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21 May 2014
Asia EM Express: Contract on Russian gas deliveries to China on hold due to disagreement on pricing
FXStreet (Łódź) - Russian President Vladimir Putin and Chinese President Xi Jinping failed to finalize the crucial energy deal during their meeting in Shanghai on Tuesday, as they were unable to agree on the price of the gas which Gazprom was to supply. They only pledged to strengthen their “comprehensive energy co-operation partnership,” and signed other bilateral accords.
Nevertheless, according to the RIA Novosti news agency, Vladimir Putin's spokesperson Dmitry Peskov assured that the negotiations continued and that “the deal could be signed at any moment.”
The failure to strike the gas deal comes as a blow to Moscow which seeks to reduce its dependence on gas exports to Europe in the light of the increased political tensions with the West, brought about by the Russian-Ukrainian conflict.
Economic data
With no important data published on Wednesday in Asia emerging markets, investors await China's preliminary HSBC Manufacturing PMI, the Malaysian and Hong Kong CPI as well as the the Taiwanese Unemployment Rate, to be released on Thursday.
China's Flash Manufacturing PMI for May should „increase to 48.3 from prior 48.1 in April,” in the opinion of Tim Condon from ING. „A glance at where US Treasury yields are is convincing evidence that people are worried about growth. We think this heightens the risk to financial markets should we tomorrow’s data surprise on the downside,” the analyst remarks.
Prashant Newnaha, Asia-Pacific Macro Strategist at TD Securities, expects Malaysian April CPI to come in at 3.5% year-on-year, and adds that “although inflation may not accelerate further in April, the trend remains skewed to the upside, which should warrant a certain degree of policy normalization from the BNM.”
Technicals
On Wednesday USD/CNY was down 0.04% at 6.2352.
On Tuesday the USD/CNY daily FXStreet Trend Index was strongly bullish, with the OB/OS Index neutral. RSI was at 55 at the last close, and has fallen to 22 so far today. Daily 2-StDev Volatility Bandwidth was shrinking at 118 pips, with ATR (14) shrinking at 88 pips. The 1D 200 SMA was at 6.1241, while the 1D 20 EMA was at 6.2340.
Nevertheless, according to the RIA Novosti news agency, Vladimir Putin's spokesperson Dmitry Peskov assured that the negotiations continued and that “the deal could be signed at any moment.”
The failure to strike the gas deal comes as a blow to Moscow which seeks to reduce its dependence on gas exports to Europe in the light of the increased political tensions with the West, brought about by the Russian-Ukrainian conflict.
Economic data
With no important data published on Wednesday in Asia emerging markets, investors await China's preliminary HSBC Manufacturing PMI, the Malaysian and Hong Kong CPI as well as the the Taiwanese Unemployment Rate, to be released on Thursday.
China's Flash Manufacturing PMI for May should „increase to 48.3 from prior 48.1 in April,” in the opinion of Tim Condon from ING. „A glance at where US Treasury yields are is convincing evidence that people are worried about growth. We think this heightens the risk to financial markets should we tomorrow’s data surprise on the downside,” the analyst remarks.
Prashant Newnaha, Asia-Pacific Macro Strategist at TD Securities, expects Malaysian April CPI to come in at 3.5% year-on-year, and adds that “although inflation may not accelerate further in April, the trend remains skewed to the upside, which should warrant a certain degree of policy normalization from the BNM.”
Technicals
On Wednesday USD/CNY was down 0.04% at 6.2352.
On Tuesday the USD/CNY daily FXStreet Trend Index was strongly bullish, with the OB/OS Index neutral. RSI was at 55 at the last close, and has fallen to 22 so far today. Daily 2-StDev Volatility Bandwidth was shrinking at 118 pips, with ATR (14) shrinking at 88 pips. The 1D 200 SMA was at 6.1241, while the 1D 20 EMA was at 6.2340.