Asia roundup: Aussie hits 2-week lows as trade balance shrinks, Dollar gains on U.S. tax optimism, Asian shares consolidate – Thursday, December 7th, 2017
- Bitcoin rises above $14,000 on Bitstamp to record high
- China’s growth objectives clash with financial stability goal – IMF
- BoJ Gov Kuroda – Sticks to script, QQE/YCC working, sustainable
- Japan economy doing better, optimistic on achieving CPI target
- Japan to spend Y2.9 trln on policy efforts in supplementary budget -Nikkei
- Japan Dec Reuters Tankan mfg index +27, non-mfg +34, Nov +27, +31 Mar +28, +31
- Fitch – Japan GDP +1.5% in ’17, +1.3% in ’18, longest expansion since ’01?
- U.S. Senate votes to pursue tax bill negotiations with House
- Trump’s eldest son questioned in U.S. Congress about Russia
- EU parliament details UK concessions on rights
- Britain to propose new language on Irish border, Irish PM says
- Germany’s SPD leader to ask rank-and-file to back new government
- Australian Oct Trade Balance G&S (A$) 105 mln, 1,745 mln last, f’ cast 1.375 mln, 1.604 mln rvsd
Economic Data Ahead
- (0200 ET/0700 GMT) Germany Oct Industrial Output m/m, f’ cast 1.0%, -1.6% last
- (0330 ET/0830 GMT) Great Britain Nov Halifax House Prices m/m, f’ cast 0.2%, 0.3% last
- (0330 ET/0830 GMT) Great Britain Halifax House Price 3m, y/y, f’ cast 3.9%, last 4.5%
- (0500 ET/1000 GMT) EZ Q3 GDP Revised q/q, f’ cast 0.6%, 0.6% last
- (0500 ET/1000 GMT) EZ GDP Revised y/y, f’ cast 2.5%, 2.5% last
Key Events Ahead
- (0200 ET/0700 GMT) Riksbank’s Floden speaks at a conference – Stockholm
- (0300 ET/0800 GMT) ECB General council meeting – Frankfurt
- (0400 ET/0900 GMT) Riksbank’s Skingsley takes part in a conference – Paris
- (0830 ET/1330 GMT) Fed’s Dudley speaks at an event – New York
- (1000 ET/1500 GMT) ECB’s Draghi holds a news conference – Frankfurt
DXY: The dollar index touched a 2-week peak, underpinned by higher Treasury yields and U.S. tax optimism. The greenback against a basket of currencies traded 0.2 percent up at 93.65, having touched a high of 93.66 earlier, its highest since Nov. 22. FxWirePro’s Hourly Dollar Strength Index stood at 123.48 (Highly Bullish) by 0500 GMT.
EUR/USD: The euro consolidated within a narrow range after falling for two straight sessions, as the US dollar hit a two-week top against its main competitors amid higher Treasury yields. The European currency traded flat at 1.1797, having touched a low of 1.1800 on Tuesday, its lowest since Nov. 22. FxWirePro’s Hourly Euro Strength Index stood at -25.21 (Neutral) by 0500 GMT. Investors’ attention will remain on the gross domestic product, ahead of U.S. unemployment claim benefits and consumer credit change. Immediate resistance is located at 1.1864 (10-DMA), a break above targets 1.1940. On the downside, support is seen at 1.1780 (Previous Session Low), a break below could drag it lower 1.1756.
USD/JPY: The dollar rose, reversing some of its previous session losses, as optimism towards U.S. lawmakers’ making progress on the tax legislation continued to grow. The major was trading 0.2 percent up at 112.48, having hit a high of 113.08 on Monday, its highest since Nov. 17. FxWirePro’s Hourly Yen Strength Index stood at 104.08 (Highly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. unemployment claim benefits and consumer credit change for further momentum. Immediate resistance is located at 112.79 (50.0% retracement of 114.73 and 110.84), a break above targets 113.25 (38.2% retracement). On the downside, support is seen at 112.00, a break below could take it near 111.73.
GBP/USD: Sterling slumped, extending losses for the third straight session, amid growing concerns that a Brexit deal may be unlikely before next week’s key EU summit. The major traded 0.2 percent down at 1.3370, having hit a low of 1.3357 the day before, it’s lowest since Nov. 29. FxWirePro’s Hourly Sterling Strength Index stood at -45.31 (Neutral) by 0500 GMT. Investors’ focus will remain on developments surrounding Brexit deal, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3462 (5-DMA), a break above could take it near 1.3549. On the downside, support is seen at 1.3357 (Previous Session Low), a break below targets 1.3291 (21-DMA). Against the euro, the pound was trading 0.2 percent down at 88.20 pence, having hit a high of 87.55 pence on Monday, it’s highest since Nov. 1.
AUD/USD: The Australian dollar declined to an over 2-week low after data showed the economy’s trade surplus slumped in October on weaker iron ore prices. The country’s trade surplus shrank to A$105 million, down from A$1.6 billion in September and expectations of A$1.4 billion. The Aussie trades 0.2 percent down at 0.7548, having hit a low of 0.7542 earlier; it’s lowest since Nov. 21. FxWirePro’s Hourly Aussie Strength Index stood at -113.39 (Highly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7542 (Session Low), a break below targets 0.7521 (Jun. 12 Low). On the upside, resistance is located at 0.7588 (5-DMA), a break above could take it near 0.7630.
NZD/USD: The New Zealand dollar slumped to a 3-day low as the greenback gained after U.S. Senate Republicans agreed to talks with the House of Representatives on finalizing tax legislation on Wednesday. The Kiwi trades 0.4 percent down at 0.6855, having touched a low of 0.6850 earlier, its lowest level since Dec. 4. FxWirePro’s Hourly Kiwi Strength Index was at 20.29 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6900, a break above could take it near 0.6945. On the downside, support is seen at 0.6850 (Session Low), a break below could drag it lower 0.6816 (Dec. 1 Low).
Asian shares consolidated within narrow ranges, as weaker oil and copper prices weighed on market sentiment, while the greenback touched a 2-week peak on U.S. tax optimism.
MSCI’s broadest index of Asia-Pacific shares outside Japan traded flat.
Tokyo’s Nikkei rose 1.4 percent to 22,500.56 points, Australia’s S&P/ASX 200 index rallied 0.5 percent to 5,977.70 points and South Korea’s KOSPI slumped 0.4 percent to 2,465.56 points.
Shanghai composite index fell 0.3 percent to 3,282.68 points, while CSI300 index was trading 0.7 percent down at 3,987.31 points.
Hong Kong’s Hang Seng was trading 0.6 percent higher at 28,400.31 points. Taiwan shares shed 0.4 percent to 10,355.76 points.
Crude oil prices steadied after declining to multi-week lows in the previous session following a decrease in U.S. crude inventories, however, rising gasoline stocks and crude production weighed on the market. International benchmark Brent crude was trading 0.4 percent up at $61.46 per barrel by 0429 GMT, having hit a low of $61.11 on Wednesday, its lowest since Nov. 17. U.S. West Texas Intermediate was trading 0.2 percent higher at $56.14 a barrel, after falling as low as $55.85 the day before, its lowest since Nov. 17.
Gold prices edged lower, extending losses for third straight session, as the dollar steadied against its peers, supported by optimism on U.S. tax reforms. Spot gold was down at $1,263.04 an ounce by 0435 GMT, having hit its lowest since Oct. 6 at $1260.88 on Tuesday. U.S. gold futures were 0.1 percent lower at $1,265.30.
The 10-year U.S Treasury yield stood at 2.345 percent higher by 0.016 bps, while 5-year yield was 0.013 bps up at 2.131 percent.
The Australian government bond futures were mixed, with the three-year bond contract up 1 ticks at 98.050. The 10-year contract slipped 1.5 ticks to 97.4600.
The New Zealand government bonds eased, sending yields 2.5 basis points higher at the long end of the curve.
The Canadian government bond prices were higher across the yield curve, with the two-year up 7 Canadian cents to yield 1.499 percent and the 10-year rising 32 Canadian cents to yield 1.855 percent. The gap between the 2-year yield and its U.S. equivalent widened by 2.9 basis points to a spread of -31.8 basis points.
Source: FXWire Media Round Ups