• Asia roundup: antipodeans rally as Crude Oil soars to record highs, Dollar index steadies near 5-month peak as u.s.-china trade war fears ebb, Asian shares ease amid holiday thinned-trading - Tuesday, may 22nd, 2018 

    Source: FxWire Pro - Media Round Ups / 22 May 2018 03:09:37   America/New_York

    Market Roundup

    • Trade war fears ebb as U.S., China agree to continue talks
       
    • U.S., China nearing deal to remove U.S. sales ban against ZTE -sources
       
    • With N.Korea summit on shaky ground, Trump to press S. Korean leader
       
    • Foreign media head to N. Korea in sign nuclear shutdown will go ahead
       
    • Kuroda says BOJ will signal exit plan if inflation picks up
       
    • BOJ Kuroda says major c.banks cautious of issuing digital currencies
       
    • German economy in strong upswing despite Q1 slowdown -finance ministry

    Economic Data Ahead

    • (0430 ET/0830 GMT) Great Britain Apr PSNB Ex Banks GBP, f'cast 8.600 bln, last 1.348 bln
       
    • (0430 ET/0830 GMT) Great Britain Apr PSNB, GBP, f'cast 7.100 bln, last -0.262 bln
       
    • (0600 ET/1000 GMT) Great Britain May CBI Trends - Orders, f'cast 2, last 4
       

    Key Events Ahead

    • N/A BoE's Carney, Ramsden and member of the Monetary Policy Committee Gertjan Vlieghe & Michael Saunders will appear at Treasury Select Committee hearing on the May Inflation Report.

    N/A Indonesia 3/5/7/10/20-year Samurais via Daiwa, Mizuho, Nomura, SMBC Nikko

    FX Beat

    DXY: The dollar index steadied after rising to multi-month highs in the prior session, boosted by upbeat U.S. economic data that has backed the Federal Reserve's monetary policy tightening stance this year. The greenback against a basket of currencies trades 0.1 percent up at 93.62, having touched a high of 94.06 earlier, its highest since Dec. 13. FxWirePro's Hourly Dollar Strength Index stood at 31.84 (Neutral) by 0500 GMT.

    EUR/USD: The euro eased after rebounding from a 5-month low in the previous session, amid Italian political uncertainty as latest reports suggested Italy is close to forming a populist government. The European currency traded 0.1 percent down at 1.1775, having touched a low of 1.1716 the day before, its lowest since Dec. 21. FxWirePro's Hourly Euro Strength Index stood at -81.81 (Slightly Bearish) by 0500 GMT. Investors’ attention will remain on the Richmond Fed Manufacturing Index, amid a lack of economic data from the Eurozone docket. Immediate resistance is located at 1.1849 (10-DMA), a break above targets 1.1938 (May 15 High). On the downside, support is seen at 1.1717 (Dec. 12 Low), a break below could drag it till 1.1700.

    USD/JPY: The dollar fell below the 110.00 handle after rising to a 5-month peak the prior day following a pull-back in U.S. 10-year Treasury yields from 7-year highs set last week. The major was trading 0.1 percent down at 110.95, having hit a high of 111.39 on Monday, its highest since Jan. 18.  FxWirePro's Hourly Yen Strength Index stood at -54.69 (Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the Richmond Fed Manufacturing Index. Immediate resistance is located at 111.48 (Jan. 18 High), a break above targets 111.87 (Jan. 11 High). On the downside, support is seen at 110.65 (5-DMA), a break below could take it lower 110.05 (10-DMA).

    GBP/USD: Sterling consolidated near 5-month lows hit in the previous session, as investors prepared for data this week that could determine whether the Bank of England might tighten monetary policy as early as August. Moreover, continued concerns over Northern Ireland borders, UK sovereignty, and the EU customs union undermined the bid tone around the British pound. The major traded flat at 1.3421, having hit a low of 1.3391 on Monday, it’s lowest since Dec. 27. FxWirePro's Hourly Sterling Strength Index stood at -114.99 (Highly Bearish) by 0500 GMT.  Investors’ focus will remain on the BoE MPC member Vileghe speech, UK inflation report hearing and CBI industrial trends survey-orders, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3508 (10-DMA), a break above could take it near 1.3569. On the downside, support is seen at 1.3346, a break below targets 1.3301. Against the euro, the pound was trading 0.05 percent down at 87.75 pence, having hit a high of 87.12 pence on Thursday, it’s highest since Apr. 27.

    AUD/USD: The Australian dollar rose to a near 1-month high as oil prices surged to their highest since 2014 after Venezuela's presidential election heightened worries that the country's oil output could drop further. Investors now await the Reserve Bank of Australia chief Philip Lowe's speech at the Australia-China Relations Institute in Sydney, where he will be discussing China's economy and financial markets, and its relationship with Australia. The Aussie trades 0.1 percent up at 0.7583, having hit a high of 0.7592 earlier; it’s highest since Apr. 25. FxWirePro's Hourly Aussie Strength Index stood at 73.66 (Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7531 (Apr. 27 Low), a break below targets 0.7472 (May 1 Low). On the upside, resistance is located at 0.7520 (May 24 High), a break above could take it near 0.7682 (Apr. 23 High).

    NZD/USD: The New Zealand dollar surged to a 1-week peak as easing U.S.- China trade war worries boosted investor risk sentiment. Moreover, a pullback in the U.S. Treasury yields also supported the Kiwi bulls. The major trades 0.2 percent up at 0.6957, having touched a high of 0.6959 earlier, its highest level since May 14. FxWirePro's Hourly Kiwi Strength Index was at 128.13 (Highly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6974, a break above could take it near 0.7030. On the downside, support is seen at 0.6835, a break below could drag it below 0.6805.

    Equities Recap

    Asian shares eased amid holiday thinned-trading with South Korea and Hong Kong markets closed, while the dollar steadied near recent highs, supported by rising U.S. bond yields and easing U.S.-China trade tensions.

    MSCI's broadest index of Asia-Pacific shares outside Japan edged down in early trade.

    Tokyo's Nikkei plunged 0.1 percent to 22,970.54 points, Australia's S&P/ASX 200 index eased 0.7 percent to 6,041.90 points and Taiwan shares shed 0.3 percent to 10,938.73 points.

    Shanghai composite index fell 0.5 percent to 3,199.14 points, while CSI300 index was trading 0.8 percent down at 3,890.67 points.

    Commodities Recap

    Crude oil prices eased after gaining in the previous session on concerns that Venezuela's crude output could decline further following a disputed presidential election and potential U.S. sanctions on the OPEC-member. International benchmark Brent crude was trading 0.2 percent down at $79.35 per barrel by 0500 GMT, having hit a high of $80.47 on Thursday, its highest since Nov. 2014. U.S. West Texas Intermediate was trading 0.05 percent up at $72.51 a barrel, after rising as high as $72.28 on Thursday, its highest since Nov. 2014.

    Gold prices declined, hovering towards a 2018 low touched in the previous session as a firm dollar near 5-month highs and optimism in global markets dented appetite for the safe-haven metal. Spot gold eased 0.3 percent to $1,288.97 per ounce as of 0504 GMT, having hit a low of $1,281.99 on Monday, its lowest price level since Dec. 27. U.S. gold futures for June delivery were 0.1 percent lower at $1,290.10 per ounce.

    Treasuries Recap

    The 10-year U.S Treasury yield stood at 3.061 percent lower by 0.002 bps, while 5-year yield was 0.004 bps up at 2.901 percent.

    The Australian government bonds rallied as investors do not expect any hint on interest rate hike from the Reserve Bank of Australia (RBA) Governor Philip Lowe in his May 23 speech. Following dovish sentiment, the 10-year bond yield hits lowest in 1-week. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, fell 2-1/2 basis points to 2.868 percent, the yield on the long-term 30-year Note dipped 3 basis points to 3.355 percent and the yield on short-term 2-year down 1/2 basis point to 2.037 percent.

    The New Zealand bonds ended Tuesday’s session on a higher note as investors hope to see a worse deterioration in the country’s trade balance data, scheduled to be released on May 23 by 22:45GMT amid an otherwise, silent trading week. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, slid 1/2 basis point to 2.84 percent, the yield on the long-term 20-year note also fell 1/2 basis point to 3.38 percent and the yield on short-term 2-year closed 1 basis point lower at 1.86 percent.

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