Asia Roundup: Antipodeans Head for Weekly Losses, Dollar steady After Hitting 17-Month Low Vs Yen - Asian Shares Extend Losses
- Japan FinMin Aso – Current FX moves one-sided, rapid moves undesirable, will take necessary steps vs FX moves as needed.
- MoF official – Recent FX market showing speculative moves – Jiji.
- EconMin Ishihara – FX moves rough, yen rise not on fundamentals.
- ChiefCabSec Suga – FX one-sided, excessive, will act as needed.
- MoF March flow data – Japanese buy net Y585.2 bln foreign stocks, Y5.2098 trln bonds, sell Y329.1 bln bills; foeign investors sell net Y2.0169 trln Japanese stocks, Y1.6557 trln bonds, buy Y120.6 bln bills.
- Japan Feb c/a surplus Y2.43 trln, Y2.01 trln forecast, crude oil price slide brought trade balance into surplus, surplus largest since March ‘15.
- Foreign CB US debt holdings -$2.876 bln to $3.257 trln April 6 week, Treasury holdings -$3.833 bln to $2.942 trln, agencies +$680 mln to $266.566 bln.
- FOMC Chair Yellen – US still on track for more rate hikes.
- KC Fed George warns that delays on rate hikes could end badly.
- NY Fed – Swaps w/foreign CBs $146 mln Apr 6 week, BoJ $101 mln, ECB $45 mln.
- SF Fed Williams – Can support at least two more rate hikes this year – Fox.
- Lipper – Investors show fresh appetite for stocks, bond funds.
- Reuters poll – Analysts tone down bearish forecasts for AUD, NZD.
Economic Data Ahead
- (0315 ET/0715 GMT) Switzerland Mar CPI, +0.3% m/m, -0.9% y/y forecast; last +0.2%, -0.8%.
- (0430 ET/0830 GMT) Great Britain Feb ind production, +0.1% m/m, unch y/y forecast; last +0.3%, +0.2%.
- (0430 ET/0830 GMT) Great Britain Feb mfg production, -0.2% m/m, -0.7% y/y forecast; last +0.7%, -0.1%.
- (0430 ET/0830 GMT) Great Britain Feb trade bal, GBP10.2 bln deficit forecast; last GBP10.29 bln deficit.
- (0430 ET/0830 GMT) Great Britain Feb - non-EU, GBP 2.6 bln deficit forecast; last GBP 2.2 bln deficit.
- (1000 ET/1400 GMT) United States Feb wholesale inventories, -0.1% m/m forecast; last +0.2%.
- (1000 ET/1400 GMT) United States Feb wholesale sales, unch m/m forecast; last -1.7%.
Key Events Ahead
- N/A BoS Gov Linde speech in Madrid.
- N/A UK DMO GBP0.5/1.5/2.0 bln 1/3/6-month treasury bill auctions.
- N/A Canada Summit in Toronto, FinMin Morneau, ex-BoC Dodge speak.
- (0830 ET/1230 GMT) NY Fed Dudley speech in Bridgeport, CN/15:15 at Bridgeport event.
- (0915 ET/1315 GMT) ECB/Austria CB Nowotny in Vienna panel discussion.
USD: The dollar steadied but was close to 17-month lows against the yen, with the Japanese currency headed for weekly gains against its major counterparts. Against a basket of currencies, the dollar index was up about 0.1 percent at 94.584.
EUR/USD: The euro edged 0.1 percent lower around 1.1361,after rising as high as 1.1454 on Thursday, its highest since October. The pair dropped to a low of 1.1337, before edging up to close out at 1.1376 in the previous session. The greenback was supported by Federal Reserve Chair Janet Yellen speech, as she reminded investors that U.S. interest rate are likely to be raised this year. Later in the day, Eurozone economies will release their Industrial Output data and Trade Balance figures. Immediate support is located at 1.1349 (10-DMA), while resistance is seen at 1.1431 (Apr 6 High). The euro added about 0.3 percent against the yen to 123.47 yen but was poised to shed around 2.9 percent for the week.
USD/JPY: The Japanese yen lost about 0.5 percent to 108.80 yen after advancing as high as 107.68 on Thursday, its highest since October 2014. However, it was still on track to gain 2.7 percent for the week. The recovery in the dollar remains unperturbed by upbeat Japanese current account data, which was at JPY 2.43 trillion in February from JPY 520.8 billion in January. Markets focus will remain on the Fed speeches and sentiment around oil and stock markets, amid a lack of economic releases. Immediate resistance is located at 108.98 (Session High), break above could take the pair 109.64 (5-DMA), while support is seen at 107.68 (Previous Session Low).
AUD/USD: The Australian dollar edged up at 0.7546, having slipped 1.2 percent in the previous session and pulling away from a 9-month peak of 0.7722 touched last week. The overnight recovery in the Aussie gained traction after the yen buying halted, providing relief to the yen crosses, further strengthening the AUD bulls. Immediate resistance is located at 0.7557 (5-DMA), while support is seen at 0.7491 (Previous Session Low). The Aussie nursed losses against its Japanese counterpart as global growth worries resurfaced, putting it on track for heavy weekly falls. It dropped 2.6 percent on Thursday and was trading at 82.15 yen.
NZD/USD: The New Zealand dollar trades flat at 0.6780, slightly down after touching a peak of 0.6862 in the previous day. It has lost 1.7 percent this week. The Kiwi nears session lows as the risk-off amoung the investors overshadow the optimism driven by the oil price rebound. The pair will continue to track market sentiment, in absence of significant U.S. economic data in the day ahead. Immediate resistance is located at 0.6803 (5-DMA), while support is seen at 0.6762 (Previous Session Low). The kiwi dropped 2 percent to a 7-month trough in the last session to be last at 75.85 yen. It has skidded more than 4 percent so far this week.
USD/CNY: The yuan eased against the dollar despite China reporting its first rise in foreign exchange reserves since November. The central bank set the midpoint rate at 6.4733 per dollar prior to market open, 0.04 percent weaker than the previous fix 6.4707. The spot yuan opened at 6.4771 per dollar and was trading at 6.4772 at midday, weakening 0.07 percent from the previous late session close. While the offshore yuan was trading 0.17 percent softer than the onshore spot at 6.4882 per dollar.
Asian shares extended losses to 3-week lows after bank stocks slumped globally, while the yen soared to a 17-month high against the dollar.
Tokyo's Nikkei closed up 0.46 pct at 15,821.52. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.2 percent, heading for a weekly drop of 1.5 percent.
Chinese stocks retreated, with Shanghai Composite index down 0.7 percent, while CSI 300 lost 0.6 percent, and set for a 1 percent weekly decline. Hong Kong's Hang Seng declined 0.4 percent and was headed for a 1.5-percent loss for the week.
Australia's S&P/ASX 200 index slumped 0.59 pct at 4,934.80 points, with Seoul shares also edged down 0.13 pct, while Taiwan stocks gained 0.6 pct at 8,541.50 points
Oil prices edged up, lifted by firm economic indicators from the United States and Germany which could support fuel demand. Front month U.S. West Texas Intermediate crude futures were trading at $40.05 per barrel at 0627 GMT. International Brent futures were up 24 cents at $39.67 a barrel.
Gold eased from a 2-week high, reversing back some of its sharp overnight gains, however on track to post its strongest week in five on the Fed's caution over raising U.S. interest rates and risk-off sentiment in the market. Spot gold eased 0.3 percent to $1,236.90 an ounce by 0628 GMT on profit taking after its 1.5 percent gain overnight.
The 10-year U.S. treasury yield stood at 1.713 percent versus previous close of 1.689 percent.
Japanese government bonds firmed, taking cue from strong U.S. Treasuries overnight and underpinned by the Bank of Japan's buying operations. The benchmark 10-year yield slipped 2.5 basis points to minus 0.085 percent. In the superlong zone, the 30-year JGB yield earlier rose to as high as 0.440 percent as investors locked in gains, but late in the session it was down half a basis point at 0.415 percent. June 10-year JGB futures ended up 0.27 point at 151.65.
Australian government bond futures rose, with the three-year bond contract up 4 ticks at 98.210. The 10-year contract rose 5 ticks to 97.6000, while the 20-year contract added 6 ticks to 97.0200. New Zealand government bonds gained, sending yields 2 basis points lower at the short end of the curve and 5 basis points lower at the long end of the curve.
Canadian government bond prices were higher across the maturity curve, with the benchmark 10-year up 43 Canadian cents to yield 1.167 percent, while the price of the 2-year rising 3.5 Canadian cents to yield 0.529 percent.
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