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Asia roundup: Aussie eases as business conditions weaken, greenback gains as U.S. treasury yields rebound, Asian shares advance on Mexico relief - Tuesday, June 11th, 2019

Source FxWire Pro - Media Round Ups Tuesday, 11 Jun, 2019 06:57:55 GMT

Market Roundup

  • Trump ready to slap more tariffs on China after G20 meeting
  • U.S. House Democrats to get more Mueller evidence, Trump calls witness 'sleazebag'
  • China to boost funding support for projects as economy slows
  • China central bank to issue bills in Hong Kong to stabilise weakening yuan
  • British candidates for PM take aim at favourite Johnson
  • BoE's Saunders says UK rates may need to rise before markets expect
  • Australia May NAB Business Confidence, 7, 0 prev
  • Australia May NAB Business Conditions, 1, 3 prev
  • New Zealand Q1 Manufacturing Sales, 2.0%, 2.0% prev

Economic Data Ahead

  • (0430 ET/0830 GMT) EZ Jun Sentix Index, 2.9 f'cast, 5.3 prev
  • (0430 ET/0830 GMT) Great Britain Apr Employment Change, 10k f'cast, 99k prev
  • (0430 ET/0830 GMT) Great Britain Apr Avg Wk Earnings 3M YY, 3.0% f'cast, 3.2% prev
  • (0430 ET/0830 GMT) Great Britain Apr Claimant Count Unemployment Change, 22.9k f'cast, 24.7k prev

Key Events Ahead

  • (0330 ET/0730 GMT) BoE Monetary Policy Committee member Gertjan Vlieghe speaks at launch of a book on labour market in London
  • (0400 ET/0800 GMT) Finland Central Bank Governor Olli Rehn speaks about euro zone monetary policy in Helsinki
  • (0700 ET/1100 GMT) Slovakia central bank Governor Peter Kazimir holds news conference in Bratislava

FX Beat

DXY: The dollar index steadied, having rebounded from 10-1/2 week lows, as the U.S.-Mexico trade and migration deal boosted broader market sentiment, sending U.S. government bond yields higher overnight. The greenback against a basket of currencies traded flat at 96.77, having touched a low of 96.46 on Friday, its lowest since Mar. 25. FxWirePro's Hourly Dollar Strength Index stood at 49.06 (Neutral) by 0500 GMT.

EUR/USD: The euro steadied near the 1.1300 handle, but remained under pressure after two sources familiar with the European Central Bank's policy discussions said that the central bank was open to cut interest rate if the bloc's economy stagnates again. The European currency traded 0.05 percent up at 1.1314, having touched a high of 1.1347 on Friday, its highest since Mar. 22. FxWirePro's Hourly Euro Strength Index stood at 73.57 (Bullish) by 0500 GMT. Investors’ attention will remain on Eurozone Sentix investor confidence index, ahead of the U.S. producer price index. Immediate resistance is located at 1.1359 (Mar. 18 High), a break above targets 1.1402 (Feb. 16 High). On the downside, support is seen at 1.1263 (Mar. 26 Low), a break below could drag it below 1.1201 (May 14 Low).

USD/JPY: The dollar surged, halting a 3-day losing streak, as investors' risk appetite ticked up after the United States shelved plans to impose tariffs on Mexico. However, fresh U.S. trade threats against China limited the upside. The major was trading 0.1 percent up at 108.57, having hit a high of 108.71 on Monday, its highest since May 31. FxWirePro's Hourly Yen Strength Index stood at -49.50 (Neutral) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. producer price index. Immediate resistance is located at 108.87 (50.0% retracement of 109.92 and 107.81), a break above targets 109.47 (78.6% retracement). On the downside, support is seen at 107.88 (June 3 Low), a break below could take it lower at 107.51 (Jan. 4 Low).

GBP/USD: Sterling eased, extending previous session losses, after data released on Monday showed Britain's economy contracted sharply after the biggest decline in car production since records began, amid growing concerns over Britain's expected departure from the European Union. The major traded 0.05 percent down at 1.2679, having hit a high of 1.2763 on Friday; it’s highest since May 21. FxWirePro's Hourly Sterling Strength Index stood at -15.67 (Neutral) 0500 GMT. Investors’ attention will remain on UK labour market data, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2763 (June 7 High), a break above could take it near 1.2798 (May 17 High). On the downside, support is seen at 1.2647 (May 24 Low), a break below targets 1.2580 (May 30 Low). Against the euro, the pound was trading 0.1 percent down at 89.24 pence, having hit a low of 89.29 on Monday, it’s lowest since Jan. 15.

AUD/USD: The Australian dollar plunged to a 1-week low after domestic data showed business conditions slipped in May as sales and profits struggled. The National Australia Bank's index of business conditions eased 2 points to +1 in May, leaving it well below the long-run average. The Aussie trades 0.1 percent down at 0.6952, having hit a high of 0.7022 on Friday, it’s highest since May 8. FxWirePro's Hourly Aussie Strength Index stood at -158.96 (Highly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6914 (May 15 Low), a break below targets 0.6881 (May 24 Low). On the upside, resistance is located at 0.7029 (May 2 High), a break above could take it near 0.7061 (May 1 High).

NZD/USD: The New Zealand dollar declined to a 1-week trough, as the greenback bounced back after the U.S. 10-year Treasury bond yields hit their highest since May 31. The Kiwi trades 0.2 percent lower at 0.6595, having touched a high of 0.6681 on Friday, its highest level April 30. FxWirePro's Hourly Kiwi Strength Index was at -157.22 (Highly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6694 (Apr. 19 High), a break above could take it near 0.6729 (Apr. 18 High). On the downside, support is seen at 0.6562 (May 14 Low), a break below could drag it below 0.6513 (May 17 Low).

Equities Recap

Asian shares surged, boosted by gains in the Chinese shares, as the U.S. decision to hold off from imposing import tariffs on Mexico revived investor risk sentiment.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.7 percent.

Tokyo's Nikkei rallied 0.3 percent to 20,776.39 points, Australia's S&P/ASX 200 index surged 1.6 percent to 6,546.30 points and South Korea's KOSPI gained 0.7 percent to 2,113.46 points.

Shanghai composite index rose 2.4 percent to 2,921.07 points, while CSI 300 index traded 2.9 percent up at 3,713.31 points.

Hong Kong’s Hang Seng traded 0.9 percent higher at 27,837.50 points. Taiwan shares added 0.4 percent to 10,607.76 points

Commodities Recap

Crude oil prices surged on expectations that producer cartel OPEC and its allies will keep withholding supply to prevent prices from tumbling. International benchmark Brent crude was trading 0.1 percent higher at $62.43 per barrel by 0458 GMT, having hit a high of $63.81 on Monday, its highest since May 31. U.S. West Texas Intermediate was trading 0.3 percent up at $53.59 a barrel, after rising as high as $54.80 on Monday, its highest since the May 31.

Gold prices steadied after posting its biggest 1-day percentage fall in two months in the previous session, as Washington's trade threats against China offset investor optimism spurred by a U.S.-Mexico deal. Spot gold was 0.1 percent up at $1,328.93 per ounce by 0502 GMT, having touched a high of $1,348.13 on Friday, its highest since April 19. U.S. gold futures rose 0.2 percent to $1,332.30 an ounce.

Treasuries Recap

The Japanese government bond prices dipped, with the benchmark 10-year JGB yield rising one basis point to minus 0.115 percent. The 20-year yield also gained one basis point to 0.245 percent, while the 30-year yield was up half a basis point at 0.355 percent. The two-year yield advanced half a basis point to minus 0.195 percent and the five-year yield up 1.5 basis points at minus 0.220 percent. 

The Australian government bond futures were lower, with the three-year bond contract easing 2.5 ticks to 98.920, while the 10-year contract slipped 3 ticks to 98.5100.

The New Zealand government bonds were little changed.

The Canadian government bond prices were lower across the yield curve, with 10-year falling 50 Canadian cents to yield 1.514 percent. On, Monday, the 10-year yield touched its highest intraday since May 31 at 1.537 percent.

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