News

Asia Roundup: Aussie plunges on mixed jobs data, dollar falls against yen as risk appetite ebbs, Asian shares slump – Thursday, June 13th, 2019

Market Roundup

  • Trump leaves China tariff deadline open, calls relationship 'testy'
     
  • Thousands of Hong Kong protesters gather, govt offices shut after violent protests
     
  • China's Vice Premier Liu calls for more measures to support economy
     
  • China economists expect interest rate, RRR cuts in coming weeks- China Daily
     
  • China is confident of keeping yuan basically stable – FX regulator
     
  • Trump considering sanctions over Russia's Nord Stream 2 natgas pipeline
     
  • Brexit delay gives some relief to UK housing market – RICS
     
  • Australia May Employment, 42.3k, 17.5k f'cast, 28.4k prev
     
  • Australia May Unemployment Rate, 5.2%, 5.1% f'cast, 5.2% prev
     
  • Australia May Participation Rate, 66.0%, 65.8% f'cast, 65.8% prev

Economic Data Ahead

  • (0500 ET/0900 GMT) EZ Apr Industrial Production YY, -0.5% f'cast, -0.6% prev

Key Events Ahead

  • N/A ECB's Mario Draghi, Benoit Coeure and euro zone finance ministers meet in Eurogroup meeting in Luxembourg
     
  • (0330 ET/0730 GMT) Swiss National Bank Monetary policy assessment with news conference in Bern
     
  • (0730 ET/1130 GMT) German Economy Minister Peter Altmaier speaks at podium discussion in Berlin
     
  • (0800 ET/1200 GMT) BoE's Alex Brazier speaks at University of Warwick in London
     

FX Beat

DXY: The dollar index eased on increasing expectations the U.S. Federal Reserve could cut interest rates in the next few months. The greenback against a basket of currencies traded 0.1 percent down at 96.90, having touched a low of 96.46 on Friday, its lowest since Mar. 25. FxWirePro's Hourly Dollar Strength Index stood at 129.84 (Highly Bullish) by 0500 GMT.

EUR/USD: The euro steadied after falling to a 5-day low in the previous session, as the recovery in Greece's housing market gained momentum in the first quarter. The European currency traded 0.1 percent up at 1.1297, having touched a high of 1.1347 on Friday, its highest since Mar. 22. FxWirePro's Hourly Euro Strength Index stood at 39.16 (Neutral) by 0500 GMT. Investors’ attention will remain on a series of data from the Eurozone economies and EZ industrial production, ahead of the U.S. unemployment benefit claims, and import and export price index. Immediate resistance is located at 1.1359 (Mar. 18 High), a break above targets 1.1402 (Feb. 16 High). On the downside, support is seen at 1.1263 (Mar. 26 Low), a break below could drag it below 1.1201 (May 14 Low).

USD/JPY: The dollar plunged to a 1-week low, amid mounting expectations that the Federal Reserve will ease monetary policy in coming months. Moreover, worries over U.S.-China trade war continued to dent investor risk appetite. The pair was trading 0.1 percent down at 108.34, having hit a high of 108.80 on Tuesday, its highest since May 31. FxWirePro's Hourly Yen Strength Index stood at 47.37 (Neutral) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims, and import and export price index. Immediate resistance is located at 108.87 (50.0% retracement of 109.92 and 107.81), a break above targets 109.47 (78.6% retracement). On the downside, support is seen at 107.88 (June 3 Low), a break below could take it lower at 107.51 (Jan. 4 Low).

GBP/USD: Sterling consolidated within narrow ranges, as investors remained cautious after British lawmakers defeated an attempt led by the opposition Labour Party to try to block a no-deal Brexit.  The major traded flat at 1.2691, having hit a high of 1.2763 on Friday; it’s highest since May 21. FxWirePro's Hourly Sterling Strength Index stood at 16.04 (Neutral) 0500 GMT. Investors’ attention will remain on the U.S. fundamental drivers, amid a lack of data from the UK docket. Immediate resistance is located at 1.2763 (June 7 High), a break above could take it near 1.2798 (May 17 High). On the downside, support is seen at 1.2647 (May 24 Low), a break below targets 1.2580 (May 30 Low). Against the euro, the pound was trading 0.1 percent down at 89.03 pence, having hit a low of 89.32 on Tuesday, it’s lowest since Jan. 15.

AUD/USD: The Australian dollar slumped to a 2-week low, as a mixed set of domestic jobs data supported the case of RBA rate cut as soon as July. The economy's May labour report showed unemployment stayed at 5.2 percent, against expectations for a dip back to 5.1 percent. The Aussie trades 0.2 percent down at 0.6912, having hit a high of 0.7022 on Friday, it’s highest since May 8. FxWirePro's Hourly Aussie Strength Index stood at -149.18 (Highly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6881 (May 24 Low), a break below targets 0.6867 (May 17 Low). On the upside, resistance is located at 0.6959 (May 14 High), a break above could take it near 0.7029 (May 2 High).

NZD/USD: The New Zealand dollar consolidated near a 10-day low, as investors wagered heavily that the Reserve Bank of New Zealand will have to move again following its May easing, though it is not seen cutting as deep as the RBA. The Kiwi trades flat at 0.6575, having touched a high of 0.6681 on Friday, its highest level April 30. FxWirePro's Hourly Kiwi Strength Index was at -108.08 (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 0.6619 (June 4 High), a break above could take it near 0.6681 (June 7 High). On the downside, support is seen at 0.6550 (May 15 Low), a break below could drag it below 0.6513 (May 17 Low).

Equities Recap

Asian shares declined as the Hong Kong market plunged for the second straight session following a day of massive street protests.

MSCI's broadest index of Asia-Pacific shares outside Japan eased 1.0 percent.

Tokyo's Nikkei declined 0.5 percent to 21,032.00 points, Australia's S&P/ASX 200 index plunged 0.05 percent to 6,542.40 points and South Korea's KOSPI slumped 0.2 percent to 2,103.59 points.

Shanghai composite index gained 0.05 percent to 2,910.59 points, while CSI 300 index traded 0.1 percent up at 3,688.80 points.

Hong Kong’s Hang Seng traded 0.8 percent lower at 27,101.99 points. Taiwan shares shed 0.5 percent to 10,561.01 points

Commodities Recap

Crude oil prices surged by more than 1 percent after falling to a 1-week low in the previous session on continued increases in U.S. crude stockpiles and concerns about lower demand growth. International benchmark Brent crude was trading 1.2 percent higher at $60.52 per barrel by 0501 GMT, having hit a low of $59.55 on Wednesday, its lowest since June 5. U.S. West Texas Intermediate was trading 0.6 percent up at $51.36 a barrel, after falling as low as $50.71 on Wednesday, its lowest since the June 5.

Gold prices advanced, extending previous session gains as demand for the safe-haven assets rose on expectations of an interest rate cut by the U.S. Federal Reserve following soft inflation data, and on escalating trade tensions between U.S. and China. Spot gold was 0.1 percent up at $1,334.96 per ounce by 0505 GMT, having touched a low of $1,319.79 on Monday, its lowest since June 3. U.S. gold futures were 0.3 percent higher at $1,340.10 an ounce.

Treasuries Recap

The Japanese government bonds ended steady amid a silent Asian trading session. At close, the yield on the benchmark 10-year JGB note hovered around -0.113 percent, the yield on the long-term 30-year slightly slipped to 0.343 percent and the yield on short-term 2-year remained nearly stable at -0.197 percent.

The Australian three-year bond futures firmed 2.5 ticks to 98.985, while the 10-year contract rose 1.75 ticks to 98.5775.

The New Zealand bonds rose, with yields on two-year paper matching record lows at 1.235 percent.

The Canadian government bond prices were higher across a steeper yield curve. The two-year rose 5.5 Canadian cents to yield 1.449 percent and the 10-year climbed 26 Canadian cents to yield 1.500 percent. On Tuesday, the 10-year yield touched its highest intraday in 11 days at 1.543 percent.


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