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Asia Roundup: Asian markets in red, Yen touches a fresh 18-month high against the greenback and Gold remains supported around fresh 15 –month high at $1296 - Monday, May 02nd, 2016

Market Roundup

  • Taiwan April Manufacturing PMI Falls to 49.7 Vs 51.1 in March.
     
  • Taiwan New Orders Shrink at Fastest Pace since Oct 2015.
     
  • Japan Final April manufacturing PMI Falls to 48.2 (Vs Flash 48.0, March Final 49.1).
     
  • Australia April Business Conditions Index Dips to 9 Vs 12 in March – NAB.
     
  • Australia April Business Confidence Index Falls to 5 Vs 6 in March – NAB.
     
  • South Korea April Manufacturing PMI at 50.0 Vs 49.5 in March - Nikkei/Markit.
     
  • South Korea April PMI for New Export Orders 49.0 Vs 49.3 in March - Nikkei Markit.
     
  • Australia April Melbourne Institute Trimmed Mean Inflation Gauge +0.2% M/M, 1.5% Y/Y.
     
  • Australia April Melbourne Institute Inflation Gauge +0.1% M/M, Y/Y Slows to 1.5%.
     
  • South Korea Plans No Changes to Current Stance it will engage in "Smoothing Actions" against sudden change in FX Mkts -Senior FX Authority.
     
  • Australia AIG Performance of manufacturing Index Fell 4.7 Points to 53.4 in April.
     
  • ECB's Coeure says Inflation will only gradually rise but silently giving up on Target is not an Option – Paper.

Economic Data Ahead

  • (0330 ET/0730 GMT) Switzerland Manufacturing PMI, previous 53.2, consensus 53.6.
     
  • (0345 ET/0745 GMT) Italy Markit/ADACI Manufacturing PMI, previous 53.5, consensus 54.1.   
     
  • (0350 ET/0750 GMT) France Markit Manufacturing PMI, previous 48.3, consensus 48.3.     
     
  • (0355 ET/0755 GMT) Germany Markit/BME Manufacturing PMI previous 51.9, consensus 51.9.
     
  • (0400 ET/0800 GMT) Euro zone Markit Manufacturing Final PMI previous 51.5, consensus 51.5.

Key Events Ahead

  • No key events scheduled for the day.

FX Recap

USD: The dollar's index against a basket of six major currencies slipped to its lowest level in more than 8 months, falling to 92.866, not far from its Aug 24 low of 92.621. The index is down 5.8 percent so far this year. The dollar fell as far as 106.14 yen, breaking through Friday's trough of 106.27. It slumped nearly 5 percent last week - a percentage fall not seen since 2008 - after the Bank of Japan refrained from adding fresh stimulus.

EUR/USD: The euro edged up against the US dollar to a fresh 6 1/2-month high of $1.1481. Intraday bias remains bullish till the time pair holds key support at $1.1384. A sustained break below it will drag the parity down towards $1.1314/$1.1215 marks. On the top side, key resistances are seen at $1.1481/1.1522/1.1622 marks.

USD/JPY:  The yen touched a fresh 18-month high against the greenback early on Monday after its biggest weekly gain in over seven years as traders bet that Tokyo policymakers have limited capacity to stem the yen's gains. Intraday bias remains bearish till the time pair holds immediate resistance at 107.87 levels. A daily close below 106.15 will drag the parity down towards key supports at 105.71, 105.45 and 104.55 levels respectively. Alternatively, reversal from key support will take the parity higher towards key resistances at 107.87, 109.49, 111.23, 112.60 and 113.42 levels respectively. Today Japan released manufacturing PMI data with positive numbers at 48.2 m/m vs 48.0 m/m previous release.

GBP/USD: The Sterling hit its strongest in 12 weeks against the dollar on Friday, as investors sold the U.S. currency on expectations that the Federal Reserve will not hurry to raise interest rates in coming months. The Sterling erases previous loss against the dollar on Monday and supported above $1.4613 marks. A daily close above $1.4620 will take the parity up towards key resistances at $1.4668/$1.4739 levels. Alternatively, reversal from key resistance will drag the parity down at $1.4357 marks.

AUD/USD: The Australian and New Zealand dollars crept up against their U.S. counterpart on Monday and regained some ground on the yen in quiet trading with much of Asia closed for the May Labour Day holiday. Intraday bias remains bullish till the time pair holds key support at $0.7548 levels. On the top side, a key resistance is seen at $0.7741 marks. Australia's NAB business confidence data fell to 5 m/m vs 6 m/m previous release while NAB business condition fell to 9 m/m vs 12 m/m previous release.

NZD/USD: The New Zealand dollar traded at around $0.6990, rising from around $0.6960 on Friday and near the levels it soared to last week after the country's central bank skipped a chance to cut interest rates. Support was found at $0.6773. Resistance was seen at around $0.7054.  

Equities Recap

Chinese markets will be closed in observance of Labour Day.

The Nikkei 225 index was trading 3.40% lower to 16,099.95 points on Monday morning in Tokyo, while the broader Topix index tumbled 3.42% to 1,293.10 points.

South Korea's Kospi equity was trading 0.73% lower at 1,979.67 points on Monday.

Australia's benchmark S&P/ASX 200 index was trading 0.34% lower at 5,235.20 points in Sydney on Monday.

New Zealand's S&P/NZX 50 index traded 0.25% lower at 6,803.69 points.

Commodities Recap

Oil prices fell on Monday as rising production in the Middle East outweighed a decline in U.S. output and a recent slide in the dollar, which has been supporting crude. Brent was trading at $46.77 per barrel at 0440 GMT, down 60 cents, or 1.3 percent, from its last settlement. U.S. crude was down 48 cents, or just over one percent, at $45.44 a barrel.

Gold traded near a 15-month peak on Monday as a tumble in the dollar and weakness in global equities pushed up the metal to near $1,300 an ounce. Spot gold was little changed at $1,292.27 an ounce by 0322 GMT, after climbing to $1,296.11 on Friday, the highest level since January 2015. U.S. gold futures rose 0.3 percent to $1,294.50. They hit a 15-month top of $1,299 in the previous session before paring some gains.

Treasuries Recap

New Zealand government bonds eased, sending yields 1.5 basis points higher at the long end of the curve.

Australian government bond futures were quiet, with the three-year bond contract off one tick at 98.150. The 10-year contract was steady at 97.4850, while the 20-year contract eased 1.5 ticks to 96.8750.

 

 

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