Posted at 22 July 2020 / Categories Market Roundups
Market Roundup
Economic Data Ahead
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FX Beat
DXY: The dollar index held firm near a 4-/1/2 month low, undermined by concern that Republicans and Democrats are struggling to reach consensus on the next round of U.S. economic stimulus measures. The greenback against a basket of currencies traded flat at 95.16, having touched a low of 95.05 on Tuesday, its lowest since Marh 6.
EUR/USD: The euro rallied to an over 1-1/2 year peak after European leaders agreed a stimulus plan to fuel recovery from the economic damage caused by the COVID-19 pandemic. The 27-member bloc narrowed their differences and agreed a 750 billion euro recovery fund and a 1.1 trillion euro 2021-2027 budget to help the continent recover from its deepest recession since World War Two. The European currency traded 0.05 percent up at 1.1532, having touched a high of 1.1547 earlier, its highest since Jan 2019. Investors’ attention will remain on a series of data from Eurozone economies, ahead of the U.S. housing price index and existing home sales. Immediate resistance is located at 1.1570, a break above targets 1.1610. On the downside, support is seen at 1.1462, a break below could drag it below 1.1402.
USD/JPY: The dollar steadied after tumbling to a 1-week low in the prior session as progress in developing vaccines for the novel coronavirus boosted investor's appetite for riskier assets. The major was trading 0.1 percent up at 106.86, having hit a low of 106.67 on Tuesday, its lowest since July 15. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. housing price index and existing home sales. Immediate resistance is located at 107.03 (5-DMA), a break above targets 107.22 (21-DMA). On the downside, support is seen at 106.63, a break below could take it near at 106.38.
GBP/USD: Sterling declined from an over 1-month high hit in the prior session, amid fears of prospect of a hung parliament in a general election. The major traded 0.1 percent down at 1.2717, having hit a high of 1.2768 on Tuesday, it’s highest since June 10. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2770, a break above could take it near 1.2820. On the downside, support is seen at 1.2663, a break below targets 1.2619 (5-DMA). Against the euro, the pound was trading 0.2 percent down at 90.66 pence, having hit a high of 90.01 on Tuesday, it’s highest since July 13.
AUD/USD: The Australian dollar surged to an over 1-year high after data showed the country's retail sales rose 2.4 percent in June, on top of a record 16.9 percent jump in May. The major was also supported by Reserve Bank of Australia Governor Phil Lowe's comments, citing that the economy had turned the corner and showed little inclination to ease policy again. The Aussie trades 0.3 percent up at 0.7147, having hit a high of 0.7152 earlier, it’s highest since late April 2019. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7192, a break above could take it near 0.7232. On the downside, support is seen at 0.7107, a break below targets 0.7050.
Equities Recap
Asian shares rose amid hopes that vaccines against the COVID-19 disease might be ready by the end of the year.
Tokyo's Nikkei declined 0.6 percent to 22,751.61 points, Australia's S&P/ASX 200 index declined 1.3 percent to 6,075.10 points. South Korea's KOSPI fell 0.05 percent to 2,228.5 points.
Shanghai composite index rose 0.4 percent to 3,333.63 points, while CSI 300 index traded 0.5 percent up at 4,714.91 points.
Hong Kong’s Hang Seng traded 0.5 percent lower at 25,494.17 points. Taiwan shares added 0.6 percent to 12,473.27 points.
Commodities Recap
Crude oil prices declined as industry data showed a bigger- than-expected inventory build in the United States where coronavirus cases continue to climb. International benchmark Brent crude was trading 0.05 percent down at $43.96 per barrel by 0545 GMT, having hit a high of $44.86 on Tuesday, its highest since March 9. U.S. West Texas Intermediate was trading 0.1 percent higher at $41.57 a barrel, after rising as high as $42.49 earlier, its highest since March 6.
Gold prices rallied more than 1 percent to its highest in nearly 9-years, supported by a weaker dollar and expectations of more stimulus to revive pandemic-hit economies. Spot gold was trading 0.9 percent higher at $1,860.03 per ounce by 0556 GMT, having hit a high of $1,865.83 earlier, its highest since September 2011. U.S. gold futures rose 0.7 percent to $1,856.80.
Treasuries Recap
The U.S. Treasury yields edged lower, with the benchmark 10-year note yield trading at 0.605 percent.