Market Roundup
- Australia ANZ Roy Morgan Weekly Consumer Confidence Index at 116.3 from 115.4
- CSRC: Unrealistic to see mass shareholding cut after Jan 8
- PBoC Injects Yuan 130bn worth of short term funds
- USDCNY fixed at 6.5169 - lower than expected by market
- Shanghai Composite opened 3.1% lower before quickly recovering to be up 0.5%
- Traders said PBOC intervening to support onshore Yuan via state-owned banks
- Most Asian stock markets recovered early losses as China fears calmed
- AXJ currencies rallied with equity markets
- (0355 ET/0855 GMT) German unemployment
- (0430 ET/0930 GMT) United Kingdom Construction PMI
- (0500 ET/1000 GMT) Eurozone Inflation Flash - 0.3% expected Y/Y
No Major Events Scheduled
FX Beat
USD: The yen's rally against the dollar stalled on Tuesday after the slide in China's share markets halted. Against a basket of major currencies, the dollar was flat at 98.872.
EUR/USD: The euro is currently trading low at 1.0829 levels, after going as low as 1.0814 levels. It has drifted away from a 1-month trough of 1.0781 touched on Monday as flight-to-quality pushed down Treasury yields and weighed on the dollar. The pair is moving within a thin range of 1.0838 - 1.0814. Immediate support is located at 1.0804 (Dec 18 Low), break below could drag the pair to further losses to 1.0796 (Dec 7 Low). On the upside, strong resistance can be seen at 1.0910, a break above will take the pair towards next resistance level at 1.0945.
USD/JPY: The dollar regained some ground on the yen to stand at 119.40, after going as low as 118.70 on Monday. The greenback hit an 11-week low of 118.70 on Monday as equities worldwide dropped sharply on weak economic indicators that rekindled global growth concerns. Recent strength seen in the yen appears short-lived on the back of the divergent monetary policy outlooks between the Fed and BOJ. Currently the pair trades flat at 119.39 levels, after having touched sessions low of 119.09. On the downside, immediate support is seen at 119.01 (61.8 % Fib retracement of 116.08 to 123.75 rise), while 120 (5-DMA) is resistance on the upside ahead of 120.38 (10-DMA).
AUD/USD: The Australian dollar was up 0.2 percent at $0.7205, after being knocked down 1.3 percent on Monday. While PBoC weakened the Yuan further, the Aussie extends recovery as risk-on trades return to markets. The pair currently trades at 0.7200 levels, having touched sessions high of 0.7214 levels and low of 0.7173 levels. Immediate resistance is located at 0.7225 (15 - DMA) and breal above could take the pair to 0.7265 (10- DMA). On the downside, support is seen at 0.7160 (Dec 15 Low), break below could drag the pair to 0.7155 (Previous Day Low).
NZD/USD: The New Zealand dollar was flat at 0.6733 after an overnight fall of 1.1 percent. The kiwi continues to slide, as it nears fresh session lows of 0.6728. It fails to take cue from the amid ongoing recovery in the oil prices. Currently the pair trades at 0.6734 levels and is moving within a thin range of 0.6757 - 0.6728. On the downside, immediate support is located at 0.6719 (Previous day Low), while on the upside resistance is seen at 0.6785 (15 - DMA).
USD/CNY: China's onshore yuan was firm against the dollar on Tuesday after the central bank set the midpoint rate at 6.5169 per dollar, weaker than the previous fix of 6.5032. In the spot market, the yuan was trading at 6.5198 near midday, 140 pips stronger than the previous close. In the offshore market, the yuan hit 6.6446 in early trade, the lowest in more than 4 years. It traded 1.71 percent weaker than the onshore spot at 6.6335 per dollar near midday.
Equities Recap
Asian share markets struggled to stabilise on Tuesday as Chinese stocks bounced from a unstable start, offering hope that Monday's fall was a flash in the pan.
MSCI's broadest index of Asia-Pacific shares outside Japan edged up higher 0.3 percent, while Taiwan Stocks dropping down 0.5 pct at 8,075.11 points. The CSI300 index rebounded to be 0.7 percent higher, with Shares in Shanghai last up 0.2 percent.
Australia's S&P/ASX 200 Index closed down 1.55 pct at 5,188.90 points, while Nikkei edged down 0.42 pct at 18,374.00, with Seoul Shares climb up 0.59 pct.
Commodities Recap
Gold added to an overnight surge in prices on Tuesday, as escalating geopolitical tensions in the Middle East and a global stock market rout triggered safe-haven bids for the metal. Spot gold edged up 0.1 percent to $1,075.70 an ounce by 0044 GMT. It had climbed up as much as 2.2 percent to a 4-week high of $1,083.30 on Monday, before ending the day up 1.3 percent.
Oil prices climbed up on Tuesday after witnessing a volatile session the previous day, with the impact of tension in the Middle East offset by worries over global economic growth. Global oil benchmark Brent was up 22 cents at $37.44 a barrel by 0142 GMT, after hitting a 3-week high of $38.99 on Monday, while U.S. crude added 27 cents to $37.03.
Treasuries Recap
U.S. 10-Year Treasuries yield stood at 2.2587 percent up by 0.014.
Canadian government bond prices were marginally higher across the maturity curve, with the benchmark 10-year rising 2 Canadian cents to yield 1.395 percent, while the 2-year gained up 2 Canadian cents to yield 0.468 percent.
