Asia Trading Update, Currencies, Gold, Oil, Equities

Shayne Heffernan
shayne@heffcap.com

Posted on: May 4th, 2012

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Live Asia Update from LTN and HCM Leaders in Financial News and Services in Asia

Energy producers lost 1.3 percent, the biggest drop among 10 industries in the index.

South Korea’s Kospi index retreated 0.3 percent and Australia’s S&P/ASX 200 Index (AS51) slid 0.7 percent. Japanese markets are closed for a holiday.

The Hang Seng Index lost 0.7 percent for a second day of losses. Sun Hung Kai Properties Ltd. slipped 0.9 percent. Hong Kong’s biggest developer said former chairman Walter Kwok was arrested by the anti-corruption commission, widening a probe that includes his brothers and a former government official.

The euro was set for the biggest weekly decline in a month amid concern changes in leadership at elections in France and Greece this weekend will derail the region’s austerity efforts. The currency was little changed at $1.3151 today. It has lost 0.8 percent this week.

European equity futures fell, Asian stocks slid the most in two weeks and South Korea’s won slid as Australia’s central bank cut its economic growth forecast and investors awaited the monthly U.S. jobs report. Copper gained.

Euro Stoxx 50 Index futures declined 0.5 percent as of 7:09 a.m. in London. The MSCI Asia Pacific Excluding Japan Index (MXAPJ) sank 0.6 percent and Standard & Poor’s 500 Index futures were little changed. The won retreated against all of its 16 major peers. The Markit iTraxx Asia index, which tracks the cost of insuring bonds against default, climbed to a one-week high. Copper increased 0.4 percent amid a rally in industrial metals.

Hong Kong’s total retail sales value in March is estimated at 36.6-B HK Dollars (about US$4.72-B), increasing 17.3% Y-Y, the city’s Census and Statistics Department announced Thursday.

After netting out the effect of price changes over the period, the volume of total retail sales increased 13.4% in March compared with a year earlier, the department said. The relevant components of the Consumer Price Index are used as deflators.

The revised estimate of the value of total retail sales in February increased 15.6% Y-Y to 33.8-B HK Dollars, while the volume of total retail sales increased 10.1%.

For Q-1 of Y 2012, total retail sales rose 15.9% in value and 10.7% in volume over the same period last year. Based on seasonally adjusted series, the volume of total retail sales decreased 0.9% in Q-1 of Y 2012 compared with the preceding Quarter.

The volume of sales of miscellaneous consumer durable goods in March increased the most by 84.7% on Y-Y comparison. The volume of sales of furniture and fixtures decreased the most, with a 10.4% fall.

A government spokesman noted that retail sales expanded strongly in March, reflecting the fairly buoyant tourist spending and local consumer sentiments.

The spokesman added that looking ahead, the favorable labor market conditions and prevailing strength of inbound tourism should continue to render support to the retail business in the near term.

The precious Yellow metal extends losing streak to 4th session

The settlement under 1,640 oz could spell more losses for the metal. The next level of support is art 1,620 oz.

Gold for June delivery dropped 19.20, or 1.2%, to settle at 1,634.80 an ounce on the Comex division of the New York Merc. That was Gold’s lowest since 23 April, and the 4th session in a row that Gold has finished lower.

Jobless claims are down, which is a good thing, but gold investors correlated that with potential for quantitative easing (QE-3) and that probability is reduced after the jobs report and Bearish for Gold.

The USD has been trending higher since the initial sell off following ECB head Mario Draghi’s press conference.

The index fell back to the unchanged mark, but has been working its way higher after failing to puncture the flat line. Currently, the index is up 0.2% near 79.25.

EUR-USD is -5 pips at 1.3150 after the European Central Bank held its benchmark interest rate at 1.00%.

Mr. Draghi’s press conference seemed a bit hawkish to some, and that made for a sharp spike in the single currency up to 1.3180; sellers soon took control and have dropped it back into negative territory. The 1.3000/1.3050 support level will be watched closely in the coming days.

EuroZone retail sales are due out Friday morning.

GBP-USD is -20 pips at 1.6175 as action slides back towards session lows. Short-term support in the 1.6150 area has held in each of the past two days with stronger support lying underneath near 1.6000/1.6050.

USD-CHF is +10 pips at .9140 as trade remains rather lackluster. Earlier strength saw the pair test resistance near .9175, but selling overwhelmed the Bulls. Meanwhile, EURCHF is flat at 1.2015, and remains just above the Swiss National Bank’s 1.2000 floor.

USD-JPY is +20 pips at 80.30 as trade continues to struggle near 80.50 resistance. Thursday’s small gains have the pair higher for a 3rd consecutive session after buyers provided support at its 100-Day Moving Average (79.60).

Japanese banks are closed in observance of Greenery Day.

AUD-USD is -70 pips at 1.0250 as support in the area is under pressure.

The hard currency is on track for a fourth day of losses, and could potentially see its lowest close since the middle of January.

The Reserve Bank of Australia’s Monetary Policy Statement will be released late tonight.

Samsung Electronics unveiled a new top-of-the-range Galaxy smartphone in London on Thursday, updating the most direct rival to Apple's iPhone with a larger touch screen and more powerful processor. The South Korean technology group, which overtook Finnish company Nokia (NOK1V.HE) as the world's biggest cellphone maker earlier this year, said the new Galaxy SIII model would go on sale in some markets in late May and around the world from June. Last week, Samsung (005930.KS) reported a record $5.2 billion quarterly profit, boosted by Galaxy smartphone range whose sales outstripped the iPhone.

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Crude Oil (Jun 12) intraday: the downside prevails.

Pivot: 104.00
Our Preference: SHORT positions below 104 with 102.35 & 101.8 as next targets.
Alternative scenario: The upside penetration of 104 will call for a rebound towards 104.4 & 104.9.
Comment: the RSI is bearish and calls for further downside.