• Asia roundup: Japanese Yen strengthens noticeably against U.S. Dollar, hits highest level since June, 2018; Asian markets down, Gold touches $1,287 Mark - Wednesday, January 02, 2019

    Source: FxWire Pro - Media Round Ups / 02 Jan 2019 02:13:29   America/New_York

    Market Roundup

    • Kim says ready to meet Trump 'anytime,' warns of 'new path'.
       
    • Trump invites congressional leaders to border security briefing.
       
    • China will never yield on core national interests - People's Daily.
       
    • China Dec Caixin manufacturing PMI Final, 49.7, 50.1 forecast, 50.2 previous.
       
    • Australia Nov AIG Manufacturing Index, 51.3, 58.3 previous.
       
    • Australian home prices mark worst year since 2008.

    Economic Data Ahead

    • (0350 ET/0850 GMT) France Dec Markit manufacturing PMI, 49.7 forecast, 49.7 previous.
       
    • (0355 ET/0855 GMT) Germany Dec Markit/BME manufacturing PMI 51.5 forecast, 51.5 previous.
       
    • (0400 ET/0900 GMT) Euro Zone Markit manufacturing Final PMI 51.4 forecast, 51.4 previous.
       
    • (0400 ET/0900 GMT) UK Markit/CIPS manufacturing PMI 52.5 forecast, 53.1 previous.

    Key Events Ahead

    • No major events are scheduled for the day.

    FX Recap

    USD: The dollar index, which tracks the greenback against a basket of major currencies, was marginally lower.

    EUR/USD: The euro was trading marginally higher and currently trading around $1.1475 mark. Traders expect the single currency to remain under pressure as both growth and inflation in the Euro zone remain below the European Central Bank's expectations. The euro lost 4.4 percent of its value versus the dollar in 2018. A consistent close below $1.1444 will drag the parity down towards key supports around $1.1350, $1.1185 and $1.1080 levels respectively. Alternatively, reversal from key support will drag the parity higher towards key resistances around $1.1472, $1.1550, $1.1620 and $1.1820 marks respectively.

    USD/JPY: The yen has strengthened for three straight weeks on investors' lower appetite for risk. The yen gained 0.3 percent against the dollar to 109.39 in Asian trade. Trading volumes remained light as global markets reopened after the New Year's Day holiday. Japanese markets remain closed on Wednesday. It made intraday high at 109.68 and low at 109.12 levels. A sustained close above 109.68 is required to take the parity higher towards key resistances around 110.48, 111.40, 112.60, 113.98, 114.55, 115.25 and 117.98 marks respectively. Alternatively, a daily close below 109.68 will drag the parity down towards key supports around 109.24, 108.72 and 107.90 marks respectively.

    GBP/USD: The sterling weakened by 0.15 percent to $1.2728. The British pound lost 5.5 percent versus the greenback last year due to Brexit woes. A sustained close below $1.2740 requires for dragging the parity down towards key supports around $1.2486 and $1.2150 mark. On the other side, key resistances are seen at $1.2815, $1.3047, $1.3187, $1.3215, $1.3362 and $1.3490 levels respectively.

    AUD/USD: The Australian dollar strengthened on Monday on expectations of progress in trade talks between China and the United States, although market sentiment remained fragile over looming concerns of slowing global growth and a partial U.S. government shutdown. The Australian dollar gained 0.3 percent to $0.7063. The fortunes of the Australian economy are closely tied to China, its largest trading partner. The pair made intraday high at $0.7044 and low at $0.7022 levels. Immediate support and resistance levels were seen at $0.7020 and $0.7303 mark respectively.

    NZD/USD: The kiwi dollar was last at $0.6713, hovering near a recent seven-week trough of $0.6693. It ended December down 2.5 percent after a solid 5.6 percent surge the previous month. For the full year, the kiwi stumbled 5.4 percent for its worst annual performance since 2015. Trading was light in New Zealand with domestic markets shut for the New Year's holiday.

    Equities Recap

    Australia’s S&P/ASX 200 was trading 1.50 pct lower at 5,557.40 points.

    Shanghai composite index to open up 0.2 pct at 2,497.88 points and China's CSI300 index to open up 0.2 pct at 3,017.07 points.

    Taiwanese stock was trading around 1.60 percent lower at 9,570.45 points.

    Hong Kong’s Hang seng was trading 2.80 pct lower at 25,126.25 points.

    South Korea’s Kospi was trading 1.52 percent lower at 2,009.55 points.

    India’s NSE Nifty was trading around 0.25 percent lower at 10,882.58 points while BSE Sensex was trading 0.17 points lower at 36,192.55 points.

    Commodities Recap

    Oil markets dropped by around 1 percent in 2019's first trading on Wednesday, pulled down by surging U.S. output and concerns about an economic slowdown in 2019 as factory activity in China, the world's biggest oil importer, contracted. International Brent crude futures for March were at $53.27 per barrel at 0421 GMT, down 53 cents, or 1 percent, from their final close of 2018. West Texas Intermediate (WTI) futures were at $45.01 per barrel, down 40 cents, or 0.9 percent. In physical oil markets, Dubai crude averaged $57.318 a barrel for December, the lowest since October 2017, two traders who participate in the market said on Wednesday.

    Gold prices edged lower on Wednesday as Asian equities won support on the first day of the New Year from gains in U.S. stock futures, pointing to an improvement in risk appetite. Spot gold XAU= fell 0.2 percent to $1,279.31 per ounce at 0120 GMT. The metal was not far off Monday's more than six-month high of $1,284.09. U.S. gold futures were little changed at $1,281 per ounce.

    Treasuries Recap

    The U.S. 10-year Treasury yield fell by around 35 basis points over December to 2.69 percent as bond traders bet that the Fed would not be able to raise rates in 2019 due to slowing economic momentum.

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