Asia Markets Update On February 14th, 2020

Asia Markets Update On February 14th, 2020

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antipodeans ease Amid virus scare, Euro near 3-year lows on weak growth outlook, investors eye Eurozone prelim GDP figures - Friday, February 14th, 2020

Market Roundup

  • Gold eases as equities edge up
  • Oil set for weekly gain on supply cut optimism
  • Euro declines on weak growth outlook

Economic Data Ahead

  • (0500 ET/1000 GMT) EZ Employment Change (YoY) (Q4) PREL
  • (0500 ET/1000 GMT) EZ Employment Change (QoQ) (Q4) PREL
  • (0500 ET/1000 GMT) EZ Trade Balance n.s.a. (Dec)
  • (0500 ET/1000 GMT) EZ Trade Balance s.a. (Dec)
  • (0500 ET/1000 GMT) EZ Gross Domestic Product s.a. (QoQ) (Q4) PREL
  • (0500 ET/1000 GMT) EZ Gross Domestic Product s.a. (YoY) (Q4) PREL

Key Events Ahead

  • No Significant Event Scheduled

FX Beat

DXY: The dollar index held firm near a 4-month peak as investors awaited U.S. retail sales and consumer confidence numbers due later on the day. The greenback against a basket of currencies traded flat at 99.10, having touched a high of 99.16 earlier, its highest since Oct. 7.

EUR/USD: The euro tumbled to a fresh near 3-year low as investors grew more pessimistic about the outlook in the eurozone before the release of gross domestic product data later in the day. The European currency traded 0.05 percent down at 1.0835, having touched a low of 1.0827 earlier, its lowest since May 2017. Investors’ attention will remain on a series of data from the Eurozone economies, EZ  prelim gross domestic data. ahead of the U.S. import and export index, retail sales, industrial production, capacity utilization and flash Michigan consumer sentiment index. Immediate resistance is located at 1.0896 (5-DMA), a break above targets 1.0924. On the downside, support is seen at 1.0819, a break below could drag it below 1.0803.

USD/JPY: The dollar slumped, extending previous session losses as renewed worries about the coronavirus outbreak supported the demand for safe-haven currencies. Officials in Hubei stunned financial markets on Thursday by announcing a sharp increase in new infections and deaths from the coronavirus. The major was trading 0.05 percent down at 109.76, having hit a high of 110.13 on Wednesday, its highest since Jan. 21. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. import and export index, retail sales, industrial production, capacity utilization and flash Michigan consumer sentiment index. Immediate resistance is located at 110.17, a break above targets 110.30. On the downside, support is seen at 109.54 (21-DMA), a break below could take it near at 109.35.

GBP/USD: Sterling surged, hovering towards a near 2-week peak hit in the previous session amid hopes that a British cabinet reshuffle will lead to more expansionary fiscal policy to support growth. The major traded 0.1 percent up at 1.3051, having hit a high of 1.3069 on Thursday, it’s highest since Feb. 3. Investors’ attention will remain on the trade negotiations, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3070, a break above could take it near 1.3105. On the downside, support is seen at 1.3042, a break below targets 1.2989. Against the euro, the pound was trading flat at 83.03 pence, having hit a high of 82.95 on Thursday, it’s highest since Dec.13.

AUD/USD: The Australian dollar consolidated within narrow ranges after a Reuters poll of economists stated that China’s economy will grow at its slowest rate since the financial crisis in the current quarter and  the downturn will be short-lived if the outbreak is contained. The Aussie trades flat at 0.6721, having hit a low of 0.6662 last week, it’s lowest since March 2009. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6682, a break below targets 0.6635. On the upside, resistance is located at 0.6750, a break above could take it near 0.6774.

NZD/USD: The New Zealand dollar eased amid expectations that the virus could hurt the global economy as well as the monetary policy. The Kiwi trades 0.05 percent down at 0.6430, having touched a low of 0.6378 on Tuesday, its lowest level since November 15. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6484, a break above could take it near 0.6503. On the downside, support is seen at 0.6381, a break below could drag it below 0.6358.

Equities Recap

  • Asian shares nudged up amid hopes governments will make provisions to soften the impact on their economies from the coronavirus epidemic.
  • MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3 percent.
  • Tokyo's Nikkei declined 0.6 percent to 23,687.59 points, Australia's S&P/ASX 200 index rallied 0.4 percent to 7,130.20 points and South Korea's KOSPI surged 0.6 percent to 2,245.13 points.
  • Shanghai composite index rose 0.1 percent to 2,910.84 points, while CSI 300 index traded 0.5 percent up at 3,978.39 points.
  • Hong Kong’s Hang Seng traded 0.3 percent higher at 27,823.50 points. Taiwan shares added 0.2 percent to 11,815.70 points

Commodities Recap

  • Crude oil prices eased but were set for their first weekly gain in six weeks on the assumption major producers will implement deeper output cuts to offset slowing demand in China. International benchmark Brent crude was trading 0.2 percent lower at $56.34 per barrel by 0533 GMT, having hit a low of $53.09 on Monday, its lowest since Jan 2019. U.S. West Texas Intermediate was trading 0.1 percent down at $51.44 a barrel, after falling as low as $49.46 on Monday, its lowest since Feb. 4.
  • Gold prices declined from an over 1-week peak as risk sentiment improved on hopes of global measures to soften the impact of the coronavirus outbreak. Spot gold was trading 0.05 percent lower at $1,575.23 per ounce by 0541 GMT, having touched a high of $1578.38 on Thursday, its highest since Feb. 4. U.S. gold futures also slipped 0.1 percent to $1,577.80.

Treasuries Recap

On Thursday, the two-year U.S. Treasury yield was down a basis point at 1.4317 percent in morning trading. The benchmark 10-year yield was down less than a basis point in morning trading at 1.619 percent.

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