Asia Roundup: Aussie snaps 3-day winning streak, Yen strengthens on better-than-expected economic data, crude oil volatile ahead of OPEC meet - Tuesday, November 29th, 2016

Market Roundup

• CFTC IMM CTA data – Specs boost USD longs again, JPY net longs fall to lowest since early January, 10.9k contracts, EUR shorts 119.3k, GBP net shorts 74.3k and lowest since late September, AUD longs off, NZD shorts up.
   
• Fund managers cut S&P 500 futures net long positions in latest week – CFTC.
   
• Foreigners rush to buy into not-Abenomics narrative – Financial Times.
   
• Israel CB Gov – Small countries bracing for protectionist turn – Nikkei.
   
• Japan Oct household spending -1.0% m/m, -0.4% y/y, +0.1% and -0.6% eyed.
   
• Japan Oct retail sales -0.1% y/y, -1.2% eyed.
   
• Japan Oct unemployment 3.0%, unch and as eyed, jobs-applicants ratio 1.40, best since Aug ’91, 1.39 eyed, Sept 1.38, conditions continue to improve.
   
• PBOC fixes CNY at 6.8889, USD lower, state-owned banks again seen buying CNY.
   
• China CB branches said to ask banks to step up mortgage controls – Bloomberg.
   
• BoC Gov Poloz – Service sector pointing way to recovery, divergence in US- Canada monetary policy, plenty uncertainties still, will use unconventional measures if needed but would take shock to inflation view to move, too early to tell the impact of Trump win – Reuters.
   
• UK consumer morale edges up, households worry about finances – YouGov, CEBR.
  ​

Economic Data Ahead

• (0245 ET/0745 GMT) France Oct consumer spending, +0.4% m/m eyed; last -0.2%.
   
• (0245 ET/0745 GMT) France Q3  GDP – detailed, +0.2% q/q, +1.1% y/y eyed; last +0.2%, +1.1%.
   
• (0300 ET/0800 GMT) Spain Nov HICP – flash, +0.5% y/y eyed; last +0.5%.
   
• (0315 ET/0815 GMT) Switzerland Q3  non-farm payrolls; last 4.9 mln.
   
• (0330 ET/0830 GMT) Sweden Q3  GDP, +0.5% q/q, +3.0% y/y eyed; last +0.5%, +3.4%.
   
• (0430 ET/0930 GMT) Great Britain Oct consumer credit, GBP1.5 bln eyed; last GBP1.41 bln.
   
• (0430 ET/0930 GMT) Great Britain Oct mortgage approvals, 65k eyed; last 62.93k.
   
• (0430 ET/0930 GMT) Great Britain Oct mortgage lending, GBP3.2 bln eyed; last GBP3.25 bln.
   
• (0430 ET/0930 GMT) Great Britain Oct money supply M4; last -0.4%.
   
• (0500 ET/1000 GMT) Eurozone Nov economic sentiment index,  107.0 eyed; last 106.3.
   
• (0500 ET/1000 GMT) Eurozone Nov business climate index,     0.57 eyed; last  0.55.
   
• (0500 ET/1000 GMT) Eurozone Nov industrial sentiment index, -0.5 eyed; last  -0.6.
   
• (0500 ET/1000 GMT) Eurozone Nov services sentiment index,   12.5 eyed; last  12.0.
   
• (0500 ET/1000 GMT) Eurozone Nov consumer confidence index – final, -6.1 eyed; last -8.0.
   
• (0530 ET/1030 GMT) Belgium Nov CPI; last +0.29% m/m, +1.81% y/y.
   
• (0800 ET/1300 GMT) Germany Nov HICP – flash, +0.1% m/m, +0.8% y/y eyed; last +0.2%, +0.7%.
   
• (0830 ET/1330 GMT) United States Q3  GDP - 2nd estimate, +3.0% AR eyed; prelim +2.9%.
   
• (0830 ET/1330 GMT) United States Q3  PCE price index,    +2.0% AR eyed; prelim +1.4%.
   
• (0830 ET/1330 GMT) United States Q3  - core PCE,         +1.8% AR eyed; prelim +1.7%.
   
• (0830 ET/1330 GMT) United States Q3  GDP deflator,       +1.5% AR eyed; prelim +1.5%.
   
• (0830 ET/1330 GMT) United States Q3  corporate profits; prelim -1.9%.
   
• (0900 ET/1400 GMT) United States Sep CaseShiller 20, +0.4% m/m nsa, +5.2% y/y eyed; last +0.4%, +5.1%.
   
• (1000 ET/1500 GMT) United States Nov consumer confidence index, 101.2 eyed; last 98.6.
   
• (1030 ET/1530 GMT) United States Nov Dallas Fed services revenues, outlook indices; last 9.9, 3.0.
   

Key Events Ahead

• (0330 ET/0830 GMT) EuroGroup Dijsselbloem Brussels parliamentary testimony.
   
• (0400 ET/0900 GMT) BIS Borio addresses UK House of Commons.
   
• (0430 ET/0930 GMT) ECB 7-day zero% refi, E34.5 bln allotment eyed, E33.7 bln maturing.
   
• (0500 ET/1000 GMT) Italy E1.25-1.75/1.0-1.5 bln 0.35/1.25% 2021/26 BTP auctions.
   
• (0500 ET/1000 GMT) Italy E0.5-1.0/1.25-2.0 bln 0.199/0.287 2022/24 CCTeu auctions.
   
• (0530 ET/1030 GMT) Belgium E1.1-1.5 bln 3 and 6-month treasury certificate auctions.
   
• (0815 ET/1315 GMT) NY Fed Dudley speaks in San Juan, Puerto Rico.
   
• (1200 ET/1700 GMT) Fed Gov Powell speaks in Indianapolis.
   
• (1500 ET/2000 GMT) RBNZ bi-annual financial stability report.
   

FX Beat

DXY: The dollar steadied against its major rivals after declining from multi-month highs on easing U.S. Treasury yields. The greenback against a basket of currencies trades 0.1 percent up at 101.29, pulling away from a low of 100.64 hit on Monday, its lowest since Nov. 17. FxWirePro's Hourly Dollar Strength Index stood at -110.98 (Highly Bearish) by 0500 GMT.

EUR/USD: The euro edged lower after rising to a more than 1-week high in the previous session, as political risk resurfaced in Europe ahead of a referendum in Italy this weekend. The major fell below the 1.0600 handle, as concerns about Italy's banking system have been increasing ahead of a Dec. 4 referendum on constitutional reform. The European currency trades 0.15 percent down at 1.0597, hovering away from a high of 1.0658 hit on Monday, its highest since Nov. 17. FxWirePro's Hourly Euro Strength Index stood at 6.28 (Neutral) by 0400 GMT. Markets now await Eurozone's Business sentiment surveys and German CPI data, ahead of U.S. preliminary Q3 gross domestic product figures for further momentum on the pair. Immediate resistance is located at 1.0685 (Previous Session High), a break above targets 1.0791 (21-DMA). On the downside, support is seen at 1.0526 (Nov. 23 Low), a break below could drag it near 1.0500.

USD/JPY: The dollar nudged up, however, traded below the 112.00 handle, as volatile crude oil prices ahead of this week's oil producers' meeting triggered risk-off sentiment in the financial markets. Additionally, better-than-expected Japanese retail sales and household spending data released earlier showed a tentative sign that a robust labor market lend support to domestic demand, which further underpinned the bid tone around the safe-haven yen.  The major traded flat at 111.90, but within the sight of a low of 111.35 hit in the previous session. FxWirePro's Hourly Yen Strength Index stood at 69.61 (Bullish) by 0400 GMT. Investors will closely watch U.S. third-quarter gross domestic product data, consumer confidence and consumption reading for fresh impetus. Immediate resistance is located at 113.00, a break above targets 113.90/ 114.44. On the downside, support is seen at 111.40 (9-EMA), a break below could take it lower 111.00.

GBP/USD: Sterling tumbled, extending losses below the 1.2400 handle, as demand for EUR/GBP cross drove the offer in the British currency. On Monday, the major rose to a 2-week high above the 1.2500 handle as the greenback weakened across the board, however, it reversed gains to hit a 5-day low of 1.2385 amid political uncertainty in Europe.  Sterling trades 0.15 percent down at 1.2395, pulling further away from a high of 1.2531 hit in the previous session, its highest since Nov. 14. FxWirePro's Hourly Sterling Strength Index stood at -90.05 (Slightly Bearish) by 0400 GMT. Markets focus now remains on the UK mortgage approvals and consumer credit data, amid Europe political risks. Immediate resistance is located at 1.2433 (5-DMA), a break above could take it near 1.2500. On the downside, support is seen at 1.2360, a break below targets 1.2300. Against the euro, the pound trades lower at 85.48 pence, having hit a low of 85.67 pence the day before, its lowest since Nov. 23.

AUD/USD: The Australian dollar declined, snapping its 3-day winning streak as selling in the commodities and renewed strength in the US dollar across the board weakened the bid tone around the major. The pair initially rose to a fresh near 2-week high, however, it retreated as cautious tone amid growing nervousness around the ongoing OPEC output cut talks, weighed on the oil prices, eventually impacting the Australian currency.  The Aussie trades 0.06 percent lower at 0.7476, having touched an early high of 0.7497, its strongest since Nov. 17. FxWirePro's Hourly Aussie Strength Index stood at 126.07 (Highly Bullish) by 0500 GMT. Investors will continue to track board based market sentiment, ahead of U.S. economic data and speeches from the Fed officials. Immediate support is seen at 0.7417 (10-DMA), a break below could drag it lower 0.7400. On the upside, resistance is located at 0.7534 (21-DMA), a break above targets 0.7580/ 0.7600.

NZD/USD: The New Zealand dollar gained, extending its recovery mode for the third consecutive session, despite volatility in the crude oil prices. On Monday, the major rallied to a 1-week high of 0.7101, however, its failed to extend gains above the 0.7100 handle amid prevalent risk-off market sentiment. The Kiwi trades 0.1 percent up at 0.7081, hovering away from a low of 0.6971 hit last week, it’s lowest since Jul. 25. FxWirePro's Hourly Kiwi Strength Index was at 133.52 (Highly Bullish) by 0500 GMT. Markets attention will remain on U.S. macro fundamental drivers and Federal Reserve official speeches for further cues on the pair. Immediate resistance is located at 0.7110, a break above could take it near 0.7148 (21-DMA). On the downside, support is seen at 0.7035 (5-DMA), a break below could drag it near 0.7000.

Equities Recap

Asian shares stumbled, while the U.S. dollar took a breather as markets turned cautious ahead of an OPEC meeting on Wednesday and a referendum in Italy this weekend.

MSCI's broadest index of Asia-Pacific shares outside Japan was little changed after two days of gains.

Tokyo's Nikkei declined 0.33 percent to 18,297.06 points, Australia's S&P/ASX 200 index edged down 0.03 percent to 5,466.30 points and South Korea's KOSPI dropped 0.19 percent at 1,974.36 points.

Shanghai composite index gained 0.35 percent at 3,288.01 points, while CSI300 index advanced 0.9 percent at 3,566.48 points.

Hong Kong’s Hang Seng shed 0.2 percent at 22,785.74 points. Taiwan shares fell 0.3 percent at 9,192.38 points.

Commodities Recap

Crude oil prices edged down, after recovering from a 10-day low on Monday as growing concerns that producer cartel OPEC will not be able to finalize a meaningful output cut during a meeting on Wednesday hurt market sentiment. International benchmark Brent crude was 0.27 percent down at $47.87 per barrel by 0405 GMT, having hit a 10-day low of $46.31 in the previous session. U.S. West Texas Intermediate crude declined 0.3 at $46.72 a barrel, after falling to a low of $45.17, its lowest since Nov. 18.

Gold edged lower, reversing some of its previous session gains, as the U.S. dollar steadied, while markets remained cautious ahead of an OPEC meeting this week that could see oil producers curb output. Spot gold was 0.26 percent down at $1,189.79 an ounce by 0410 GMT, having gained 0.9 percent in the prior session. U.S. gold futures were 0.2-percent lower at $1,188.50 per ounce.

Treasuries Recap

The 10-year U.S treasury yield stood at 2.3107 percent lower by 0.009 bps , while 5-year yield was down by 0.013 bps at 1.7894 percent.

The Australian government bonds traded narrowly mixed as investors await the OPEC ministerial gathering, in which oil-producing countries are expected to strike an agreement on output cut. The yield on the benchmark 10-year Treasury note fell nearly 1 basis point to 2.70 percent, the yield on the 15-year note climbed 1-1/2 basis points to 3.12 percent and the yield on short-term 2-year inched 1-1/2 basis points to 1.84 percent.

The New Zealand government bonds closed modestly firmer as investors remained cautious ahead of the OPEC ministerial gathering, in which oil-producing countries are expected to strike an agreement on output cut. The yield on the benchmark 10-year bond closed 1 basis point lower at 3.12 percent and the yield on short-term 2-year note fell 5-1/2 basis points to 2.12 percent.

Canadian government bond prices were higher across a flatter yield curve in sympathy with U.S. Treasuries. The 2-year bond rose 1.5 Canadian cents to yield 0.663 percent and the benchmark 10-year climbed 40 Canadian cents to yield 1.523 percent. The 10-year yield touched an 11-month high at 1.614 percent last week.