News

Asia Roundup: Antipodeans rally on upbeat Chinese manufacturing PMI, crude oil rises as production cut takes effect, Asian shares advance amid subdued trading – Tuesday, January 3rd, 2017

Market Roundup

  • Singapore Q4 GDP +9.1 pct qtr/qtr annualized and seasonally adjusted Reuters poll +3.7 pct
     
  • Singapore Q4 GDP +1.8 pct yr/yr Reuter’s poll +0.6 pct
     
  • Singapore Q4 manufacturing +14.6 pct qtr/qtr annualized and seasonally adjusted
     
  • Singapore Q4 services +9.4 pct qtr/qtr annualized and seasonally adjusted
     
  • Singapore 2016 full-year growth 1.8 pct, above governments 1-1.5 pct forecast, but lowest since 2009
     
  • PBOC sets Yuan mid-point at 6.9498 / dollar vs 6.9370 previous
     
  • China Dec Caixin manufacturing PMI rises to 51.9 (vs poll 50.7, Nov 50.9)
  • China Dec Caixin manufacturing PMI highest since Jan 2013
     

Economic Data Ahead

  • (0200 ET/0700 GMT) Germany SN State CPI MM % Dec 0.00 previous
     
  • (0200 ET/0700 GMT) Germany SN State CPI YY % Dec 0.80 previous
     
  • (0245 ET/0745 GMT) France CPI (EU Norm) Prelim YY % Dec 0.70
     
  • (0300 ET/0800 GMT) Germany BB State CPI YY % Dec 1.00
     
  • (0300 ET/0800 GMT) Germany HE State CPI MM % Dec 0.00
     
  • (0300 ET/0800 GMT) Germany BY State CPI MM % Dec 0.00
     
  • (0300 ET/0800 GMT) Germany BY State CPI YY % Dec 0.80
     
  • (0300 ET/0800 GMT) Germany BB State CPI MM % Dec 0.10
     
  • (0300 ET/0800 GMT) Germany HE State CPI YY % Dec 0.80
     
  • (0330 ET/0830 GMT) Germany NW State CPI MM % Dec 0.00
     
  • (0330 ET/0830 GMT) Switzerland Manufacturing PMI Dec 56.60 
     
  • (0330 ET/0830 GMT) Germany NW State CPI YY % Dec 0.80      
     
  • (0355 ET/0855 GMT) Germany Unemployment Total SA mln Dec 2.66
     
  • (0355 ET/0855 GMT) Germany Unemployment Rate SA % Dec 6.00
     
  • (0355 ET/0855 GMT) Germany Unemployment Total NSA mln Dec 2.53
     
  • (0355 ET/0855 GMT) Germany Unemployment Chg SA k Dec -5.00
     
  • (0430 ET/0930 GMT) Great Britain Markit/CIPS Mfg PMI Dec 53.40
     
  • (0500 ET/1000 GMT) Germany BW State CPI MM % Dec 0.10
     
  • (0500 ET/1000 GMT) Germany BW State CPI YY % Dec 0.80
     
  • (0800 ET/1300 GMT) Germany HICP Prelim MM % Dec 0.60
     
  • (0800 ET/1300 GMT) Germany HICP Prelim YY% Dec 0.70
     

Key Events Ahead

No Significant Event Scheduled

FX Beat

DXY: The dollar eased versus its major peers as trading activity remained subdued as some markets were still closed in observance of observed New Year’s holidays. The greenback against a basket of currencies traded flat at 102.65, having touched an early high 102.88. FxWirePro's Hourly Dollar Strength Index stood at -118.16 (Highly Bullish) by 0500 GMT.

EUR/USD: The euro edged up, reversing some of its previous session losses, as the greenback eased across the board. On Monday, the major declined below the 1.0500 handle, despite strong manufacturing data for the Eurozone. The major trades 0.3 percent up at 1.0483, having hit a high of 1.0653 on Friday, its highest since mid-December. Investors’ attention will remain on German unemployment data and preliminary consumer price index, ahead of U.S. ISM manufacturing PMI and construction spending figures. FxWirePro's Hourly Euro Strength Index stood at 41.63 (Neutral) by 0400 GMT. Immediate resistance is located at 1.0500, a break above targets 1.0540. On the downside, support is seen at 1.0432 (Dec-27 Low), a break below could drag it till 1.0400.

USD/JPY: The dollar declined against the safe-haven Japanese yen, as the greenback’s retreated versus its major peers, after witnessing a bullish opening gap at the start of 2017. However, the major recovered some ground after hitting an intra-day low of 117.20, following upbeat Chinese Manufacturing PMI for the month of December, which boosted risk-on market sentiment. The pair trades 0.1 percent down at 117.36, having hit a low of 116.04 on Friday, its lowest since Dec. 14. Markets attention will remain on U.S. fundamental drivers amid an extended holiday break in Japan. FxWirePro's Hourly Yen Strength Index stood at -140.11 (Highly Bearish) by 0400 GMT. Immediate resistance is located at 117.81 (Dec 28-High), a break above targets 118.00. On the downside, support is seen at 116.99, a break below could take it near 116.54.

GBP/USD: Sterling rose above 1.2300 handle, attempting a minor recovery from a previous session low of 1.2270. Higher commodities’ prices and upbeat Chinese Caixin manufacturing PMI report boosted risk-on sentiment, providing support to risk currencies such as the British pound. Sterling trades 0.2 percent up at 1.2303, attempting to sustain gains above the 1.2300 handle. FxWirePro's Hourly Sterling Strength Index stood at 28.46 (Neutral) by 0400 GMT. Markets focus will remain on the UK manufacturing PMI and U.S. ISM manufacturing reports for near-term direction on the spot. Immediate resistance is located at 1.2350, a break above could take it near 1.2400. On the downside, support is seen at 1.2245 (Dec 30 Low), a break below targets 1.2200. Against the euro, the pound trades 0.1 percent up at 85.23 pence, having hit a low of 84.88 pence in the previous session.

AUD/USD: The Australian dollar rallied above the 0.7200 handle after data showed China's factory activity grew faster than expected in December. Chinese Caixin/ Markit Manufacturing Purchasing Managers' index rose to 51.9 from 50.9 in November, beating estimates of 50.7, while other report details indicated that the operation conditions picked up at the fastest pace in nearly four years.  The Aussie trades 0.7 percent higher at 0.7231, retreating from a low of 0.7164 touched in the prior session. FxWirePro's Hourly Aussie Strength Index stood at 77.47 (Slightly Bullish) by 0500 GMT. Investors will continue to digest upbeat Chinese data, ahead of U.S. ISM manufacturing print due later in the day. Immediate support is seen at 0.7159 (Dec 23 Low), a break below could drag it lower 0.7150. On the upside, resistance is located at 0.7250, a break above targets 0.7300.

NZD/USD: The New Zealand dollar rose by nearly 1 percent, following the release of upbeat Chinese manufacturing PMI data. Moreover, prevalent risk-on market sentiment and board based U.S. dollar weakness supported the bid tone around the major. However, thin trading limited gains as New Zealand and Japanese traders were still on an observed New Year holiday. The Kiwi trades 0.7 percent up at 0.6969, attempting to regain the 0.7000 handle. FxWirePro's Hourly Kiwi Strength Index was at 99.88 (Slightly Bullish) by 0500 GMT. The pair will continue to track overall market sentiment, ahead of New Zealand's GDT price index and a set of manufacturing PMI reports from the U.S. Immediate resistance is located at 0.7004 (21-DMA), a break above could take it till 0.7050. On the downside, support is seen at 0.6900, a break below could drag it till 0.6862.

Equities Recap

Asian shares gained on signs of solid factory growth in China, while most regional markets reopened after the New Year holiday.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.4 percent.

Australia's S&P/ASX 200 index gained 1.16 percent at 5,731.40 points and South Korea's KOSPI was trading 0.65 percent higher at 2,039.42 points.

Shanghai composite index rose 0.95 percent to 3,133.07 points, while CSI300 index was trading 0.92 percent higher at 3,340.81 points.

Hong Kong’s Hang Seng was trading 0.74 percent up at 22,163.06 points. Taiwan shares added 0.2 percent at 9,272.88 points.

Commodities Recap

Crude oil prices advanced, supported by expectations that a deal between OPEC and non-OPEC members to cut production will be effective in reducing the global supply glut. International benchmark Brent crude was 0.7 percent higher at $57.13 per barrel by 0407 GMT, close to 2016 high of $57.50 per barrel, hit on Dec. 12.. U.S. West Texas Intermediate crude rose 0.5 percent at $53.87 a barrel, not far from last year's high of $54.48 touched early Dec.

Gold prices rose, reversing most of its previous session losses, despite pressure from a strong dollar. Spot gold gained 0.55 percent to $1,157.24 an ounce by 0414 GMT, having hit a 2-week high of $1,163.05 an ounce on Friday. U.S. gold futures rose 0.5 percent to $1,157.20.

Treasuries Recap

The 10-year U.S treasury yield stood at 2.4462 percent higher by 0.014 bps, while 5-year yield was up by 0.012 bps at 1.9340 percent.

The Australian government bonds traded narrowly mixed in thin trading activity during a relatively quiet session that witnessed data of little significance. We foresee that Treasury prices will keep drifting between small gains and losses in quiet trading session.The yield on the benchmark 10-year Treasury note fell 1 basis points to 2.75 percent, the yield on 15-year note hovered around 3.22 percent, while the yield on short-term 2-year slid 1/2 basis point to 1.90 percent.

New Zealand government bonds did not trade due to a public holiday.


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