News

Asia Roundup: Antipodeans at 2-week peak, dollar index off highs on slower U.S. wage growth and inflation concerns, Asian shares surge amid improving risk appetite – Monday, March 12th, 2018

Market Roundup  

  • Japan PM wife's name removed from documents in suspected cronyism scandal-media
     
  • Japan FinMin Aso says to cooperate fully with probe, no intention to resign
     
  • Not just theater: U.S. officials defend Trump-Kim meeting
     
  • Germany, China warn Trump tariff moves threaten global trade
     
  • China removes presidential term limits, Xi could stay for life
     
  • China Jan-Feb central govt-owned firms' profit +22.6 pct y/y -state assets
     
  • Chinese banks sixth-largest global creditor group – BIS
     
  • U.S. tariff exemptions to boost Australian exports – industry
     
  • “No deal” Brexit could cost UK, EU companies 58 bln pounds -report
     
  • UK's Hammond sees light at end of austerity tunnel, but debt must fall
     
  • UK consumer spending suffers weakest start since 2012 – Visa
     
  • Keep calm and carry on with policy normalisation, BIS tells central banks
     
  • Speculators boost net short dollar bets to four-week high -CFTC

Economic Data Ahead

  • No major economic data releases

Key Events Ahead

  • N/A ECB’s Mario Draghi and Benoit Coeure participate in the Eurogroup meeting in Brussels

FX Beat

DXY: The dollar index eased, extending previous session losses, as mixed details from US monthly jobs report prompted investors to price in only three Fed rate hikes this year. The greenback against a basket of currencies 0.1 percent down at 90.03, having touched a high of 90.36 on Friday, its highest since Mar. 1. FxWirePro's Hourly Dollar Strength Index stood at -42.44 (Neutral) by 0500 GMT.

EUR/USD: The euro steadied after falling to a 4-day low in the previous session on European Central Bank President Mario Draghi's comments, citing that regional inflation remained subdued and rising protectionism was a risk. The European currency traded 0.2 percent up at 1.2323, having touched a high of 1.2460 on Thursday, its highest since Feb. 16. FxWirePro's Hourly Euro Strength Index stood at -53.34 (Bearish) by 0400 GMT. Investors’ attention will remain on series of economic data from the Eurozone economies, ahead of U.S. monthly budget statement. Immediate resistance is located at 1.2353 (5-DMA), a break above targets 1.2465 (Feb 14 High). On the downside, support is seen at 1.2273 (Previous Session Low), a break below could drag it lower 1.2221.

USD/JPY: The dollar declined after rising to an over 1-week high in the previous session as strong U.S. jobs growth data was offset by slower increases in wages, resulting in money market traders to price in the Fed would hike interest rates three times this year. The major was trading 0.2 percent down at 106.55, having hit a high of 107.04 on Friday, its highest since Mar. 1. FxWirePro's Hourly Yen Strength Index stood at 54.83 (Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. monthly budget statement. Immediate resistance is located at 107.20 (Mar 1), a break above targets 107.67 (Feb. 27). On the downside, support is seen at 105.89, a break below could take it lower 105.25.

GBP/USD: Sterling rose, extending previous session gains after British industrial production data released on Friday showed the UK's manufacturing sector continued to expand. The major traded 0.1 percent up at 1.3855, having hit a high of 1.3929 last week, it’s highest since Feb 27. FxWirePro's Hourly Sterling Strength Index stood at 20.36 (Neutral) by 0500 GMT. Investors’ focus will remain on the U.S. fundamental drivers, amid a lack of economic data from the UK docket. Immediate resistance is located at 1.3905 (21-DMA), a break above could take it near 1.3996 (21-DMA). On the downside, support is seen at 1.3781 (Mar. 8 Low), a break below targets 1.3711 (Mar. 1 Low). Against the euro, the pound was trading 0.1 percent down at 88.90 pence, having hit a low of 89.67 pence on Wednesday, it’s lowest since Nov. 28, 2017.

AUD/USD: The Australian dollar rose to a 2-week high as the greenback eased after data showed U.S. annual growth in average hourly earnings slowed to 2.6 percent after a spike in January. The Aussie trades 0.3 percent up at 0.7872, having hit a low of 0.7873 earlier; it’s highest since Feb. 26. FxWirePro's Hourly Aussie Strength Index stood at 100.25 (Highly Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7809 (5-DMA), a break below targets 0.7776 (Mar 9 Low). On the upside, resistance is located at 0.7901 (Feb. 21 High), a break above could take it near 0.7988.

NZD/USD: The New Zealand dollar rallied to a 2-week peak ahead of domestic fourth-quarter gross domestic product data due on Thursday, which is expected to show economic growth rose around 0.8 percent in the quarter and 3.2 percent for the year. The Kiwi trades 0.6 percent up at 0.7319, having touched a high of 0.7323 earlier, its highest level since Feb. 26. FxWirePro's Hourly Kiwi Strength Index was at -7.93 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7345 (Mar 1 High), a break above could take it near 0.7386 (Feb 21 High). On the downside, support is seen at 0.7268 (5-DMA), a break below could drag it below 0.7200.

Equities Recap

Asian shares advanced, extending gains for the third straight session, while the greenback eased from 1-week highs as strong U.S. jobs growth data was offset by slower increases in wages.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.1 percent.

Tokyo's Nikkei rallied 1.7 percent to 21,826.37 points, Australia's S&P/ASX 200 index surged 0.6 percent to 5,996.10 points and South Korea's KOSPI gained 0.9 percent to 2,483.39 points.

Shanghai composite index rose 0.6 percent to 3,327.87 points, while CSI300 index was trading 0.5 percent up at 4,128.98 points.

Hong Kong’s Hang Seng was trading 1.5 percent higher at 31,462.56 points. Taiwan shares added 1.3 percent to 11,002.10 points.

Commodities Recap

Crude oil prices steadied on the back of a drop in the number of U.S. rigs drilling for more production. International benchmark Brent crude was trading 0.05 percent up at $65.50 per barrel by 0435 GMT, having hit a low of $63.41 on Thursday, its lowest since Mar. 2. U.S. West Texas Intermediate was trading 0.1 percent down at $60.03 a barrel, after falling as low as $59.99 on Thursday, its weakest since Feb. 15.

Gold prices steadied after falling to a 1-week low in the previous session on data showing the U.S. economy added a larger-than-expected number of jobs in February. Spot gold was trading flat at $1,323.41 per ounce at 0440 GMT, having hit $1,312.70 an ounce on Friday, its lowest since Mar. 1. U.S. gold futures for April delivery fell 0.1 percent to $1,322.10 per ounce.

Treasuries Recap

The 10-year U.S Treasury yield stood at 2.906 percent higher by 0.013 bps, while 5-year yield was 0.011 bps up at 2.665 percent.

The Japanese government bonds traded nearly flat in subdued session as investors await the Bank of Japan’s (BoJ) January monetary policy meeting minutes scheduled for Tuesday. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, traded flat at 0.05 percent, the yield on the long-term 30-year note remained steady at 0.76 percent and the yield on short-term 2-year traded 1/2 basis point higher at -0.15 percent.

The Australian 2-year bid yields hit a near 3-week high at the start of the week Monday, following greater optimism among investors for a faster pace of interest rate hike this year. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, jumped 2 basis points to 2.82 percent, the yield on the long-term 30-year note also surged 2 basis points to 3.41 percent and the yield on short-term 2-year too traded 2 basis points higher at 2.04 percent.

The New Zealand government bonds plunged at the time of closing as investors’ risk appetite improved, tracking optimism over the U.S. economy, following promising number form the non-farm payroll sector. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, jumped 5-1/2 basis points to 3.02 percent, the yield on 20-year also climbed 5-1/2 basis points to 3.52 percent and the yield on short-term 2-year closed 3-1/2 basis points higher at 1.97 percent.


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