Posted at 21 July 2020 / Categories Market Roundups
Market Roundup
Economic Data Ahead
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FX Beat
DXY: The dollar index slumped to multi-month lows amid cases surging in the United States, with market attention turning to the likelihood of a new fiscal package. The greenback against a basket of currencies traded 0.2 percent lower at 95.65, having touched a low of 95.2 earlier, its lowest since June 10.
EUR/USD: The euro steadied after rising to a 4-1/2 year peak in the prior session as European countries agreed on a rescue package for the bloc’s coronavirus-hit economies. The EU deal delivers a 750 billion euro recovery fund which French President Emmanuel Macron said can meet the challenge of the coronavirus crisis. The European currency traded flat at 1.1445, having touched a high of 1.1467 earlier, its highest since March 9. Investors’ attention will remain on a series of data from Eurozone economies ahead of the Chicago Fed National Activity Index. Immediate resistance is located at 1.1510, a break above targets 1.1570. On the downside, support is seen at 1.1390, a break below could drag it below 1.1359 (10-DMA).
USD/JPY: The dollar rose, extending previous session gains, following encouraging results from several COVID-19 vaccine trials. The major was trading 0.1 percent up at 107.30, having hit a high of 107.54 on Monday, its highest since July 8. Investors’ will continue to track the broad-based market sentiment, ahead of the Chicago Fed National Activity Index. Immediate resistance is located at 107.80, a break above targets 108.20. On the downside, support is seen at 106.93, a break below could take it near at 106.38.
GBP/USD: Sterling rallied to an over 1-month peak in the wake of the EU Summit progress and ahead of fresh Brexit talks beginning on Tuesday. The major traded 0.3 percent up at 1.2695, having hit a high of 1.2698 earlier, it’s highest since June 11. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2731, a break above could take it near 1.2755. On the downside, support is seen at 1.2624, a break below targets 1.2584 (10-DMA). Against the euro, the pound was trading 0.3 percent up at 90.17 pence, having hit a low of 91.37 on Monday, it’s lowest since June 30.
AUD/USD: The Australian dollar rallied to a 1-1/2 month high after the RBA Governor Philip Lowe said Australia’s monetary policy would remain accommodative for as long as necessary and added that although he would prefer a cheaper Aussie dollar, its 27 percent recovery from March lows was supported by fundamentals. The major trades 0.4 percent up at 0.7045, having hit a high of 0.7047 earlier, it’s highest since June 10. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7064, a break above could take it near 0.7102. On the downside, support is seen at 0.6973 (10-DMA) a break below targets 0.6938 (21-DMA).
Equities Recap
Asian shares advanced to a 5-month high after European Union leaders agreed on a massive stimulus plan for their coronavirus-blighted economies.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.9 percent.
Tokyo's Nikkei surged 0.7 percent to 22,884.22 points, Australia's S&P/ASX 200 index ralled 2.6 percent to 6,156.30 points. South Korea's KOSPI gained 1.4 percent to 2,228.83 points.
Shanghai composite index rose 0.2 percent to 3,320.89 points, while CSI 300 index traded 0.2 percent up at 4,691.04 points.
Hong Kong’s Hang Seng traded 2.1 percent higher at 25,581.07 points. Taiwan shares added 1.8 percent to 12,397.55 points.
Commodities Recap
Crude oil prices surged as investors gauged hopes for a recovery in oil demand against fears of new lockdowns due to a growing number of coronavirus cases. International benchmark Brent crude was trading 0.6 percent up at $43.44 per barrel by 0603 GMT, having hit a high of $43.82 on Wednesday, its highest since June 23. U.S. West Texas Intermediate was trading 0.6 percent higher at $41.03 a barrel, after rising as high as $41.24 on Wednesday, its highest since June 23.
Gold prices rose, hovering near a 9-year peak hit in the previous session, as worries over a spike in COVID-19 cases and expectations for inflation from more economic stimulus measures boosted the metal's safe-haven appeal. Spot gold was trading 0.1 percent at $1,819.41 per ounce by 0613 GMT, having hit a high of $1,820.64 in the prior session, its highest since September 2011. U.S. gold futures were little changed at $1,817.80.
Treasuries Recap
The U.S. Treasury yields edged lower, with the benchmark 10-year note yield trading at 0.615 percent.