Asia Roundup: Yen stays supported over global growth concerns, focus on Euro area CPI and German Zew index - Tuesday, January 19th, 2016

Market Roundup

• BoJ Gov Kuroda - Will adjust policy without hesitation if needed, will do whatever is necessary to meet 2% price target - Reuters.
  
  
• Japan EconMin Amari - Stocks down on external factors, economic fundamentals solid, excessive oil price falls leading some producers to sell Japan assets.
  
  
• FinMin Aso - Fundamentals firm, no need to fret over stock price falls -RTRS.
  
  
• Record number of tourists to Japan spent Y3.5 trln in '15 - Nikkei.
  
  
• China Q4 GDP +1.6% q/q, +6.8% y/y, +1.7% and +6.8% forecast, '15 GDP +6.9%, '14 +7.3%, '15 growth slowest since 1990, Q4 growth slowest since Q1 '09, NBS - slowdown in property and stock markets negatively impacted growth.
  
  
• China Dec industrial output +5.9% y/y, retail sales +11.1%, +6%/+11.3% forecast.
  
  
• China '15 fixed asset investment +10.0%, +10.2% forecast, slowest annual pace since 2000, '15 property investment +1.0% y/y.
  
  
• BoE MPC Vlieghe - To be patient before raising rates, need to ensure growth not slowing, must eye broad range of inflation indicators, wage pressures absent, economy may not return to pre-crisis growth, interest rates -Reuters.
  
  
• King-Goodfriend report - Calls on Riksbank to change inflation measure, urges sweeping changes - Reuters exclusive.
  
  
• NZ NZIER QSBO - Q4 biz confidence +15.0%, cap util 93.2%, Q3 -14.0, 92.3%.
  
  
• Oil stays under pressure as Iran orders sharp rise in crude output - Reuters.

• (0315 ET/0815 GMT)  Switzerland Dec producer/import prices; last +0.4% m/m, -5.5% y/y.
  
  
• (0400 ET/0900 GMT)  Eurozone Nov current account bal; last E25.9 bln nsa, E20.4 bln sa surpluses.
  
  
• (0400 ET/0900 GMT)  Eurozone Nov net investment flow; last E47.6 bln inflow.
  
  
• (0430 ET/0930 GMT)  Great Britain Dec CPI, unch m/m, +0.1% y/y forecast; last  unch, +0.1%.
  
  
• (0430 ET/0930 GMT)  Great Britain Dec - core, +0.1% m/m, +1.2% y/y forecast; last  unch, +1.2%.
  
  
• (0430 ET/0930 GMT)  Great Britain Dec RPI, +0.2% m/m, +1.1% y/y forecast; last +0.1%, +1.1%.
  
  
• (0430 ET/0930 GMT)  Great Britain Dec RPIX; last +0.1% m/m, +1.1% y/y.
  
  
• (0500 ET/1000 GMT)  Germany Jan ZEW economic sentiment index,  8.2 forecast; last 16.1.
  
  
• (0500 ET/1000 GMT)  Germany Jan ZEW current conditions index, 54.0 forecast; last 55.0.
  
  
• (0500 ET/1000 GMT)  Eurozone Dec inflation - final, unch m/m, +0.2% y/y forecast; flash -0.1%, +0.2%.
  
  
• (0500 ET/1000 GMT)  Eurozone Dec - ex-food/energy, +0.3% m/m, +0.9% y/y forecast; last  -0.2%, +0.9%.
  
  
• (1000 ET/1500 GMT)  United States Jan NAHB housing market index, 61.0 forecast; last 61.0.

• N/A   Central-Eastern European Forum in Vienna, various speakers (till Jan 20).
  
  
• N/A   ESM E1.5 bln 6-mo, Spain 6/12-month bill auctions.
  
  
• (0430 ET/0930 GMT)  London ONS economic forum.
  
  
• (0430 ET/0930 GMT)  ECB 7-day refi at fixed 0.05%, E65 bln allotment forecast, last bln.
  
  
• (0500 ET/1000 GMT)  IMF World Economic Outlook update, BoE hosts press conference.
  
  
• (0500 ET/1000 GMT)  Finland @E1.5 bln 0.375% and 2.625% 2020 and 2042 RFGB auctions.
  
  
• (0700 ET/1200 GMT)  BoE Gov Carney speech at Queen Mary University.
  
  
• (0830 ET/1330 GMT)  Canada Nov int'l securities flow data.
  
  
• (1600 ET/2100 GMT)  United States Tsy Nov int'l capital flows data (TIC report), Oct $68.9 bln inflow.

USD: Rising caution on the U.S. economy curbed the U.S. dollar. Against a basket of currencies, the dollar index trades 0.05 percent up, at 99.13, maintaining distance from this year's high of 99.63 touched on Jan 5.

EUR/USD: The euro trades 0.11 percent low at 1.0877 levels, having touched sessions high of 1.0904. The pair is seen drifting towards sessions low after weak Chinese GDP release brought risk-aversion back into markets. The upside in the EUR/USD pair remains limited as the upcoming economic news from the Euro zone and Germany are likely to disappoint markets, further weighing on the currency. However, the main focus is expected to remain on the US inflation report and the ECB meeting due later this week. Currently the pair trades at 1.0877 levels as trades continue to follow previous session's bearish trend. Immediate support is seen at 1.0870 (15 - DMA), while resistance is located at 1.0913 (Dec 17 High). 

USD/JPY: The dollar stood at 117.79 yen, having recovered from a 5-month low of 116.50 set on Friday. The yen has been the best performer so far this year among major currencies with gain of about 2.5 percent. Fluctuations in the Chinese yuan earlier this year increased fears over the Chinese economy, prompting investors to buy back safe-haven assets including the yen. Although Beijing has managed to stabilise the yuan through massive intervention, signs of huge capital outflow from China highlighted worries over China's economy. The pair currently trades at 117.80 levels, drifting towards sessions high 117.83. Resistance is located 118.00 levels, while on the downside, support is seen at 117.23 (Sessions Low).

AUD/USD: The Australian dollar trades at 0.6908, after going as low as 0.6838, not far from a 7-year low of $0.6827 hit on Friday. The Aussie dropped to a 7-year low of 0.6827 last week amid a rout in commodity-linked currencies. It continues to be under pressure as oil prices hit a new 12-year low on Monday. Confusion over China's currency policy and its commitment to reforms also adds further worries. Markets sold-off the Aussie as China's economy dropped to 6.8 percent in the fourth quarter of 2015, down from the 6.9 percent in the previous quarter and against 6.9 percent growth expected, with industrial production and retail sales figures also slightly weaker than expectations. Markets draw their attention towards Australian consumer sentiment and the U.S. CPI data due in this week, in absence of relevant economic data for pair today. Resistance is located at 0.6927 (Previous Day High), while on the downside, support is seen at 0.6838 (Session's Low).

NZD/USD: The New Zealand dollars reversed early gains as disappointing data on Chinese retail sales and industrial output underlined concerns about global growth. The reversal in gains also came after a quarterly report from the New Zealand Institute of Economic Research (NZIER) showed business confidence rebounded in the fourth quarter. The bounce suggests the central bank will keep interest rates on hold this year noted the NZIER. Markets awaits for inflation data which is scheduled on Wednesday for clues of further rate cuts possibilities. Currently the pair trades flat at 0.6450. Resistance is located at 0.6479 (Previous session High), while support is seen at 0.6415 (Sessions Low). 

USD/CNY: The People's Bank of China kept the yuan steady, setting the currency's midpoint fix at 6.5596 per dollar prior to market open, almost unchanged from the previous fix of 6.5590. If the weakness in renminbi continues, then it is likely to pose a challenge to the growth as volatility and capital outflows will worsen. China's economy grew 6.8 percent in the fourth quarter from a year earlier, the slowest growth since 2009. December Industrial output rose 5.9 percent from a year earlier, compared with forecasts for a 6.0 percent increase. The spot market opened at 6.5775 per dollar and was trading at 6.5796 at midday. The offshore weakened 100 pips during the morning to 6.5960, nearly 0.3 percent drifting from the onshore rate.

Equities Recap

Asian stocks rose modestly and crude oil prices climbed up on Tuesday after Chinese GDP figures were mostly in line with expectations.

MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.2 percent after earlier touching its lowest level since October 2011, while Taiwan stocks climbed up 0.6 pct at 7,854.88 points.

Australia's S&P/ASX 200 Index edged up 0.74 pct at 4,894.50 points, while Nikkei closed up 0.55 pct at 17,048.37, with Seoul shares climbing up 0.52 pct.

Commodities Recap

Gold steadied on Tuesday as equities were under pressure as China's economy grew at its slowest pace since 2009 in the fourth quarter, pushing investors towards safe-haven assets. Spot gold was little changed at $1,089.56 an ounce by 0330 GMT, after a sluggish session on Monday with U.S. markets shut for the Martin Luther King holiday. U.S. gold for February delivery was flat at $1,089.70 an ounce, while Palladium was steady at $490.90 an ounce and silver flat at $13.94.

Oil futures remained under pressure on Tuesday following a slide in prices in this quarter as the full return of Iran to oil markets adds to an already huge supply overhang. U.S. crude futures were trading at $29.14 a barrel by 0249 GMT, down 28 cents from their last settlement. Front-month Brent crude futures remained below $29 per barrel at $28.84 per barrel after rising slightly in early trade.

Treasuries Recap

U.S. 10-Year Treasuries yield stood at 2.0574 percent up by 0.026. 

Australian government bond futures edged up, with the 3-year bond contract up 2 ticks at 98.130. The 10-year contract gained 2 ticks to 97.3300, while the 20-year contract eased half a tick to 96.8050.

New Zealand government bonds eased slightly.

Canadian government bond prices were lower across the maturity curve, with the benchmark 10-year dropping 11 Canadian cents to yield 1.163 percent, while the 2-year price down 5 Canadian cents to yield 0.312 percent.