• Asia roundup: antipodeans near multi-year lows as U.S. tariffs on Chinese goods takes effect this weekend, greenback gains as trade tensions ease, Asian shares at 1-week peak - Friday, August 30th, 2019

    Source: FxWire Pro - Media Round Ups / 01 Sep 2019 03:32:55   America/New_York

    Market Roundup

    • Greenback near 4-week high 
       
    • Oil set for biggest weekly gain since July
       
    • Gold prices inch down on positive signs for trade talks
       
    • Euro eases on ECB stimulus hope

    Economic Data Ahead

    • (0400 ET/0800 GMT) Italy Unemployment July
       
    • (0430 ET/0830 GMT) UK net lending to individuals MoM July
       
    • (0430 ET/0830 GMT) UK consumer credit July
       
    • (0430 ET/0830 GMT) UK mortgage approvals July
       
    • (0430 ET/0830 GMT) UK M4 money supply MoM July
       
    • (0430 ET/0830 GMT) UK M4 money supply YoY July
       
    • (0500 ET/0900 GMT) Italy prelim consumer price index MoM August
       
    • (0500 ET/0900 GMT) Italy prelim consumer price index YoY August
       
    • (0500 ET/0900 GMT) EZ unemployment rate July
       
    • (0500 ET/0900 GMT) EZ consumer price index YoY August
       
    • (0500 ET/0900 GMT) EZ consumer price index- Core YoY August
       
    • (0600 ET/1000 GMT) Italy gross domestic product YoY Q2
       
    • (0600 ET/1000 GMT) Italy gross domestic product QoQ Q2
       

    Key Events Ahead

    • No significant events scheduled

    FX Beat

    DXY: The dollar index rallied to a 1-month peak as news Washington and Beijing were discussing negotiations in September eased anxieties about the ongoing trade war. The greenback against a basket of currencies traded 0.1 percent up at 98.56, having touched a high of 98.57 earlier, its highest since August 1.

    EUR/USD: The euro plunged to a 1-month low, weighed down by a sluggish eurozone economy and likely monetary easing from the European Central Bank next month. Data released yesterday showed, German inflation slowed in August and unemployment rose, adding to signs that the German economy is running out of steam and cementing expectations of a new ECB stimulus package next month. The European currency traded 0.1 percent down at 1.1045, having touched a low of 1.1142 earlier, its lowest since August 1.  Investors’ attention will remain on Eurozone preliminary consumer price index, ahead of the U.S. personal consumption expenditure - price index. Immediate resistance is located at 1.1071 (23.6% retracement of 1.1163 and 1.1042), a break above targets 1.1102 (50% retracement). On the downside, support is seen at 1.1030, a break below could drag it below 1.1000.

    USD/JPY: The dollar declined, halting a 2-day rally, on reports that the U.S. economy slowed slightly more than expected in the second quarter, despite the strongest growth in consumer spending in 4-1/2 years. The major was trading 0.2 percent down at 106.34, having hit a low of 104.44 on Monday, its lowest since November 2016. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. personal consumption expenditure - price index. Immediate resistance is located at 106.73 (August 23 High), a break above targets 107.09 (August 6 High). On the downside, support is seen at 105.65 (August 28 Low), a break below could take it lower at 105.26 (August 9 Low).

    GBP/USD: Sterling steadied after falling for two straight sessions, as British Prime Minister Boris Johnson suspended parliament for more than a month to avoid a possible no-confidence vote and take Britain out of the European Union on the Oct. 31 deadline. The major traded flat at 1.2184, having hit a high of 1.2309 on Tuesday, it’s highest since July 29. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2234 (5-DMA), a break above could take it near 1.2273 (August 22 High). On the downside, support is seen at 1.2148 (21-DMA), a break below targets 1.2108 (August 22 Low). Against the euro, the pound was trading 0.2 percent down at 90.62 pence, having hit a high of 90.16 on Tuesday, it’s highest since July 29.

    AUD/USD: The Australian dollar slumped, extending losses for the fourth consecutive session, as Washington is due to start imposing 15 percent tariffs on $125billion worth of goods from China on Sunday, affecting a number of consumer items. The Aussie trades 0.2 percent down at 0.6713, having hit a low of 0.6689 on Monday, it’s lowest since August 7. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6677 (August 7 Low), a break below targets 0.6630. On the upside, resistance is located at 0.6799 (August 2 1 High), a break above could take it near 0.6822 (August 8 High).

    NZD/USD: The New Zealand dollar tumbled to fresh 4-year low as investors fear the intensifying trade dispute could lead the U.S. economy into a recession. The Kiwi trades 0.2 percent down at 0.6296, having touched a low of 0.6289 earlier, its lowest level September 2015. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6357 (5-DMA), a break above could take it near 0.6409 (August 23 Low). On the downside, support is seen at 0.6270, a break below could drag it below 0.6240.

    Equities Recap

    Asian shares rallied to a 1-week high as the United States and China returned to the negotiating table to resolve their tariff dispute.

    MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.1 percent

    Tokyo's Nikkei surged 1.2 percent to 20,704.37 points, Australia's S&P/ASX 200 index rallied 1.5 percent to 6,604.20 points and South Korea's KOSPI rose 1.8 percent to 1,967.59 points.

    Shanghai composite index fell 0.2 percent to 2,885.96 points, while CSI 300 index traded 0.2 percent up at 3,797.91 points.

    Hong Kong’s Hang Seng traded 0.3 percent lower at 25,620.39 points. Taiwan shares added 1.5 percent to 10,618.05 points.

    Commodities Recap

    Crude oil prices declined but were set for their biggest weekly gains since early July, boosted by a fall in U.S inventories and a looming hurricane in Florida. International benchmark Brent crude was trading 0.7 percent lower at $60.49 per barrel by 0559 GMT, having hit a low of $58.29 last week, its lowest since August 16. U.S. West Texas Intermediate was trading 0.3 percent down at $56.43 a barrel, after falling as low as $52.95 on Monday, its lowest since August 9.

    Gold prices eased and were on track for a small weekly loss as United States and China indicated they may resume talks to resolve their protracted trade conflict. Spot gold fell 0.2 percent to $1,525.06 per ounce by 0602 GMT, having touched a high of $1,555.10 on Monday, its highest since August 2013 but is heading for a mild loss of 0.1 percent, following four weeks of gains. U.S. gold futures were also down 0.2 percent at $1,534.50 an ounce.

    Treasuries Recap

    The Japanese government bond yields pulled back from three-year lows as investor appetite for risk assets returned. The five-year JGB yield nudged up half a basis point to minus 0.355 percent, moving away from a three-year trough of minus 0.365 percent hit midweek. The benchmark 10-year JGB yield was 1 basis point higher at minus 0.280 percent, after stooping to minus 0.290 percent the previous day, its lowest since July 2016.

    The Australian government bonds suffered during Asian session tracking a similar movement in the U.S. Treasuries after a 7-year auction failed to draw sufficient investor demand amid signs of easing trade tensions between the U.S. and China. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, edged 1-1/2 basis points higher to 0.889 percent, the yield on the long-term 30-year bond rose 1 basis point to 1.479 percent while the yield on short-term 2-year remained flat at 0.724 percent.

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