Asia Markets Update On January 17th, 2020

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Asia Markets Update On January 17th, 2020

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Japanese Yen at 7-1/2 month low as risk sentiment improves; Aussie consolidates despite upbeat Chinese data, Asian shares surge - Friday, January 17th, 2020.

Market Roundup

  • Gold set for worst week in two months
  • Chinese economy grew at 6.0%

Economic Data Ahead

  • (0400 ET/0900 GMT) Italy Trade Balance
  • (0400 ET/0900 GMT) EZ Current Account n.s.a
  • (0400 ET/0900 GMT) EZ Current Account s.a
  • (0430 ET/0930 GMT) UK retail sales YoY
  • (0430 ET/0930 GMT) UK retail sales MoM
  • (0430 ET/0930 GMT) UK retail sales ex- Fuel YoY
  • (0430 ET/0930 GMT) UK retail sales ex- Fuel MoM
  • (0500 ET/1000 GMT) Italy consumer price index
  • (0500 ET/1000 GMT) EZ consumer price index
  • (0500 ET/1000 GMT) EZ construction output

Key Events Ahead

  • No significant events scheduled

FX Beat

DXY: The dollar index nudged higher after multiple data releases yesterday portrayed a positive U.S. economic picture, indicating the economy maintained a moderate growth pace at the end of 2019. The greenback against a basket of currencies traded flat at 97.31, having touched a low of 97.09 on Thursday, its lowest since Jan. 8.

EUR/USD: The euro consolidated within narrow ranges after easing from a 1-1/2 week peak hit in the previous session as the greenback surged on upbeat U.S. retail sales and jobs data. The European currency traded flat at 1.1137, having touched a high of 1.1163 on Wednesday, its highest since January 8. Investors’ attention will remain on series of data from the Eurozone economies, EZ current account, construction output and consumer price index, ahead of the U.S. building permits, housing starts, JOLTS job openings, industrial production, capacity utilization and Fed officials' speech. Immediate resistance is located at 1.1174, a break above targets 1.1197. On the downside, support is seen at 1.1118, a break below could drag it below 1.1102.

USD/JPY: The dollar rallied to a 7-1/2 month peak, as the signing of an initial U.S.-China trade deal and encouraging U.S. economic data boosted investor sentiment. Data released yesterday showed U.S. retail sales rose for a third straight month in December and the number of Americans filing claims for unemployment benefits declined for a fifth straight week last week. The major was trading 0.05 percent up at 110.21, having hit a high of 110.29 earlier, its highest since May 23. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. building permits, housing starts, JOLTS job openings, industrial production, capacity utilization and Fed officials' speech. Immediate resistance is located at 110.67, a break above targets 110.95. On the downside, support is seen at 109.89 (5-DMA), a break below could take it near at 109.63.

GBP/USD: Sterling eased, halting a 3-day rally amid growing speculation that the Bank of England will cut interest rates later this month. The major traded lower at 1.3063, having hit a low of 1.2954 on Tuesday, it’s lowest since Dec. 24. Investors’ attention will remain on the development surrounding Brexit deal, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3097, a break above could take it near 1.3169. On the downside, support is seen at 1.3035, a break below targets 1.3012. Against the euro, the pound was trading flat at 85.15 pence, having hit a low of 85.95 on Tuesday, it’s lowest since Nov. 22.

AUD/USD: The Australian dollar consolidated below the 0.6900 handle despite upbeat Chinese economic data. The Chinese economy grew at 6.0 percent as widely expected, while retail sales and industrial output surpassed forecasts in sign's Beijing's policy stimulus might gain some traction now a trade truce is in place. The Aussie trades flat at 0.6897, having hit a high of 0.6933 on Thursday, it’s highest since Jan. 7. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6868, a break below targets 0.6838. On the upside, resistance is located at 0.6936, a break above could take it near 0.6957.

NZD/USD: The New Zealand dollar surged, extending gains for the third straight session, as domestic data this week showing resurgent home prices and an upbeat survey on inflation eased expectations of rate cuts. The Kiwi trades 0.1 percent up at 0.6642, having touched a low of 0.6583 on Wednesday, its lowest level since Dec. 19. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6672, a break above could take it near 0.6701. On the downside, support is seen at 0.6617, a break below could drag it below 0.6587.

Equities Recap

  • Asian shares surged as China’s economic growth matched expectations in spite of U.S. trade pressures.
  • MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.1 percent.
  • Tokyo's Nikkei rallied 0.5 percent to 24,041.26 points, Australia's S&P/ASX 200 index surged 0.3 percent to 7,064.10 points and South Korea's KOSPI gained 0.2 percent to 2,252.72 points.
  • Shanghai composite index rose 0.2 percent to 3,079.44 points, while CSI 300 index traded 0.3 percent up at 4,159.42 points.
  • Hong Kong’s Hang Seng traded 0.05 percent lower at 28,871.63 points. Taiwan shares added 0.2 percent to 12,090.29 points.

Commodities Recap

  • Crude oil prices declined as reports of sluggish economic growth in China raised concerns about future fuel demand and offset optimism from the signing of the U.S.-China trade deal earlier in the week. International benchmark Brent crude was trading 0.2 percent lower at $64.59 per barrel by 0526 GMT, having hit a low of $63.54 on Wednesday, its lowest since Dec. 11. U.S. West Texas Intermediate was trading 0.1 percent down at $58.49 a barrel, after falling as low as $57.40 on Wednesday, its lowest since Dec. 4.
  • Gold prices surged but were on track to post its worst week in two months, as positive U.S. economic data and optimism over an interim U.S.-China trade deal boosted appetite for riskier assets. Spot gold rose 0.2 percent to $1,556.23 per ounce by 0530 GMT, having touched a low of $1536.01 on Tuesday, its lowest since Jan. 3 and have declined 0.7 percent so far for the week, it’s lowest since the week ended Nov. 8. U.S. gold futures was flat at $1,550.80.

Treasuries Recap

The Australian bonds remained flat during Asian session of the last trading day of the week as investors remained side-lined in a muted session that witnessed data of little economic significance amid overall positive sentiments in the market. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, hovered around 1.186 percent, the yield on the long-term 30-year bond remained flat at 1.796 percent and the yield on short-term 2-year lost barely 1 basis point to trade at 0.780 percent

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