Asia roundup: Aussie rebounds from 2- week lows following RBA governor lowe’s comments, Dollar hits 3-week peak against Yen ahead of Federal Open Market Committee policy meeting outcome, Asian shares ease – Wednesday, June 13th, 2018
- Japan’s defence minister says U.S.-S.Korean military drills ‘vital’
- N.Korea frames summit as a win as Trump halts war games
- PM May faces another day of Brexit compromise in parliament
- Australia interest rates seen staying low for longer – RBA governor
- Australia Jun Consumer Sentiment, 0.3%, last -0.6%
- New Zealand May Food Price Index, 0.0%, last 0.1%
- POLL-Economists split on 2019, 2020 BOJ tapering; Japan needs more innovation
- Mexican presidential favorite says a NAFTA collapse “not fatal”
Economic Data Ahead
- (0430 ET/0830 GMT) Great Britain May CPI YY, f’cast 2.5%, last 2.4%
- (0430 ET/0830 GMT) Great Britain May PPI Input Prices YY NSA, f’cast 7.6%, last 5.3%
- (0430 ET/0830 GMT) Great Britain May PPI Output Prices YY NSA, f’cast 2.9%, last 2.4%
- (0430 ET/0830 GMT) Great Britain May PPI Core Output Prices YY NSA, f’cast 2.5%, last 2.4%
- (0430 ET/0830 GMT) Great Britain May RPI YY, f’cast 3.4%, last 3.4%
- (0500 ET/0900 GMT) EZ Apr Industrial Production YY, f’cast 2.8%, last 3.0%
- (0500 ET/0900 GMT) EZ Q1 Employment YY, last 1.6%
Key Events Ahead
- (0230 ET/0630 GMT) Riksbank Seminar: A changing mortgage market – Stockholm
- (0300 ET/0700 GMT) Greece’s Finance Minister Euclid Tsakalotos and Labour Minister Effie Achtsioglou speak at conference – Brussels
- (0400 ET/0800 GMT) New Bank of Ireland’s Francesca McDonagh lays priorities for Ireland’s biggest bank – Dublin
- (0430 ET/0830 GMT) BoE’s Lyndon Nelson speaks at OpRisk Europe – London
- (1315 ET/1715 GMT) BoE’s Anil Kashyap speaks at OMFIF City lecture – London
- (1400 ET/1800 GMT) Fed’s FOMC announces decision on interest rate, followed by statement
- (1430 ET/1830 GMT) Fed’s Jerome Powell holds news conference on interest rate policy – Washington
- N/A European Banking Association Day on banking tech topics – Munich
DXY: The dollar index rose to a fresh 1-week peak as the Fed concludes its two-day policy meeting later, at which it is widely expected to signals tightening policy four times in 2018, from the three times indicated earlier this year. The greenback against a basket of currencies trades 0.05 percent up at 93.85, having touched a low of 93.21 on Thursday, its lowest since May 17. FxWirePro’s Hourly Dollar Strength Index stood at 92.40 (Slightly Bullish) by 0500 GMT.
EUR/USD: The euro steadied after easing in the previous session, amid speculation that the ECB could signal its intention to start unwinding its massive bond-purchasing program. The European currency traded 0.05 percent up at 1.1749, having touched a high of 1.1839 on Thursday, its highest since May 16. FxWirePro’s Hourly Euro Strength Index stood at -63.80 (Bearish) by 0500 GMT. Investors’ attention will remain on series of data from the Eurozone economies, ahead of U.S. producer price index, FOMC policy meeting outcome and Federal Reserve Chairman Jerome Powell’s press conference. 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 1.1690 (May 24 Low), a break below could drag it till 1.1652 (June 5 Low).
USD/JPY: The dollar surged to a 3-week peak as investors awaited the Federal Reserve’s policy meeting, which could give clues on the number of rate hikes this year. The U.S. central bank concludes its two-day policy meeting later in the day, at which it is widely expected to hike rates for the second time this year. The major was trading 0.2 percent up at 110.62, having hit a high of 110.68 earlier, its highest since May 23. FxWirePro’s Hourly Yen Strength Index stood at -109.79 (Highly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. producer price index, FOMC policy meeting outcome and Federal Reserve Chairman Jerome Powell’s press conference. 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 109.95 (5-DMA), a break below could take it lower 109.65 (10-DMA).
GBP/USD: Sterling eased, extending losses for the fourth straight session after British Prime Minister Theresa May faced a showdown in parliament over amendments to a bill for Britain’s exit from the European Union next year that threatened to undermine her authority. 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 -38.99 (Neutral) by 0500 GMT. Investors’ attention will remain on the UK retail price index, producer price index, and consumer price index, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3439 (June 8 High), a break above could take it near 1.3483 (May 21 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 0.1 percent down at 87.90 pence, having hit a low of 88.37 pence on Thursday, it’s lowest since May 7.
AUD/USD: The Australian dollar rebounded after falling to a near 2-week low earlier in the day as Reserve Bank of Australia Governor Philip Lowe reiterated that any increase in the country’s official cash rates was still some time away as wage growth and consumer prices remained subdued. The Aussie trades 0.05 percent up at 0.7571, having hit a low of 0.7576; it’s lowest since Jun. 1. FxWirePro’s Hourly Aussie Strength Index stood at -5.90 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7539 (May 28 Low), a break below targets 0.7522 (May 23 Low). On the upside, resistance is located at 0.7603 (10-DMA), a break above could take it near 0.7682 (Apr 23 High).
NZD/USD: The New Zealand dollar steadied above the 0.7000 handle after declining to an over 1-week low earlier, as investors remained focused on the U.S. central bank policy meeting. The Kiwi trades 0.1 percent up at 0.7013, having touched a high of 0.7060 on Wednesday, its highest level since Apr. 30. FxWirePro’s Hourly Kiwi Strength Index was at 142.63 (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 0.6985 (May 5 Low), a break below could drag it below 0.6962.
Asian shares tumbled as investors focus shifted from the historic U.S.-North Korea summit in Singapore to the Federal Reserve policy decision later in the day for clues on future rate hikes.
MSCI’s broadest index of Asia-Pacific shares outside Japan slumped 0.5 percent.
Tokyo’s Nikkei rose 0.4 percent to 22,982.65 points, Australia’s S&P/ASX 200 index eased 0.5 percent to 6,021.70 points.
Shanghai composite index fell 0.6 percent to 3,061.69 points, while CSI300 index was trading 0.7 percent down at 3,800.04 points.
Hong Kong’s Hang Seng was trading 0.6 percent lower at 30,925.43 points. Taiwan shares added 0.3 percent to 11,173.21 points.
Crude oil prices rallied, despite rising supplies in the United States and expectations that voluntary output cuts led by producer cartel OPEC could be loosened. International benchmark Brent crude was trading 0.3 percent up at $75.63 per barrel by 0441 GMT, having hit a high of $77.58 on Friday, its highest since June 1. U.S. West Texas Intermediate was trading 0.05 percent up at $66.01 a barrel, after rising as high as $66.32 on Monday, its highest since June 1.
Gold prices declined as investors awaited the U.S. Federal Reserve’s policy meeting outcome which could give cues on future rate hikes. Spot gold was trading 0.1 percent down at $1,294.87 per ounce at 0443 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 $1,298.80 per ounce.
The 10-year U.S Treasury yield stood at 2.964 percent higher by 0.007 bps, while 5-year yield was 0.006 bps up at 2.814 percent.
The Japanese government bonds remained flat during late Asian session as investors remained side-lined in choppy trade amid lack of significant economic data. The yield on the benchmark 10-year JGB note, which moves inversely to its price, hovered around 0.05 percent, the yield on the long-term 30-year note flat at 0.73 percent and the yield on short-term 2-year remained steady at -0.13 percent.
The Australian government bonds gained on Wednesday ahead of the FOMC monetary policy decision, where the U.S. central bank is widely expected to hike its fed funds rate. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, fell 2-1/2 basis points to 2.787 percent, the yield on the long-term 30-year Note dipped 5 basis points to 3.284 percent and the yield on short-term 2-year down 1 basis point to 2.073 percent.
The Canadian government bond prices were mixed across the yield curve, outperforming U.S. Treasuries. The 10-year rose 7 Canadian cents to yield 2.298 percent.
Source: FXWire Media Round Ups