Posted at 14 July 2020 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index nudged up as a resurgence of novel coronavirus infections caused some areas to place new restrictions on business activity. The greenback against a basket of currencies traded 0.05 percent higher at 96.57, having touched a low of 96.24 on Thursday, its lowest since June 11.
EUR/USD: The euro steadied after rising to a 1-month peak in the prior month, as investors hope the EU 27 will make progress in agreeing a 750 billion euro ($849 billion) COVID-19 recovery fund.. The European currency traded flat at 1.1343, having touched a high of 1.1374 on Monday, its highest since June 11. Investors’ attention will remain on a series of data from Eurozone economies, EZ industrial production and ZEW Survey., ahead of the U.S. consumer price index and Fed Brainard's speech. Immediate resistance is located at 1.1383, a break above targets 1.1422. On the downside, support is seen at 1.1305 (5-DMA), a break below could drag it below 1.1280 (10-DMA).
USD/JPY: The dollar declined as renewed concerns about diplomatic tension between the United States and China and rising coronavirus cases put a dent in risk appetite. A senior U.S. State Department official told Reuters that President Donald Trump’s administration plans to soon scrap a 2013 agreement between U.S. and Chinese auditing authorities. The major was trading 0.05 percent down at 107.26, having hit a low of 106.63 on Monday, its lowest since June 26. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. consumer price index and Fed Brainard's speech. Immediate resistance is located at 107.56, a break above targets 107.90. On the downside, support is seen at 107.04, a break below could take it near at 106.78.
GBP/USD: Sterling fell to a 1-week low as Britain’s imminent exit from the European Union weighed on investors’ sentiment. The major traded 0.1 percent down at 1.2545, having hit a high of 1.2669 on Thursday, it’s highest since June 16. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2592, a break above could take it near 1.2623. On the downside, support is seen at 1.2485 (21-DMA), a break below targets 1.2456. Against the euro, the pound was trading 0.05 percent down at 90.41 pence, having hit a low of 90.44 earlier, it’s highest since July 7.
AUD/USD: The Australian dollar rose, halting a 3-day losing streak after a measure of the country's business conditions showed a sharp recovery in activity and confidence in June as much of the economy reopened from coronavirus lockdowns. National Australia Bank’s index of business conditions bounced to -7 in June, from -24 in May and -34 in April, while the measure of business confidence picked up to +1 in June, from -20 in May and -46 in April. The major trades 0.1 percent up at 0.6949, having hit a high of 0.7001 on Thursday, it’s highest since June 11. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6969, a break above could take it near 0.7001. On the downside, support is seen at 0.6910 (21-DMA) a break below targets 0.6867.
Equities Recap
Asian shares declined as flaring U.S.-China tensions and fresh coronavirus restrictions in California weakened investor optimism.
MSCI's broadest index of Asia-Pacific shares outside Japan slumped 1.2 percent.
Tokyo's Nikkei eased 0.8 percent to 22,587.01 points, Australia's S&P/ASX 200 index fell 0.6 percent to 5,941.10 points. South Korea's KOSPI slumped 0.2 percent to 2,181.35 points.
Shanghai composite index eased 0.7 percent to 3,418.71 points, while CSI 300 index traded 0.8 percent down at 4,814.68 points.
Hong Kong’s Hang Seng traded 1.3 percent lower at 25,437.67 points. Taiwan shares added 0.05 percent to 12,209.01 points.
Commodities Recap
Crude oil prices declined, weighed down by worries that new restrictions on businesses to stem surging U.S. coronavirus cases could threaten fuel demand recovery and expectations that OPEC+ might ease output cuts from August in an upcoming meeting. International benchmark Brent crude was trading 0.6 percent down at $42.01 per barrel by 0527 GMT, having hit a low of $41.29 on Friday, its lowest since July 1. U.S. West Texas Intermediate was trading 0.7 percent lower at $39.30 a barrel, after falling as low as $38.56 earlier, its lowest since June 29.
Gold prices slumped below the key $1,800 level, as the U.S. dollar strengthened, although worries over surging coronavirus cases globally and U.S.-China tensions limited losses. Spot gold was trading 0.2 percent down at $1,798.31 per ounce by 0540 GMT, having hit a high of $1,818.09 on Wednesday, its highest since September 2011. U.S. gold futures fell 0.8 percent to $1,799.60.
Treasuries Recap
The Japanese government bond prices edged up amid renewed concerns about U.S. coronavirus infections. The benchmark 10-year JGB futures rose 0.07 point to 152.14, while in the cash bond market, the 10-year JGB yield fell 0.5 basis point to 0.020 percent. The 20-year JGB yield fell 0.5 basis point to 0.420 percent, while the 30-year JGB yield was flat at 0.595 percent.