• Asia roundup: Kiwi rallies to 4-month peak as RBNZ increases bank capital requirements, greenback eases on soft U.S. services report, investors eye OPEC meetings - Thursday, December 5th, 2019

    Source: FxWire Pro - Media Round Ups / 05 Dec 2019 02:16:54   America/New_York

    Market Roundup

    • Australia to trim government as PM demands policy delivery
       
    • Sterling jumps above $1.31 to 7-month high
       
    • Gold gains on mixed U.S.-China trade signals
       
    • Oil steadies as investors await OPEC meetings
       
    • RBNZ increases bank capital requirements
       

    Economic Data Ahead

    • (0500 ET/1000 GMT) EZ employment change
       
    • (0500 ET/1000 GMT) EZ retail sales
       
    • (0500 ET/1000 GMT) EZ gross domestic product
       

    Key Events Ahead

    • (0400 ET/0900 GMT) OPEC meeting

    FX Beat

    DXY: The dollar index eased, hovering towards a 1-month trough recorded in the prior session, weighed down by weaker-than-expected U.S. services report. The greenback against a basket of currencies traded flat at 97.58, having touched a low of 97.43 on Wednesday, its lowest since November 4.

    EUR/USD: The euro rose after easing from a 1-month peak hit in the previous session on data that showed Eurozone business activity weakened last month, with manufacturing continuing to act as a drag on the bloc’s services industry as well as the economy. The European currency traded 0.05 percent up at 1.1084, having touched a high of 1.1116 on Wednesday, its highest since November 7. Investors’ attention will remain on EZ retail sales, employment change and gross domestic product, ahead of the U.S. unemployment benefit claims, trade balance, factory orders and Fed Quarles speech. Immediate resistance is located at 1.1097, a break above targets 1.1123. On the downside, support is seen at 1.1052 (5-DMA), a break below could drag it below 1.1037 (10-DMA).

    USD/JPY: The dollar declined against the Japanese yen as weaker-than-expected U.S. private-sector jobs data and a soft services report fueled worries about a slowdown in the U.S. economy. On Wednesday, a survey showed that U.S. private-sector hiring in November unexpectedly slowed to its weakest pace in six months, while U.S. ISM's non-manufacturing index fell to 53.9 in November from 54.7 the previous month. The major was trading 0.1 percent down at 108.78, having hit a low of 108.42 on Wednesday, its lowest since Nov 21. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims, trade balance, factory orders and Fed Quarles speech. Immediate resistance is located at 109.09 (5-DMA), a break above targets 109.29. On the downside, support is seen at 108.65, a break below could take it near at 108.48.

    GBP/USD: Sterling held firm near a 7-month peak hit above the 1.3100 handle in the previous session, boosted by growing expectations that Britain will avoid a hung parliament after next week’s election. The major traded up at 1.3110, having hit a high of 1.3120 on Wednesday, it’s highest since May 7. Investors’ attention will remain on the development surrounding the general elections, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3132, a break above could take it near 1.3176. On the downside, support is seen at 1.3080, a break below targets 1.3039. Against the euro, the pound was trading flat at 84.52 pence, having hit a high of 84.49 earlier, it’s highest since May 2017.

    AUD/USD: The Australian dollar plunged after Prime Minister Scott Morrison said Australia will cut the number of government departments next year to focus on the continuity of policy and improving service.  The Aussie trades 0.1 percent down at 0.6839, having hit a high of 0.6862 on Tuesday, it’s highest since November 11. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6803, a break below targets 0.6782. On the upside, resistance is located at 0.6865, a break above could take it near 0.6882.

    NZD/USD: The New Zealand dollar rallied to a 4-month high after the Reserve Bank of New Zealand increased capital ratio requirements for banks, but not as much as some investors had expected. The RBNZ said the big four banks operating in the country would have to raise their total capital 18 percent from a minimum of 10.5 percent now, and 16 percent for smaller banks. The Kiwi trades 0.1 percent up at 0.6533, having touched a high of 0.6562 earlier, its highest level since August 6. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6577, a break above could take it near 0.6592. On the downside, support is seen at 0.6503, a break below could drag it below 0.6477 (5-DMA).

    Equities Recap

    Asian shares advanced on the possibility that China and the United States may soon seal a phase one deal to end their 17-month trade war.

    MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.5 percent.

    Tokyo's Nikkei rallied 0.7 percent to 23,300.09 points, Australia's S&P/ASX 200 index surged 1.2 percent to 6,683.00 points and South Korea's KOSPI fell 0.3 percent to 2,061.79 points.

    Shanghai composite index rose 0.7 percent to 2,897.14 points, while CSI 300 index traded 0.7 percent up at 3,876.08 points.

    Hong Kong’s Hang Seng traded 0.5 percent higher at 26,190.74 points. Taiwan shares added 0.7 percent to 11,594.65 points

    Commodities Recap

    Crude oil prices eased after rising by more than 3 percent in the previous session, as investors turned cautious ahead of the start of OPEC meetings later in the day. International benchmark Brent crude was trading 0.2 percent down at $62.88 per barrel by 0529 GMT, having hit a low of $60.29 on Tuesday, its lowest since November 20. U.S. West Texas Intermediate was trading 0.2 percent down at $58.20 a barrel, after rising as high as $58.64 on Thursday, its highest since November 27.

    Gold prices surged, hovering towards a 1-month peak hit in the prior session as conflicting signals from Washington and Beijing prolonged the uncertainty about a trade deal. Spot gold was trading 0.2 percent up at $1,477.55 per ounce by 0533 GMT, having touched a high of $1483.97 on Wednesday, its highest since Nov. 7. U.S. gold futures was flat at $1,480.50.

    Treasuries Recap

    The long-dated Japanese government bond yields declined, but a rise in shorter yields on improving risk sentiment helped flatten the yield curve. The 30-year JGB yield fell 1 basis point to 0.420 percent, while the 40-year JGB yield fell 1.5 basis points to 0.445 percent. The benchmark 10-year JGB futures price was down 0.05 point at 152.68 by late trading. The 10-year cash JGB yield was up 0.5 basis point at minus 0.035 percent. The five-year yield rose 1 basis point to minus 0.140 percent and the two-year JGB yield edged up 1 basis point to minus 0.150 percent, matching a seven-month high touched on Tuesday.

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