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Asia roundup: Aussie gains despite deteriorating business conditions, Dollar near 3-week peak against Yen following trump-kim historic summit, Asian shares volatile – Tuesday, June 12th, 2018

Asia roundup: Aussie gains despite deteriorating business conditions, Dollar near 3-week peak against Yen following trump-kim historic summit, Asian shares volatile – Tuesday, June 12th, 2018

 

Market Roundup

  • Trump, Kim pile on charm at summit, but no word on progress
  • Trump economic adviser Kudlow in ‘good’ condition after heart attack
  • In Brexit showdown, British PM May faces issue of “meaningful vote”
  • Japan May Corp Goods Price YY, 2.7%, f’cast 2.2%, last 2.0%
  • Japan May Corp Goods Price MM, 0.6%, f’cast 0.2%, last 0.1%
  • Japan Q2 Business Survey Index, 3.2%, last 2.9%
  • Australia May NAB Business Conditions,15, last 21
  • Australia May NAB Business Confidence, 6, last 10
  • Australia Apr Housing Finance, -1.4%, f’cast -1.9%, last -2.2%, rvsd -2.3%
  • New Zealand May Elec Card Retail Sales YY, 4.2%, last 0.8%, rvsd 1.4%

Economic Data Ahead

  • (0430 ET/0830 GMT) Great Britain May Claimant Count Unemployment SA, last 31.2k
  • (0430 ET/0830 GMT) Great Britain Apr ILO Unemployment Rate, f’cast 4.2%, last 4.2%
  • (0430 ET/0830 GMT) Great Britain Apr Employment Change, f’cast 110k, last 197k
  • (0430 ET/0830 GMT) Great Britain Apr Avg Wk Earnings 3M YY, f’cast 2.6%, last 2.6%
  • (0500 ET/0900 GMT) Germany Jun ZEW Economic Sentiment, f’cast -14.0, last -8.2
  • (0500 ET/0900 GMT) Germany Jun ZEW Current Conditions, f’cast 85.0, last 87.4

Key Events Ahead

  • (0430 ET/0830 GMT) Financial Conduct Authority holds conference on asset management – London
  • (0900 ET/1300 GMT) BoE’s Andy Haldane May 23 speech to be released – London
  • (1000 ET/1400 GMT) Senate Banking Committee votes on nominations of Richard Clarida and Michelle Bowman to Fed – Washington
  • (1200 ET/1600 GMT) Event on “The Future of Work – Banks on the Path to Agile Organization” – Frankfurt
  • N/A European Banking Association Day on banking tech topics – Munich
  • N/A Russian Finance Minister Anton Siluanov and Industry & Trade Minister Denis Manturov attend Expo 2025 conference – Paris
  • N/A Fed’s FOMC meeting starts – Washington
  • N/A Swedish Financial Stability Council meets to discuss Swedish economy – Stockholm

FX Beat

DXY; The dollar index surged to a 6-day peak after U.S. President Donald Trump and North Korean leader Kim Jong Un signed a comprehensive document, following a historic summit in Singapore aimed at the denuclearization of the Korean peninsula. The greenback against a basket of currencies trades 0.2 percent up at 93.81, having touched a low of 93.21 on Thursday, its lowest since May 17. FxWirePro’s Hourly Dollar Strength Index stood at 47.36 (Neutral) by 0500 GMT.

EUR/USD: The euro eased as investors turned cautious ahead of Eurozone ZEW survey, which is expected to show that Economic Sentiment slight edged up to 0.1 in June, below previous reading of 2.4. On Monday, the major rose above the 1.1800 handle on assurances from Italy that it would not leave the European Union. The European currency traded 0.1 percent down at 1.1769, having touched a high of 1.1839 on Thursday, its highest since May 16. FxWirePro’s Hourly Euro Strength Index stood at 26.07 (Neutral) by 0400 GMT. Investors’ attention will remain on series of data from the Eurozone economies, ahead of U.S. consumer price index and monthly budget statement. Immediate resistance is located at 1.1839 (Jun. 7 High), a break above targets 1.1896 (May 5 High). On the downside, support is seen at 1.1708 (10-DMA), a break below could drag it till 1.1652 (June 5 Low).

USD/JPY: The dollar rallied to a near 3-week peak above the 110.00 handle, as a historic U.S.-North Korea summit got underway in Singapore, raising hopes it could strike a deal to end a nuclear stand-off on the Korean peninsula. The major was trading 0.4 percent up at 110.43, having hit a high of 110.49 earlier, its highest since May 23. FxWirePro’s Hourly Yen Strength Index stood at -136.82 (Highly Bearish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. consumer price index and monthly budget statement. Immediate resistance is located at 110.85 (May 17 Low), a break above targets 111.18 (May 22 High). On the downside, support is seen at 109.85 (21-DMA), a break below could take it lower 109.49 (10-DMA).

GBP/USD: Sterling eased, extending losses for the third straight session, as sentiment over Brexit developments continued to deteriorate, with the UK’s Prime Minister Theresa May held between hardline Brexiteers and EU leadership in Brussels. Investors await UK average earnings report, with the headline earnings (excluding bonuses) expected to print at 2.9 percent, in-line with the previous figure. The major traded 0.1 percent down at 1.3364, having hit a high of 1.3471 on Thursday, it’s highest since May 22. FxWirePro’s Hourly Sterling Strength Index stood at -78.98 (Slightly Bearish) by 0400 GMT. Investors’ attention will remain on the UK claimant count change and average earnings, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3483 (May 21 High), a break above could take it near 1.3527 (May 18 High). On the downside, support is seen at 1.3302 (June 6 Low), a break below targets 1.3253 (June 1 Low). Against the euro, the pound was trading 0.05 percent down at 88.07 pence, having hit a low of 88.37 pence on Thursday, it’s lowest since May 7.

AUD/USD: The Australian dollar rose above the 0.7600 handle amid optimism around the historic Trump-Kim nuclear Summit. Investors seem to have ignored the National Bank of Australia report, which showed a deterioration in business conditions and business confidence indices in May. The Aussie trades 0.1 percent up at 0.7618, having hit a high of 0.7676 on Wednesday; it’s highest since Apr. 23. FxWirePro’s Hourly Aussie Strength Index stood at 57.36 (Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7565 (21-DMA), a break below targets 0.7539 (May 28 Low). On the upside, resistance is located at 0.7640, a break above could take it near 0.7682 (Apr 23 High).

NZD/USD: The New Zealand dollar steadied near recent peaks after data showed domestic electronic retail spending rose 4.2 percent in May from a year earlier. The Kiwi trades 0.3 percent up at 0.7042, having touched a high of 0.7060 on Wednesday, its highest level since Apr. 30. FxWirePro’s Hourly Kiwi Strength Index was at 153.40 (Highly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7089, a break above could take it near 0.7120. On the downside, support is seen at 0.6997 (June 5 Low), a break below could drag it below 0.6962.

 

Equities Recap

Asian shares traded in a volatile market, while the dollar rallied to a near 3-week peak against the yen on hopes that the U.S.-North Korea summit can pave the way towards a reduction in tensions between both the countries.

MSCI’s broadest index of Asia-Pacific shares outside Japan surged 0.05 percent.

Tokyo’s Nikkei rose 0.5 percent to 22,923.86 points, Australia’s S&P/ASX 200 index rallied 0.2 percent to 6,057.00 points, and South Korea’s KOSPI fell 0.05 percent to 2,469.63 points.

Shanghai composite index rose 0.8 percent to 3,076.22 points, while CSI300 index was trading 1.2 percent up at 3,823.96 points.

Hong Kong’s Hang Seng was trading 0.4 percent higher at 31,188.14 points. Taiwan shares shed 0.5 percent to 11,144.79 points.

 

Commodities Recap

Crude oil prices rose amid cautious optimism over the outcome of a summit between U.S. President Donald Trump and North Korean leader Kim Jong Un in Singapore. International benchmark Brent crude was trading 0.1 percent up at $76.42 per barrel by 0433 GMT, having hit a high of $77.58 on Friday, its highest since June 1. U.S. West Texas Intermediate was trading 0.2 percent up at $66.17 a barrel, after rising as high as $66.32 on Monday, its highest since June 1.

Gold prices declined as the dollar strengthened amid growing optimism over the U.S.-North Korea summit and a likely interest rate hike by the U.S. Federal Reserve. Spot gold eased 0.2 percent at $1,297.55 per ounce at 0437 GMT, having hit a high of $1,303.09 on Thursday, its highest price level since May 31. U.S. gold futures for August delivery were 0.1 percent lower at $1,301.50 per ounce.

 

Treasuries Recap

The 10-year U.S Treasury yield stood at 2.962 percent higher by 0.006 bps, while 5-year yield was 0.006 bps up at 2.809 percent.

The Japanese government bonds remained tad lower during late Asian session as investors await the country’s industrial production for the month of April and the Bank of Japan’s (BoJ) monetary policy decision, scheduled to be unveiled by later this week. The yield on the benchmark 10-year JGB note, which moves inversely to its price, traded 1/2 basis point higher at 0.04 percent, the yield on the long-term 30-year note rose 1 basis point higher at 0.73 percent and the yield on short-term 2-year hovered around -0.12 percent.

The Australian government bonds remained in tight trading range, after domestic markets opened following a long weakened and investors will now focus on the country’s employment report for the month of May, scheduled to be released on June 14 by 01:30GMT. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, rose 1/2 basis point to 2.80 percent, the yield on the long-term 30-year Note fell 1-1/2 basis points to 3.30 percent and the yield on short-term 2-year hovered around 2.07 percent.

The Canadian government bond prices were higher across the yield curve, with the two-year up 3.5 Canadian cents to yield 1.907 percent and the 10-year rising 13 Canadian cents to yield 2.308 percent. The gap between Canada’s 2-year yield and its U.S. equivalent widened by 4.7 basis points to a spread of -61.7 basis points, its widest since May 2017.

Source: FXWire Media Round Ups

 

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