DAILY ASIA-PAC OPENING NEWS

22nd November 2017

 

 

 

US

US stock markets ground to fresh intraday highs, with the S&P closing up 0.66% at 2599.07, the Dow Jones Industrial Average rose 0.69% to 23,590.83 and the Nasdaq 100 rose 1.11% to 6,378.63.

Gold and Treasuries mirrored one another catching a bid on USD weakness, before moving back to worst levels as the dollar recovered, with the 2s10s and 5s30s curves both flattening. December ‘17 T-Note futures settled at 124-22, unchanged on the day.

US Existing Home Sales (Oct) 5.48M vs. Exp. 5.42M (Prev. 5.39M, Rev. 5.37M)
Exist. Home Sales % Chg (Oct) 2.0% vs. Exp. 0.70% (Prev. 0.7%, Rev. 0.4%). (Newswires)

ASIA-PACIFIC

Fonterra Global Dairy Trade auction: GDT price index -3.4% to USD 2,970; Whole Milk Powder prices -2.7% to USD 2,778. (Newswires)

Sources suggested that the Japanese Government is to cut 30yr and 40yr JGB supply in FY 2018/2019. (Newswires)

RBA's Lowe stated there is 'not a strong case' for near-term change in interest rates with the bank paying attention to soft wage growth. (Newswires)

Japan reportedly plans first-ever cutback in 40-year bond floats in FY18 as low rates sap demand. (Nikkei)

EU/UK

Sources close to German Chancellor Merkel suggested that she favours a grand coalition with the SPD to bring an end to the political impasse. (Newswires)

Germany is said to want Brexit progress as the UK prepares its offer. (Newswires)

BoE Deputy Governor Cunliffe said inflation has been a bit lower than BoE forecast in Autumn and that it’s possible to wait before tightening policy until there is clear evidence that pay growth is responding to unemployment level. (Newswires)

UK Brexit Minister Davis said reaching a deal with EU is the most likely and the best outcome. (Newswires)

EU and UK aim to strike Brexit divorce deal within 3 weeks, according to reports. (Newswires)

ECB’s Coeure expects the link between inflation and asset purchases in policy message to be changed between now and September 2018. (Newswires)

FX

The USD experienced choppy trading conditions, as it sold off against the majority of its major counterparts in early New York dealing, but saw a modest recovery vs. GBP, EUR, JPY and CHF heading into the London fix. The commodity currencies were more resilient, with hefty option expiries in the USDCAD at 1.2750 providing a focal point, acting as a floor for that particular currency pair on the day. The AUD benefitted from RBA Governor Lowe reiterating that the next move in interest rates will most likely be higher, although he was quick to note that there is not a strong case for a near-term change in interest rates with the Bank paying particular attention to soft wage growth. Meanwhile the NZD brushed off a disappointing GDT auction.

A Mexican business representative notes that NAFTA deal is near on telecom, energy and e-commerce industries. (Newswires)

COMMODITIES

Oil has edged higher in front of the upcoming API inventory report, although crude remains well within its recent range ahead of next week’s OPEC summit in Vienna. Crude drew support from reports suggesting that Russian oil producers seem to favour a six-month production deal extension beyond the current March 2018 deadline, although talks are ongoing. While the Iranian oil minister Zanganeh suggested that (based on reports & discussions) most of the main players in the market agree that the output cuts should continue for at least another 8-9 months in 2018, but OPEC must first meet before a decision is made. WTI crude futures settled at USD 56.83/bbl, up USD 0.41, while Brent crude futures settled at USD 62.57/bbl, up USD 0.35.

US API weekly crude stocks (13 Nov, w/e) -6.356M (Prev. 6.513M). (Newswires)

Russian President Putin & the Saudi King stressed the importance of further coordinating their actions regarding energy markets. (Newswires)

Iran's oil minister Zanganeh suggested that (based on reports & discussions), most of the main players in the market agree that the output cuts should continue for at least another 8-9 months in 2018, but OPEC must first meet before a decision is made. (Argus)

Russian oil companies have reportedly discussed extending the current production agreement with OPEC for 6 months. (Newswires)

21 Nov 2017 - 22:02- EnergyBank Speaker- Source: Newswires

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