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Asia Roundup: Japanese yen reverses previous loss after lower than expected GDP data release, Asian markets mixed, gold hovers around key support at $1,287 mark - Thursday, June 08, 2017

Market Roundup

  • UK PM May's lead widens to 7 pts, Conservatives 42%, Labour 35%.
     
  • China's May exports y/y, 8.7% vs forecast 7.0%, last 8.0%.
     
  • China's May imports y/y, 14.8% vs forecast 8.5%, last 11.9%.
     
  • China's May trade balance, $40.81 bln vs forecast $46.32 bln, last $38.05 bln.

  • BOJ’s Iwata – Hard to issue scenarios on exit strategy now.
     
  • Japan’s Q1 GDP rev 0.3% q/q, 1.0% AR, 0.6%, 2.4% eyed, prelim 0.5%, 2.2%.
     
  • Japan April current account surplus Y1.9519 tln, Y1.6988 tln eyed, Mar Y2.9077 tln.
     
  • Japan May outstanding bank loans +3.2% y/y, ex-shinkin +3.3%, rise pace up.
     
  • Japan to require regional banks to contain bond holding risk.
     
  • ECB to keep taps open as economic outlook uncertain.
     
  • UK May RICS house price bal +17, lowest since Aug ’16, Apr +22.

  • Australia April trade balance (A$), 555 mln vs f'cast 1950 mln, last 3107 mln.

Economic Data Ahead

  • (0315 ET/0715 GMT) Switzerland May CPI, +0.3% y/y, +0.1% m/m; last +0.4%, +0.2%.
     
  • (0500 ET/0900 GMT) EZ GDP Q1 Revised, +0.5% q/q, +1.7% y/y eyed; last +0.5%, +1.7%.
     
  • (0745 ET/1145 GMT) EZ ECB Jun Deposit Rate, -0.4% eyed; last -0.4%.
     
  • (0745 ET/1145 MGT) EZ ECB Jun Refinancing Rate, +0.0% eyed; last +0.0%.

Key Events Ahead

  • N/A G20 leaders meet for International summit in Hamburg.
     
  • N/A Riksbank's Skingsley speaks at the SABO financial conference.
     
  • (0930 ET/1330 GMT) ECB press conference with Mario Draghi.

FX Recap

USD: The dollar index, which tracks the greenback against six major rivals, held steady at 96.774.

EUR/USD: The euro held steady on Thursday ahead of the European Central Bank's policy announcement, while sterling was supported by expectations that Prime Minister Theresa May's party will win a majority in Britain's election. The common currency was fetching $1.1251, having regained some footing after slipping to as low as $1.1204 on Wednesday, pressured by reports suggesting the ECB would lower its inflation targets. Pair made intraday high at 1.1268 and low at 1.1247 marks. Immediate support was seen 1.1205 and resistance was seen at 1.1324 marks.

USD/JPY: The yen showed little reaction to reports of missile launches by North Korea. Against the yen, the dollar edged up 0.1 percent to 109.94 yen, having pulled up from Wednesday's low of 109.115 yen, the greenback's weakest level since April 21. Pair made intraday high at 110.01 and low at 109.38 levels.  A sustained close above 110.52 is required to take the parity higher towards 113.12, 115.37 and 117.42 marks. Alternatively, a daily close below 109.11 will drag the parity down towards 108.13 levels. Japan’s Q1 GDP revised q/q decrease to 0.3 % (forecast 0.6 %) vs previous 0.5 %.

GBP/USD:  The sterling held steady at $1.2961, trading near Wednesday's peak of $1.2970, its highest level since May 25. The pound gained 0.4 percent on Wednesday, with investors increasingly taking the view that May's party will win a majority in the election on Thursday.

AUD/USD: The Australian dollar came off a six-week peak on Thursday after the country's trade surplus for April shrank far more than expected, while its New Zealand counterpart rose to a three-month high. The Australian dollar slipped as low as $0.7522 at one stage, off from a $0.7568 top touched on Wednesday, before steadying at $0.7541. The Aussie's recent uptrend remained intact, with gains of 1.4 percent this month. That compares with drops in March, April and May.

NZD/USD: The New Zealand dollar rose to $0.7212, from $0.7169 the previous day, a windfall from a weaker U.S. dollar and a strong domestic economy. The currency faces technical resistance in the $0.7237/46 zone.

Equities Recap

Japan’s Nikkei was trading 0.09 pct lower at 19,967.50 points.

Hong Kong’s Hang seng was trading 0.16 percent higher at 26,016.00 points.

Australia’s S&P ASX200 was trading 0.11 percent higher at 5,673.50 points.

Shanghai composite index to open down 0.1 pct at 3,136.47 points and China's CSI300 index to open down 0.1 pct at 3,531.24 points.

South Korea’s Kospi was trading 0.09 pct lower at 2,357.01 points.

Taiwan’s market was trading 0.05 percent higher at 10,215.40 points.

India’s NSE Nifty was trading around 0.12 percent lower at 9,652.55 points and BSE Sensex was trading at 0.14 percent lower at 31,226.77 points.

Commodities Recap

Crude futures edged up in early Asian trading on Thursday following heavy losses in the previous session after official data showed that U.S. inventories rose for the first time in 10 weeks, reawakening concerns of a supply glut. U.S. crude futures were up 24 cents, or 0.5 percent, at $45.96 a barrel at 0300 GMT. On Wednesday, they closed down 5.1 percent or $2.47 a barrel, to the lowest settlement since May 4. Brent crude prices rose 29 cents, or 0.6 percent, to $48.35 a barrel, after falling 4.1 percent in the previous session, also to the lowest since May 4.

Gold edged lower early Thursday after a written testimony by former FBI director James Comey ahead of his Congressional appearance was seen containing few fireworks, as investors also braced up for the UK national elections and a policy meeting of the European Central Bank later in the day. Spot gold was down 0.1 percent, to $1,285.20 per ounce at 0105 GMT. U.S. gold futures for August delivery dipped 0.4 percent to $1,288.1 an ounce.

Treasuries Recap

New Zealand government bonds eased, sending yields 2 basis points higher.

Australian government bond futures slipped, with the three-year bond contract down 1 tick at 98.26 and the 10-year contract off 3 ticks to 97.56.

 

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