• Asia roundup: Yen tumbles Amid growing stimulus hopes, investors eye developments surrounding U.S.-China trade deal, Oil rallies after Saudi oilfield attack - Monday, August 19th, 2019

    Source: FxWire Pro - Media Round Ups / 19 Aug 2019 03:51:26   America/New_York

    Market Roundup

    • Yen falls as stimulus hopes grow
       
    • Oil prices rise after Saudi oilfield attack
       
    • Gold prices ease on firmer dollar, equities
       

    Economic Data Ahead

    • (0400 ET/0800 GMT) EZ Current Account n.s.a (June)
       
    • (0400 ET/0800 GMT) EZ Current Account s.a (June)
       
    • (0400 ET/0800 GMT) EZ consumer price index- core YoY July
       
    • (0400 ET/0800 GMT) EZ consumer price index- core MoM July
       
    • (0400 ET/0800 GMT) EZ consumer price index YoY July
       
    • (0400 ET/0800 GMT) EZ consumer price index MoM July
       

    Key Events Ahead

    • No significant event scheduled

    FX Beat

    DXY: The dollar index held firm near a 2-week peak as U.S. Treasury yields bounced back from recent lows in the wake of German stimulus hopes. The 10-year U.S. Treasury yield stood at 1.575 percent, having pulled away from a three-year trough of 1.475 percent recorded last week. The greenback against a basket of currencies traded flat at 98.20, having touched a high of 98.34 on Friday, its highest since August 2.

    EUR/USD: The euro steadied after falling to a 2-week low in the previous session following a report that Germany’s coalition government was prepared to set aside its balanced budget rule in order to take on new debt and launch stimulus steps to counter a possible recession. The European currency traded flat at 1.1090, having touched a low of 1.1066 on Friday, its lowest since August 1. Investors’ attention will remain on Eurozone current account and consumer price index, amid a lack of economic data from the U.S. docket. Immediate resistance is located at 1.1129 (38.2% retracement of 1.1230 and 1.1066), a break above targets 1.1168 (61.8% retracement). On the downside, support is seen at 1.1060 (July 31 Low), a break below could drag it below 1.1026 (August 1 Low).

    USD/JPY: The dollar rose, extending gains for the third straight session, as expectations policymakers would unleash new stimulus eased immediate concerns about a slowing global economy. Investors await to see if the U.S. government offers some concessions to Huawei, which could make a resolution to the trade war more likely. The major was trading 0.05 percent up at 106.38, having hit a low of 105.05 last week, its lowest since Jan 3. Investors’ will continue to track the broad-based market sentiment, as U.S. economic data calendar remains absolutely empty. Immediate resistance is located at 107.14 (21-DMA), a break above targets 107.73 (June 21 High). On the downside, support is seen at 105.89 (August 8 Low), a break below could take it lower at 105.29 (Aug. 9 Low).

    GBP/USD: Sterling surged, hovering towards a 1-week peak hit in the previous session, boosted by last week's better-than-expected retail sales and news that Britain’s opposition Labour Party had begun its bid to bring down Prime Minister Boris Johnson with a vote of no confidence. The major traded 0.2 percent up at 1.2172, having hit a low of 1.2014 last week, it’s lowest since Jan. 2017. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2210 (38.2% retracement of 1.2522 and 1.2079), a break above could take it near 1.2331 (61.8% retracement). On the downside, support is seen at 1.2100 (10-DMA), a break below targets 1.2041 (August 13, Low). Against the euro, the pound was trading 0.1 percent up at 91.17 pence, having hit a high of 90.90 on Friday, it’s lowest since July 31.

    AUDUSD: The Australian dollar consolidated within the narrow ranges despite the recovery in the Australian government benchmark bond yield. The upside is likely being capped by the U.S.-China trade tensions. The Aussie trades 0.1 percent up at 0.6783, having hit a low of 0.6677 earlier in the month, it’s lowest since March 2009. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6735 August 13 Low), a break below targets 0.6700. On the upside, resistance is located at 6831 (38.2% retracement of 0.7082 and 0.6677), a break above could take it near 0.6879 (50% retracement).

    NZD/USD: The New Zealand dollar plunged to a near 2-week low, amid immense uncertainty surrounding the U.S.-China trade deal.  The Kiwi trades flat at 0.6423, having touched a low of 0.6410 earlier, its lowest level August 7. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6534 (38.2% retracement of 0.6790 and 0.6376), a break above could take it near 0.6583 (50% retracement). On the downside, support is seen at 0.6400, a break below could drag it below 0.6365.

    Equities Recap

    Asian shares surged as hopes of more stimulus from global central banks and steps being taken by major economies eased investors’ fears of a sharp economic downturn.

    MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3 percent.

    Tokyo's Nikkei surged 0.7 percent to 20,563.16 points, Australia's S&P/ASX 200 index rallied 0.9 percent to 6,467.40 points and South Korea's KOSPI gained 0.7 percent to 1,939.90 points.

    Shanghai composite index rose 2.1 percent to 2,883.10 points, while CSI 300 index traded 2.2 percent up at 3,791.09 points.

    Hong Kong’s Hang Seng traded 2.3 percent higher at 26,318.80 points. Taiwan shares added 0.7 percent to 10,488.75 points.

    Commodities Recap

    Crude oil prices surged following a weekend attack on a Saudi oil facility by Yemeni separatists and as markets looked for signs that could ease U.S.-China trade tensions. International benchmark Brent crude was trading 1.3 percent higher at $59.83 per barrel by 0546 GMT, having hit a high of $61.48 on Tuesday, its highest since August 5. U.S. West Texas Intermediate was trading 1.2 percent up at $55.42 a barrel, after rising as high as $57.43 on Tuesday, its highest since August 1.

    Gold prices declined, extending previous session losses, due to a stronger greenback and a recovery in equities, as major central banks around the world hinted at more stimulus, easing fears about a sharp economic downturn. Spot gold was trading 0.3 percent down at $1,507.03 per ounce at 0549 GMT, having touched a high of $1,527.90 on Friday, its highest since August 13. U.S. gold futures also fell 0.3 percent to $1,518.70 an ounce.

    Treasuries Recap

    The Japanese government bonds remained mixed at the time of closing after the country’s trade balance for the month of July shrunk into deficit as investors still eye the national consumer price inflation (CPI) for the similar period, scheduled to be released by end of this week, for further direction in the debt market. At close, the yield on the benchmark 10-year JGB note, which moves inversely to its price, plunged 23 basis points to -0.229 percent, the yield on the long-term 30-year jumped nearly 3 basis points to 0.213 percent and the yield on short-term 2-year slumped 28 basis points to -0.283 percent.

    The Australian government bonds slumped in subdued Asian session of the first trading day of the week ahead of the Reserve Bank of Australia’s (RBA) August monetary policy meeting minutes, scheduled to be released on August 20 by 01:30GMT. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped 4 basis points to 0.924 percent, the yield on the long-term 30-year bond surged nearly 6 basis points to 1.504 percent and the yield on short-term 2-year traded nearly 2 basis points up at 0.753 percent.

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