Asia Roundup: New zealand's current account sinks into deficit in Q2 on higher oil imports - September 16, 2015

Market Roundup

• New Zealand Q2 current account deficit NZ$1.22 bln nsa, year-to-June 30 NZ$8.3 bln, NZ$1.5 bln and NZ$8.8 bln deficits eyed, Q2 deficit NZ$2.1 bln sa.
  
  
• NZ Fonterra GDT price index +16.5%, highest since April, volumes up too but still at low levels.
  
  
• Universal Studios Japan owners in talks to sell stake to NBC, $6bln deal.
  
  
• ECB/Buba Gov Weidmann - Cheap money can't spur sustained growth.
  
  
• RBA Asst Gov Debelle - China's move to more market-determined CNY welcome.
  
  
• Australia August Westpac/MI leading index 97.49, momentum slows, July 97.75.

Economic Data Ahead

• (0430 ET/0830 GMT) UK August claimant count, -5k eyed; last -4.9k.
  
  
• (0430 ET/0830 GMT) UK July ILO unemployment, 5.6% eyed; last 5.6%.
  
  
• (0430 ET/0830 GMT) UK July average weekly earnings - 3-mo average, +2.5% y/y eyed; last +2.4%.

• (0430 ET/0830 GMT) UK July average earnings ex-bonus, +2.9% y/y eyed; last +2.8%.
  
  
• (0500 ET/0900 GMT) Euro zone August inflation final, unchanged m/m, +0.2% y/y eyed; flash -0.6%, +0.2%.

• (0500 ET/0900 GMT) Euro zone August ex-food/energy, +0.3% m/m, +1.0% y/y eyed; flash -0.6%, +0.9%.
  
  
• (0500 ET/0900 GMT) Euro zone Q2 wages, labour costs; last +2.2% y/y for both.
  
  
• (0500 ET/0900 GMT) Switzerland September ZEW investor sentiment index; last 5.9.
  
  
• (0830 ET/1230 GMT) US August CPI, unchanged m/m, +0.2% y/y eyed; last +0.1%, +0.2%.
  
  
• (0830 ET/1230 GMT) US August core, +0.1% m/m, +1.9% y/y eyed; last +0.1%, +1.8%.
  
  
• (0830 ET/1230 GMT) US August real weekly earnings; last +0.4%.
  
  
• (1000 ET/1400 GMT) US September NAHB housing market index, 61 eyed; last 61.
  
  
• (1130 ET/1530 GMT) US August Cleveland Fed CPI; last +0.2%.

Key Events Ahead

• N/A ECB General Council meeting, no rate announcements scheduled.
  
  
• N/A Greece E1 bln 13-week, Portugal E1-1.25 bln each 6/12-mo bill auctions.
  
  
• (0230 ET/0630 GMT) France FinMin Sapin press conference on '16 budget, macro projections.
  
  
• (0330 ET/0730 GMT) Riksbank September policy meeting minutes.
  
  
• (0430 ET/0830 GMT) Denmark CB presents quarterly monetary review.
  
  
• (0500 ET/0900 GMT) OECD economic forecast updates for major economies.
  
  
• (0530 ET/0930 GMT) Germany E2 bln 2.5% 2046 Bund, UK DMO bln 2% 2025 Gilt auctions.
  
  
• N/A FOMC begins two-day meeting.
  
  
• (0830 ET/1230 GMT) Canada int'l securities flow data.
  
  
• (0915 ET/1315 GMT) BoE Gov Carney et al parliamentary testimony on August inflation report.
  
  
• (1335 ET/1735 GMT) BoC Dep Gov Cote presentation in Winnipeg.
  
  
• (1600 ET/2000 GMT) US Treasury July int'l capital flows data (TIC report).

FX Recap

EURUSD: The Euro extends its overnight recovery mode versus the US dollar in the mid-Asian trades, with EUR/USD fighting hard to regain 1.13 barriers. Currently the pair is trading at 1.1289 levels. It made intraday high at 1.1298 and low at 1.1263 levels. Overnight, the US released some important data, including retail sales, manufacturing, and industrial production, which was broadly negative. Core retail sales rose only 0.1% month-on-month in August, missing the 0.2% gain forecast by markets, however, July's retail sales growth was revised up from 0.4% to 0.6%. US industrial production fell 0.4% month-on-month in August, also missing forecasts, but again, upward revisions were made to July's data. The Empire State Manufacturing index was at -14.7 in September, much worse than the predicted reading of -0.5. Looking ahead, the pair is likely to get influenced by Euro zone final CPI figures ahead of the US inflation numbers. Markets may remain cautious as the Fed meeting commences later today, with final verdict on the rates due to be announced tomorrow. Initial support is seen around at 1.1015 and resistance at 1.1363 levels.

USDJPY: After the Bank of Japan left rates unchanged at its monetary policy meeting earlier on Tuesday, the Yen extended overnight gains and strengthened below the ¥120 handle. Moreover negative US data of yesterday helped the pair to climb above 120.00 levels. Currently pair is trading at 120.14 levels. It made intraday high at 120.46 and low at 120.10 levels. Today BOJ published monthly report indicating Japan's economy has continued to recover moderately, although exports and production are affected by the slowdown in emerging economies. Initial resistance is seen at 123.20 and support is seen at 118.42 levels.

GBPUSD: Pair is supported above 1.5300 levels and currently trading at 1.5343 levels. It made intraday high 1.5356 and low at 1.5334. The official figures on the UK labour market are expected to show the jobless rate remained at 5.6% in the quarter to July, while jobless claims, a narrower and less distant gauge tracking labour market activity, is expected to have declined by 5,000 people between July and August, significantly down from a two-year average of 27,300. Moreover, markets remain wary ahead of Thursday's Fed decision, on increased speculations that the Fed rate hike could be pushed back to early 2016, thus reducing the demand for the US currency. Initial support is seen at 1.5185 and resistance is seen around 1.5507 levels.

NZDUSD: New Zealand's current account recorded a deficit of $1.22 billion in the June quarter, following a revised surplus of $821 million in the first quarter. The current account deficit was $8.3 billion for the year ended June 2015, or 3.5% of GDP, rising from 3.4% of GDP in the March quarter, after the first quarter was revised down from 3.6%. Pair made an intraday high at 0.6364 and low at 0.6344 levels. Initial support is seen at 0.6195 and resistance at 0.6511 levels.

AUDUSD: The Australian dollar fell slightly on Wednesday morning in Sydney after a central banker said Australia's medium-term growth rate has slowed, due to weaker population growth. Slower population growth has also had a positive impact on Australia's unemployment rate, keeping it fairly steady over the last year, contrary to the RBA's earlier predictions that it would peak at a higher level. It made intraday high at 0.7147 and low at 0.7123 levels. Initial support is seen at 0.6908 and resistance at 0.7182 levels.

Equity Recap

Japan's benchmark Nikkei 225 index rose 0.87% to 18,183.00 points within the first hour of trade, while Tokyo's broader Topix gauge jumped 0.80% to 1,473.98 points.

Hong Kong's benchmark Hang Seng index advanced 1.12% to 21,696.38 points at the opening bell, and mainland China's benchmark Shanghai Composite grew 0.31% to 3,014.40 points at the same time.

Korea's benchmark Kospi index surged 1.42% to 1,965.09 points this morning in Seoul, with Samsung Electronics rallying 1.6%.

The benchmark Australian S&P/ASX 200 index rallied 1.21% to 5,079.10 points in Sydney, with miners and banks leading the charge.

New Zealand's benchmark S&P/NZX 50 index rose 0.27% to 5,667.69 points this afternoon in Wellington.

Australia's S&P/ASX 200 index closes up 1.52 pct at 5,094.70 points.

Tokyo's Nikkei average closes up 0.81 pct at 18,171.60.

Treasury Recap

Japan 12-month treasury discount bill auction lowest price 100.0160, average price 100.0250, bids accepted at lowest price 97.7954 pct. Japan 20-year JGB auction lowest price 100.3000, average price 100.5700, bids accepted at lowest price 83.9388 pct.

10-year US treasury yield at 2.263 percent vs US close of 2.281 percent on Tuesday.

China finance ministry auctions 7-year bonds at 3.2861 pct yield, market expected 3.30 pct.

New Zealand government bonds eased, sending yields as much as 7 ticks higher on the long end of the curve.

Australian government bond futures also fell, with the three-year bond contract off 7.5 ticks at 98.050. The 10-year contract dropped 12 ticks to 97.1700, having touched their lowest in a month.

Commodity Recap

Gold struggled to break out of a tight range near a one-month low on Wednesday, as investors waited to hear the outlook for U.S. interest rates from a Federal Reserve policy meeting that kicks off later in the session. Spot gold was little changed at $1,104.60 an ounce by 0330 GMT. Prices for the metal have been steady this week, following a drop to a one-month low of $1,098.35 the week before, with any big moves expected only after the Fed statement on Thursday.

Oil prices were traded higher on Wednesday, with a weaker greenback helping to lift both benchmarks, while traders also cheered an unexpected stockpile fall. October futures for WTI added 0.87% to trade at $44.96 per barrel, while Brent futures for November were traded 0.25% elevated at $47.87 per barrel.