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Asia Roundup: Antipodeans slump on downbeat Chinese economic data, dollar index steadies ahead of central bank speeches, Asian shares decline – Tuesday, November 14th, 2017

Market Roundup

  • Weaker than ever, May faces test in UK parliament over Brexit plans
     
  • British government introduces budget for Northern Ireland
     
  • China Oct Industrial Output y/y, 6.2% vs 6.6%, f' cast 6.3%
  • China Oct Retail Sales y/y, 10.0% vs 10.3%, f’ cast 10.4%
  • China Oct Urban Investment (ytd) y/y, 7.3% vs 7.5%, f'cast 7.4%
     
  • China property investment growth cools in Oct, sales decline accelerates
     
  • Eighth Australian lawmaker falls in citizenship crisis
     
  • Australia Oct NAB Business Conditions 21 vs 14
     
  • Australia Oct NAB Business Confidence 8 vs 7
     
  • Japan wages seen rising 2-2.5 pct in spring, below Abe's target – Rtrs poll
     
  • Risks ahead for U.S. tax push as disputes linger, Trump returns
     
  • U.S. Senate Republicans ask Moore to withdraw as new accuser steps forward

Economic Data Ahead

  • (0200 ET/0700 GMT) Germany Q3 GDP Flash q/q, SA, y/y, NSA, f' cast 0.6%, 2.3% 0.6%, 0.8% last
     
  • (0200 ET/0700 GMT) Germany Oct HICP Final y/y, f' cast 1.5%, 1.5% last
     
  • (0430 ET/0930 GMT) Great Britain Oct CPI m/m, y/y, f'cast 0.2%, 3.1%, 0.3%, 3.0% last
     
  • (0500 ET/1000 GMT) Eurozone Q3 GDP Flash Estimate q/q, y/y, f' cast 0.6%, 2.5%, 0.6%, 2.5% last
     
  • (0500 ET/1000 GMT) Eurozone Industrial Production m/m, y/y, f' cast -0.6%, 3.2%, 1.4%, 3.8% last
     
  • (0500 ET/1000 GMT) Germany Nov ZEW Economic Sentiment f' cast 20.0, 17.6 last
     
  • (0500 ET/1000 GMT) Germany Nov ZEW Current Conditions f' cast 88.0, 87.0 last

Key Events Ahead

  • N/A EU Foreign Affairs Council meeting
     
  • (0305 ET/0805 GMT) Fed's Yellen and Evans, ECB's Draghi, BoJ's Kuroda, BoE's Carney are set to speak at ECB Conference – Frankfurt
     
  • (0815 ET/1315 GMT) Fed's Bullard presents on US economy – Louisville
     
  • (1030 ET/1530 GMT) BoE's Cunliffe speaks at Oxford Economic Society – London
     
  • (1030 ET/1530 GMT) ECB's Coeure speaks at ICMA meeting – Belgium
     
  • (1305 ET/1805 GMT) Fed's Bostic speaks at University of Montgomery – Montgomery

FX Beat

DXY: The dollar index eased as the bulls took a breather after the recent upsurge and awaited fresh impetus from the upcoming central bankers’ speeches. The greenback against a basket of currencies traded 0.1 percent down at 94.45, having touched a low of 94.26 on Friday, its lowest since Oct. 26. FxWirePro's Hourly Dollar Strength Index stood at -37.30 (Neutral) by 0500 GMT.

EUR/USD: The euro consolidated within narrow ranges as the investors remain in a wait-and-see mode ahead of the Eurozone dataflow and ECB President Draghi’s speech due today. The European currency traded 0.1 percent up at 1.1672, having touched a high of 1.1677 on Friday; its highest since Nov. 3. FxWirePro's Hourly Euro Strength Index stood at 108.59 (Highly Bullish) by 0400 GMT. Investors’ attention will remain on the Eurozone gross domestic product, industrial production, ahead of the U.S. producer price index, business optimism index and Fed Yellen and Bullard’s speech. Immediate resistance is located at 1.1707 (50.0% retracement of 1.1837 and 1.1674), a break above targets 1.1737 (38.2% retracement). On the downside, support is seen at 1.1630 (5-DMA), a break below could drag it lower 1.1580 (Nov. 6 Low).

USD/JPY: The dollar rose, extending previous session gains, boosted by higher U.S. Treasuries yields and on the divergence between the Fed and the BoJ. The major was trading 0.1 percent up at 113.67, having hit a low of 113.09 on Thursday, its lowest since Oct. 31. FxWirePro's Hourly Yen Strength Index stood at -50.13 (Bearish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. producer price index, business optimism index and Fed Yellen and Bullard speech for further momentum. Immediate resistance is located at 113.80 (10-DMA), a break above targets 114.40. On the downside, support is seen at 113.20, a break below could take it near 112.80.

GBP/USD: Sterling steadied after falling to a 1-week low in the previous session on worries about Theresa May's ability to stay on as British prime minister. The major traded flat at 1.3117, having hit a low of 1.3061 on Monday, its lowest since Nov. 6. FxWirePro's Hourly Sterling Strength Index stood at -1.18 (Neutral) by 0400 GMT. Investors’ focus will remain on political developments and series of UK economic data, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3155 (10-DMA), a break above could take it near 1.3200. On the downside, support is seen at 1.3085 (Nov. 9 Low), a break below targets 1.3040. Against the euro, the pound was trading flat at 88.95 pence, having hit a low of 88.22 pence the day before, its lowest since Nov. 3.

AUD/USD: The Australian dollar rebounded after falling to a 4-month low earlier in the session as a surprisingly strong domestic survey of business activity helped offset the disappointment from downbeat Chinese data. National Australia Bank's business conditions rose to a high of +21 index points in October, up +7 points from September, recording its highest level since the monthly series began in 1997. The Aussie trades 0.2 percent up at 0.7633, having hit a low of 0.7609 earlier; it’s lowest since Jul. 11. FxWirePro's Hourly Aussie Strength Index stood at -52.76 (Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7609 (Session Low), a break below targets 0.7572. On the upside, resistance is located at 0.7668 (78.6% retracement of 0.7883 and 0.7609), a break above could take it near 0.7714 (61.8% retracement).

NZD/USD: The New Zealand dollar slumped to a 2-week low on the back of divergent monetary policy outlooks between the Fed and RBNZ and the latest downbeat Chinese economic data. The Kiwi trades 0.6 percent down at 0.6862, having touched a low of 0.6857 earlier, its lowest level since Nov. 1. FxWirePro's Hourly Kiwi Strength Index was at -169.82 (Highly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6904 (61.8% retracement of 0.6979 and 0.6857), a break above could take it near 0.6932 (38.2% retracement of 0.6979 and 0.6857). On the downside, support is seen at 0.6850, a break below could drag it till 0.6820.

Equities Recap

Asian shares tumbled, weighed down by Chinese economic data disappointed, while the greenback eased ahead of the speeches from the BoJ Governor Kuroda and Fed Chair Yellen at the ECB conference.

MSCI's broadest index of Asia-Pacific shares outside Japan edged down 0.1 percent.

Tokyo's Nikkei gained 0.2 percent to 22,427.07 points, Australia's S&P/ASX 200 index slumped 0.8 percent to 5,968.70 points and South Korea's KOSPI declined 0.06 percent to 2,528.73 points.

Shanghai composite index fell 0.6 percent to 3,428.81 points, while CSI300 index was trading 0.7 percent down at 4,099.28 points.

Hong Kong’s Hang Seng was trading 0.03 percent higher at 29,190.19 points. Taiwan shares added 0.03 percent to 10,687.18 points.

Commodities Recap

Crude oil prices fell as the cautious sentiment of the past week prevailed, despite ongoing OPEC-led production cuts and Middle East tensions. International benchmark Brent crude was trading 0.3 percent down at $62.92 per barrel by 0416 GMT, having hit a low of $62.59 the day before, its lowest since Nov. 6. U.S. West Texas Intermediate was trading 0.2 percent down at $56.60 a barrel, after falling as low as $56.28 on Monday, its lowest since Nov. 6.

Gold prices eased, reversing some of its previous session gains, as the dollar rose supported by higher U.S. Treasury yields. Spot gold trading 0.1 percent down at $1,276.63 per ounce at 0423 GMT, having touched its highest since Oct. 20 at $1,288.31 an ounce on Thursday. U.S. gold futures for December delivery slipped 0.1 percent to $1,277.60.

Treasuries Recap

The 10-year U.S Treasury yield stood at 2.403 percent higher by 0.004 bps, while 5-year yield was 0.007 bps up at 2.079 percent.

The Japanese government bonds traded narrowly mixed in quiet trading session as investors remained focused on the recent developments in the U.S. Treasury yields, although the big movements were limited as Nikkei 225 continued retreating from 26-year peaks. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, traded flat at 0.051 percent, the yield on long-term 40-year climbed nearly 1 basis point to 0.991 percent and the yield on short-term 2-year declined 1/2 basis point to -0.170 percent.

The Australian government bonds slumped following weakness in the U.S. Treasuries after U.S. Treasury two-year note yields touched a fresh nine-year high as investors priced in an interest rate hike of 25 basis points by the Federal Reserve in December meeting. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 2-1/2 basis point to 2.659 percent, the yield on the long-term 30-year note jumped 1-1/2 basis points to 3.425 percent and the yield on short-term 2-year climbed 4-1/2 basis points to 1.852 percent.

The New Zealand government bonds closed a tad lower in a quiet trading session, although rising U.S. Treasury yields dragged the bonds prices lower. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1 basis point to 2.97 percent, the yield on 20-year note also climbed 1 basis point to 3.52 percent and the yield on short-term 2-year ended 1 basis point higher at 2.06 percent.


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