Asia Markets Update On January 9th, 2020

Asia Markets Update On January 9th, 2020

78 Views

Antipodeans steady, Japanese Yen near 2-week low after Trump signals no further action against Iran, Asian shares rally - Thursday, January 9th, 2020.

Market Roundup

  • Oil slides as Mideast conflict worries fade
  • Gold prices consolidate

Economic Data Ahead

  • (0200 ET/0700 GMT) German Trade Balance
  • (0200 ET/0700 GMT) German industrial production
  • (0500 ET/1000 GMT) EZ unemployment rate

Key Events Ahead

  • No significant events scheduled

FX Beat

DXY: The dollar index held firm near a 2-week peak as the yields on the benchmark 10-year U.S. Treasury note stood at 1.8598 percent, after dropping as low as 1.705 percent. The greenback against a basket of currencies traded flat at 97.28, having touched a high of 97.35 on Wednesday, its highest since Dec. 27.

EUR/USD: The euro rebounded from a near 2-week low after yesterday's data showed Eurozone economic sentiment improved in December, driven up by optimism in Italy and Spain. The European currency traded 0.1 percent up at 1.1114, having touched a low of 1.1102 earlier, its lowest since December 27. Investors’ attention will remain on a series of data from the eurozone economies, EZ unemployment rate and ECB Lane's speech ahead of the U.S. unemployment benefit claims and Fed Kashkari's speech. Immediate resistance is located at 1.1132 (21-DMA), a break above targets 1.1156. On the downside, support is seen at 1.1082, a break below could drag it below 1.1062.

USD/JPY: The dollar rallied to a 10-day peak as the United States and Iran backed away from the brink of further conflict in the Middle East. President Donald Trump said the United States did not necessarily have to respond militarily to Iran’s attack on military bases housing U.S. troops in Iraq. The major was trading 0.1 percent down at 109.20, having hit a high of 109.25 earlier, its highest since Dec. 27. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims and Fed Kashkari's speech. Immediate resistance is located at 109.44, a break above targets 109.63. On the downside, support is seen at 108.85 (10-DMA), a break below could take it near at 108.51 (5-DMA).

GBP/USD: Sterling steadied near the 1.3100 handle, as investors refocused their attention towards Brexit talks and European policymakers warned Britain could crash out of the European Union without a trade deal in place by the end of 2020. The major traded 0.1 up at 1.3107, having hit a low of 1.3053 on Friday, it’s lowest since Dec. 27. Investors’ attention will remain on the development surrounding Brexit deal, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3181, a break above could take it near 1.3229. On the downside, support is seen at 1.3053, a break below targets 1.3000. Against the euro, the pound was trading 0.05 percent up at 84.80 pence, having hit a high of 84.54 on Wednesday, it’s highest since Dec. 17.

AUD/USD: The Australian dollar consolidated near a 3-week low hit in the previous session, as the oil prices declined following a report showing a surprise build in U.S. stockpiles. The Aussie trades 0.1 percent up at 0.6870, having hit a low of 0.6849 on Wednesday, it’s lowest since Dec. 19. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6838, a break below targets 0.6813. On the upside, resistance is located at 0.6907 (21-DMA), a break above could take it near 0.6928.

NZD/USD: The New Zealand dollar held firm after falling to a 2-1/2 week low in the prior session, as an easing in tensions in the Middle East lessened one potential risk to the global economic outlook. The Kiwi trades flat at 0.6645, having touched a low of 0.6617 on Wednesday, its lowest level since Dec. 23. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6678 (10-DMA), a break above could take it near 0.6700. On the downside, support is seen at 0.6617, a break below could drag it below 0.6596.

Equities Recap

  • Asian shares rebounded as the United States and Iran backed away from the brink of further conflict in the Middle East.
  • MSCI's broadest index of Asia-Pacific shares outside Japan jumped 1.0 percent.
  • Tokyo's Nikkei rallied 2.2 percent to 23,707.76 points, Australia's S&P/ASX 200 index surged 0.8 percent to 6,874.20 points and South Korea's KOSPI advanced 1.2 percent to 2,177.14 points.
  • Shanghai composite index rose 0.6 percent to 3,085.72 points, while CSI 300 index traded 0.9 percent surged at 4,152.99 points.
  • Hong Kong’s Hang Seng traded 1.2 percent higher at 28,408.92 points. Taiwan shares added 1.2 percent to 11,961.89 points.

Commodities Recap

  • Crude oil prices nudged up after U.S. President Donald Trump said an Iranian missile strike on bases in Iraq had not harmed American troops and damage was minimal, showing Tehran wanted to de-escalate the Middle East standoff. International benchmark Brent crude was trading 0.05 percent higher at $65.89 per barrel by 0349 GMT, having hit a high of $71.31 on Wednesday, its highest since May 22. U.S. West Texas Intermediate was trading 0.2 percent up at $60.09 a barrel, after rising as high as $65.62 on Wednesday, its highest since April 25.
  • Gold prices steadied after retreating from the near 7-year peak hit in the previous session, as a softening rhetoric by the United States and Iran allayed concerns of a larger military conflict. Spot gold was trading 0.3 percent at $1,558.56 per ounce by 0354 GMT, having touched a high of $1611.27 on Wednesday, its highest since March 2013. U.S. gold futures fell 0.3 percent to $1,555.90.

Treasuries Recap

  • The Australian bonds slumped during Asian trading session tracking its U.S. counterpart after President Donald Trump confirmed that there have been no casualties from the Iranian attack on Iraq-based U.S. troops, making the scenario less dreadful than gauged. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped 4-1/2 basis points to 1.230 percent, the yield on the long-term 30-year bond also surged 4-1/2 basis points to 1.859 percent and the yield on short-term 2-year gained 2 basis points to 0.797 percent.
  • The Canadian government bond prices were lower across a steeper yield curve. The two-year fell 5.5 Canadian cents to yield 1.670 percent and the 10-year was down 42 Canadian cents to yield 1.630 percent.