friday and poised for the biggest weekly fall in seven weeks as investors sought out higher returns than those from holding the non-interest bearing yellow metal by buying into riskier assets. Spot gold was up 0.1 percent at $1,264.81 per ounce, as of 0312 GMT, while U.S. gold futures were steady at $1,266.30. Gold is on track for a weekly drop of 1.5 percent, the largest weekly percentage fall since the week of March 10, but is heading towards a gain of about 1.3 percent for the month.

Treasuries Recap

Yields on New Zealand government bonds fell 2 basis points at the short-end of the curve and about 4 basis points at the long end.

Australian government bond futures climbed, with the three-year bond contract up 2 ticks at 98.140. The 10-year contract added 2.5 ticks to 97.365.