• Asia roundup: antipodeans steady near recent peaks, Dollar eases on U.S. government shutdown, Asian shares decline - Monday, January 22nd, 2018

    Source: FxWire Pro - Media Round Ups / 22 Jan 2018 01:42:45   Eastern Standard Time

    Market Roundup

    • The government still shut down on Monday as U.S. Senate fails to clinch a deal.
       
    • Merkel readies for intense German coalition talks after tight SPD vote.
       
    • Japan Jan Reuters tankan manufacturing index +35, non-manufacturing +33, Dec +27, +34, Apr +35, +29.
       
    • Manufacturing mood at 11-year high, bodes well for March BOJ Tankan.
       
    • Japan fiscal target pushed back as government prioritizes social spending.
       
    • Japan retail investors pull out of bear fund as Nikkei hits 26-year peak.
       
    • Oil producers will cooperate beyond 2018, says Saudi Arabia.
       
    • South Africa's ANC to force Zuma to quit as president -reports.
       
    • Turkish forces push into Syria, battle Kurdish militia.
       

    Economic Data Ahead

    • No major economic data releases.

    Key Events Ahead

    • N/A ECB's President Mario Draghi and executive board member Benoit Coeure participate in a Eurogroup meeting in Brussels.

    • N/A Eurogroup finance ministers' meeting in Brussels.
       
    • N/A Bank of Japan monetary policy meeting in Tokyo (to Jan. 23).

    FX Beat

    DXY: The dollar index slumped as the U.S. Senate failed to pass a bill to approve a funding extension through February 16th, resulting in a U.S. government shutdown. The greenback against a basket of currencies traded 0.1 percent down at 90.55, having touched a low of 90.11 on Thursday, its lowest since January 2015. FxWirePro's Hourly Dollar Strength Index stood at 38.35 (Neutral) by 0500 GMT.

    EUR/USD: The euro rose after declining in the previous session on ECB comments that a strong currency would have a dampening effect on inflation and warranted monitoring. The European currency traded 0.1 percent up at 1.2223, having touched a high of 1.2322 on Wednesday, its highest since Dec. 2014. FxWirePro's Hourly Euro Strength Index stood at -58.65 (Bearish) by 0500 GMT. Investors’ attention will remain on Chicago Fed National Activity Index, amid a lack of significant economic data from Eurozone docket. Immediate resistance is located at 1.2300, a break above targets 1.2370. On the downside, support is seen at 1.2168 (61.8% retracement of 1.1916 and 1.2322), a break below could drag it lower 1.2120 (50.0% retracement).

    USD/JPY: The dollar tumbled for a third consecutive session as a U.S. government shutdown dented sentiment around the greenback.  The major was trading 0.1 percent down at 110.80, having hit a low of 110.19 on Wednesday, its lowest since Sept 15. FxWirePro's Hourly Yen Strength Index stood at 83.27 (Slightly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the Chicago Fed National Activity Index for further momentum. Immediate resistance is located at 111.41 (38.2% retracement of 110.19 and 113.38), a break above targets 111.78 (50.0% retracement). On the downside, support is seen at 110.32 (Jan. 15 Low), a break below could take it lower 110.00.

    GBP/USD: Sterling gained after easing from a 1-1/2 year high in the previous session on disappointing UK retail sales data that dented broadening optimism over the British currency. The major traded 0.1 percent up at 1.3860, having hit a high of 1.3945 on Friday, it’s highest since June 2016. FxWirePro's Hourly Sterling Strength Index stood at 93.66 (Slightly Bullish) by 0500 GMT. Investors’ focus will remain on the U.S. fundamental drivers, as the UK economic calendar remains absolutely data empty. Immediate resistance is located at 1.3900, a break above could take it near 1.3945. On the downside, support is seen at 1.3804 (Jan 18 Low), a break below targets 1.3757 (61.8% retracement of 1.3458 and 1.3941). Against the euro, the pound was trading 0.05 percent down at 88.18 pence, having hit a high of 88.01 pence on Thursday, it’s highest since Dec. 19

    AUD/USD: The Australian dollar steadied near a 4-month peak as its U.S. counterpart eased on uncertainty over the U.S. government shutdown. The Aussie trades 0.1 percent up at 0.7989, having hit a high of 0.8038 on Friday; it’s highest since Sept. 20. FxWirePro's Hourly Aussie Strength Index stood at 36.70 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7951 (61.8% retracement of 0.7807 and 0.8038), a break below targets 0.7924 (50.0% retracement). On the upside, resistance is located at 0.8050, a break above could take it near 0.8100.

    NZD/USD: The New Zealand dollar gained, reversing some of its previous session losses, as investors awaited the release of New Zealand inflation on Thursday, which is expected to post a 0.4 percent rise in consumer prices for the December quarter, leaving annual inflation at 1.9 percent. The Kiwi trades flat at 0.7276, having touched a high of 0.7331 on Wednesday, its highest level since Sept. 25. FxWirePro's Hourly Kiwi Strength Index was at 4.58 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7340, a break above could take it near 0.7390. On the downside, support is seen at 0.7248 (10-DMA), a break below could drag it lower 0.7182 (Jan 11 Low).

    Equities Recap

    Asian shares and the greenback against a basket of currencies tumbled after the U.S. government was forced to shut down amid a dispute between President Donald Trump and Democrats over immigration.

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

    Tokyo's Nikkei fell 0.2 percent to 23,767.44 points, Australia's S&P/ASX 200 index declined 0.2 percent to 5,991.90 points and South Korea's KOSPI eased 0.9 percent to 2,496.46 points.

    Shanghai composite index rose 0.1 percent to 3,490.21 points, while CSI300 index was trading 0.8 percent up at 4,317.54 points.

    Hong Kong’s Hang Seng was trading 0.3 percent higher at 32,351.65 points. Taiwan shares added 0.7 percent to 11,231.46 points.

    Commodities Recap

    Crude oil prices steadied, supported by comments from Saudi Arabia that cooperation between oil producers who are currently withholding supplies would continue beyond 2018. International benchmark Brent crude was trading 0.1 percent up at $68.80 per barrel by 0426 GMT, having hit a low of $68.26 the prior session, its lowest since Jan. 9. U.S. West Texas Intermediate was trading 0.1 percent up at $63.44 a barrel, after easing as low as $62.87 on Friday, its lowest since Jan. 9.

    Gold prices edged up amid a weaker dollar as investors sought safe haven assets after the U.S. government shutdown due to a funding deadlock. Spot gold traded flat at $1,331.60 an ounce by 0442 GMT, having declined 0.5 percent last week, its first weekly fall in six weeks. U.S. gold futures were up 0.1 percent at $1,333.80.

    Treasuries Recap

    The 10-year U.S Treasury yield stood at 2.648 percent higher by 0.009 bps, while 5-year yield was 0.008 bps up at 2.444 percent.

    The Australian bonds traded tad lower during early Asian session as investors have largely shrugged-off the impact of a government shutdown in the United States, following an indecisive agreement over the country’s tax reform. Investors believe that the uncertainty would be short-termed. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, dance around 2.85 percent, the yield on the long-term 30-year note slumped 1-1/2 basis points to 3.48 percent and the yield on short-term 2-year traded nearly flat at 2.12 percent.

    The Japanese government bonds remained little changed as investors await the Bank of Japan’s (BoJ) first monetary policy decision of 2018. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, traded flat at 0.078 percent, the yield on the long-term 30-year note fell 1/2 basis point to 0.828 percent and the yield on short-term 2-year remained steady at -0.134 percent.