ASIAN session review: Yen retreats

Data released (actual, consensus, previous):  

01:30 GMT Australia Building Permits (MoM) (Jun)  -6.9%    2.3%    -4.3%    

01:30 GMT Australia Building Permits (YoY) (Jun)  -13.0%   _     -2.2%    

03:05 GMT Australia RBA's Governor Glenn Stevens Speech                       

06:00 GMT Germany Gfk Consumer Confidence Survey (Aug)  7.0    6.9    6.8   

09:00 GMT EMU Consumer Confidence (Jul) -17.4    -17.4    -18.8        

09:00 GMT EMU Business Climate (Jul)  -0.53    -0.55    -0.67       

09:00 GMT EMU Economic Sentiment Indicator (Jul)  92.5    92.6    91.3        

09:00 GMT EMU Services Sentiment (Jul) -7.8    -9.0    -9.5        

09:00 GMT EMU Industrial Confidence (Jul)  -10.6  -10.3    -11.2

 

The yen weakened for the first time in four days versus the dollar after Japan’s industrial production slid by the most in two years.

 

Australia’s dollar slumped after Reserve Bank Governor Glenn Stevens said the inflation outlook provided room for lower interest rates if required.

 

The U.S. Dollar Index rose for a second day before the Federal Open Market Committee starts a two-day meeting today.

 

EURO:

The measure of consumer confidence in Germany in terms of the Gfk Survey up ticked to 7.0 for the month of August, slightly above expectations at 6.9.

 

EUR/USD consolidates under $1.3300, with closest support coming  at $1.3255 (high Jun 21).  Below $1.3160 initial support is around $1.3140 and  $1.3070/60 (Jul 18 lows). Above $1.3300 (Jun 6 high) gains will extend to and $1.3325.

 

POUND:

The pound has eased Tuesday.

 

GBP/USD off session lows on $1.5314 with initial resistance remains at $1.5416 (Jul 29 high).  Initial support remains at session lows, then - at $1.5180 (Tuesday’s lows) with a break lower widens losses to $1.5150 (Jul 18 lows) and $1.5080 (Jul 17 lows). Above  $1.5416 resistance is near $1.5480 (Jun 25 highs).

 

YEN:

The yen weakened Tuesday. Official data released earlier Tuesday showed Japan’s industrial production unexpectedly fell a seasonally adjusted 3.3% in June from the level in May. Japanese household spending also declined, though the monthly unemployment rate eased to 3.9% from 4.1%.

 

USD/JPY remains above Y97.65/50 (50% Fibo from Y93.80 - Y101.50, also the lower bound of the channel from Jul 7 and session lows). If break under support comes at Y96.75 (61.8%). Initial resistance is near session highs at Y98.50, above - at Y98.80/90 (ex-support). Further resistance is around Y100.47 (Thursday’s high).

 

DATA AHEAD:

EMU Jul Business Climate is due to come at 09:00 GMT. The same time EMU releases Jul Consumer Confidence (-17.4 expected vs -18.8), Economic Sentiment Indicator (93.0 expected vs 91.3) and Industrial Confidence (-10.3 vs -11.2).

 

At 12:30 GMT Canada issues Jun Industrial Product Pricem followed by US Jul Consumer Confidence at 14:00 GMT. Analysts expect 81.5 after 81.4.

 

 

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ASIA STOCKS rebound

Japanese and mainland Chinese stocks rebounded from a string of losses Tuesday, with a weakened yen lifting exporters in Tokyo, while Australian shares climbed after the central bank governor hinted at further interest rate cuts.

 

Japan’s Nikkei Stock Average  jumped 1.5%, snapping a four-day losing streak that pulled the benchmark to its lowest level in more than a month on Monday.

 

South Korea’s Kospi  ended 0.9% higher and the Shanghai Composite rose 0.7%, while Hong Kong’s Hang Seng Index gained 0.5%.

 

In Australia, the S&P/ASX 200 overcame early losses to end little changed, and the local currency tumbled after a speech by Reserve Bank of Australia Gov. Glenn Stevens. Stevens said recent data don’t appear to shift the central bank’s assessment that the inflation outlook left some scope to ease its policy further, if needed.

 

Most banks erased losses in Sydney after Gov. Stevens’s speech, with National Australia Bank Ltd.  and Westpac Banking Corp.   rising 0.1% each, while Commonwealth Bank of Australia  rose 0.2%.

 

Shares of Woolworths Ltd.   dropped 1.6% after the retailer reported only a modest sales growth in the fiscal fourth quarter.

 

Shares of Tata Motors Ltd.   fell 1.5% and aluminum producer Hindalco Industries Ltd. gave up 4.5%, while ICICI Bank Ltd.  inched up 0.7%.

 

In Japan, a weakened yen provided a lift to shares of some exporters after recent heavy losses. Shares of Isuzu Motors Ltd.  added 5% and Kobe Steel Ltd.  jumped 6.9%.

 

Sony Corp.  climbed 2.9% ahead of its earning results due on Thursday.

 

Sumitomo Mitsui Financial Group Inc. ended 0.9% higher after its quarterly profit more than doubled.

 

On the downside, shares of Hitachi Construction Machinery Co.  dropped 3% after its results fell short of expectations.

 

Official data released earlier Tuesday showed Japan’s industrial production unexpectedly fell a seasonally adjusted 3.3% in June from the level in May. Japanese household spending also declined, though the monthly unemployment rate eased to 3.9% from 4.1%.

 

The advance in Chinese equities was driven by gains in the beaten-down property sector. Shares of Gemdale Corp.  jumped 3% and Poly Real Estate Group Co.  added 1.9% in Shanghai, the yuan-denominated A shares of China Vanke Co. gained 1.2% in Shenzhen, and China Resources Land Ltd.  rose 1.5% in Hong Kong.

 

 

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