Asia Roundup: Aussie falls against major peers as retail sales data misses expectations, gold steady at $1,335, Asian markets mixed – Thursday, Sept 07, 2017

Market Roundup

  • Australia July Retail sales m/m, 0.0% vs forecast 0.3%, revised 0.2% last 0.3%.
  • Australia July Trade balance (A$), 460 mln vs forecast 875 mln, revised 888 mln last 856 mln.
  • Japan end-Aug foreign reserves $1.268 trln, end-July $1.260 trln.
  • Japan mulls extra budget as Abenomics disappoints – Nikkei.
  • MoF flow data week-ended Sep 2 – Japanese sell net Y117.9 bln foreign bonds.
  • Foreigners sell Y158.3bln Japan stks, Y1.481trln bills, buy Y1.359trln JGBs.
  • Japan’s Tepco, Chubu Electric to buy more Aussie LNG – Nikkei.
  • Trump sides with Democrats on debt limit in rare bipartisan deal.
  • Fed's Fischer resigns, leaving Trump earlier chance to shape central bank.
  • South Korea deploys anti-missile system as US seeks tough North Korea sanctions.
  • Britain's May calls on lawmakers to back bill, move closer to Brexit.
  • New Zealand 2nd-qtr wholesale sales rise 1.7 pct.

Economic Data Ahead

  • (0330 ET/0730 GMT) UK August Halifax House prices m/m, 0.2% eyed, last 0.4%.
  • (0500 ET/0900 GMT) EU Q2 GDP Revised, 0.6% q/q, 2.2% y/y eyed; last 0.6%, 2.2%.

Key Events Ahead

  • (0330 ET/0730 GMT) Swedish Central Bank announces interest rate decision.
  • (0530 ET/0930 GMT) ES E3.5-4.5/E3.5-4.5/E3.5-4.5/E0.25-0.75 bln for 5/10/16/10 year auction.
  • (0550 ET/0950 GMT) FR E8-9/E8-9/E8-9/E8-9 bln for 10/13/19/43 year auction.
  • (0745 ET/1145 GMT) ECB interest rate decision announcement.
  • (0830 ET/1230 GMT) ECB's Draghi holds a press conference, after the interest rate meeting.

FX Recap

USD: The dollar's index against a basket of six major currencies was trading around 92.18 marks.

EUR/USD: The euro held firm on Thursday ahead of a European Central Bank policy decision, with the focus on what the ECB might say about the currency's recent strength and how that may influence the policy outlook. The euro edged up 0.1 percent to $1.1925, still some way off last week's high of $1.2070, its highest level since January 2015. Pair made intraday high at $1.1934 and low at $1.1913 levels. A sustained close above $1.1916 is requires for the upside rally. Alternatively, reversal from key resistance will drag the parity down towards $1.1758 marks. Immediate support was seen 1.1850 and resistance was seen at 1.2070 marks.

USD/JPY: The yen trades marginally higher against U.S. dollar and was trading around 108.90 marks in early hours of Asia. Pair made intraday high at 109.26 and low at 108.89 levels.  A sustained close above 109.17 is required to take the parity higher towards 110.36, 111.33, 112.20, 113.12, 115.37 and 117.42 marks. Alternatively, a daily close below 109.17 will drag the parity down towards 105.55 levels.

GBP/USD:  The sterling hit its highest in a month against the dollar on Wednesday, a day after its biggest rise in nearly two months, as investors trimmed some bearish bets before parliament discusses the European Union repeal bill. Helped by a weaker tone to both the dollar and euro globally, the pound racked up another third of a percent in gains by late afternoon in London to trade as high as $1.3081. It also gained 0.1 percent to 91.30 pence per euro, its strongest in more than two weeks.

AUD/USD: The Australian dollar eased to $0.7990, from an early top of $0.8019, again struggling to clear stiff chart resistance above the 80 cent barrier. Australia’s July retail sales m/m decrease to 0.0 % (forecast 0.3 %) vs previous 0.2 % (revised from 0.3 %). In addition, Australia’s July trade balance G&A (A$) decrease to 460 mln aud (forecast 875 mln aud) vs previous 856 mln aud.

NZD/USD: The kiwi was a shade firmer on the U.S. dollar at $0.7210 NZD=D4, though off Wednesday's $0.7261 peak. The currency has struggled in recent weeks amidst a hotly contested race to the national election on Sept. 23. The centre left Labour Party has come from behind to run neck and neck with the ruling centre right National Party, leading to some uncertainty among investors.

Equities Recap

Japan’s Nikkei was trading 0.22 pct higher at 19,401.25 points.

Hong Kong’s Hang seng was trading 0.15 percent lower at 27,572.29 points.

Australia’s S&P/ASX 200 was trading 0.05 pct lower at 5,686.20 points.

Shanghai composite index to open down 0.1 pct at 3,383.63 points and China's CSI300 index to open up 0.1 pct at 3,851.69 points.

Taiwan stock was trading around 0.25 pct lower at 10,522.32 points.

India’s NSE Nifty was trading around 0.25 percent higher at 9,939.15 points and BSE Sensex was trading at 0.18 percent higher at 31,719.22 points.

South Korea’s kospi was trading 1.2 percent higher at 2,347.22 points.

Commodities Recap

U.S. West Texas Intermediate (WTI) crude futures were at $49.08 barrel at 0237 GMT, 8 cents below their last settlement, but not far off their highest in more than three weeks, reached in the previous session. Brent crude futures, the benchmark for oil prices outside the United States, dipped 9 cents to $54.11 a barrel, though still not far from May highs reached the previous day.

Gold held steady early on Thursday, supported by a weaker dollar and lingering concerns over North Korea, as markets awaited the outcome of a European Central Bank (ECB) policy meeting later in the day. Spot gold was little changed at $1,334.06 per ounce at 0407 GMT, after easing 0.3 percent in the previous session. U.S. gold futures for December delivery were also flat at $1,339.50.

Treasuries Recap

New Zealand government bonds eased, sending yields 2.5 basis points higher at the long end of the curve.

Australian government bonds likewise dipped, with the three-year bond contract off 5 ticks at 97.980. The 10-year contract fell 4.5 ticks to 97.3600.

U.S. 10-year treasury yield held at 2.094 pct vs U.S. close of 2.106 pct on Wednesday.

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