Posted at 29 July 2020 / Categories Market Roundups
Market Roundup
• Fed leaves rates unchanged, promised more support
• Fed's Powell says continued fiscal and monetary support needed
• Fed says committed to low rates, using "full range of tools
• US Wholesale Inventories (MoM) -2.0%, -1.2% previous
• US June Goods Trade Balance -70.64B, -75.26B previous
• US June Retail Inventories Ex Auto -0.8%, -1.6% previous
• Seevol Cushing Storage Report 0.426M, 0.769M previous
• US June Pending Home Sales (MoM) 16.6%, 15.0% forecast,44.3% previous
• US June Pending Home Sales Index 116.1, 99.6 previous
• US Gasoline Inventories 0.654M, -0.733M forecast, -1.802M previous
• US Crude Oil Inventories-10.612M, 0.357M forecast, 4.892M previous
• US Fed Interest Rate Decision 0.25%,0.25% forecast, 25 previous
Looking Ahead - Economic Data (GMT)
• 22:45 New Zealand June Building Consents (MoM) 35.6% previous
• 23:50 Japan Foreign Investments in Japanese Stocks 67.2B previous
• 23:50 Japan Foreign Bonds Buying 1,065.7B previous
• 23:50 Japan June Retail Sales (YoY)
• 01:00 New Zealand Jul NBNZ Own Activity -25.9% previous
• 01:00 New Zealand Jul ANZ Business Confidence -34.4 previous
Looking Ahead - Economic events and other releases (GMT)
• No significant events
Currencies Summaries
EUR/USD: The euro strengthened against dollar on Wednesday as dollar continued its downward march after the Fed’s statement. The Fed held policy largely steady at its two-day policy meeting this week. The Fed’s policy statement on Wednesday directly tied the economic recovery to resolution of a health crisis whose direction remains much in doubt. All FOMC members voted to leave the target range for short-term interest rates at between 0% and 0.25%.Immediate resistance can be seen at 1.1828 (23.6% fib), an upside break can trigger rise towards 1.1900 (Psychological level).On the downside, immediate support is seen at 1.1740 (5 DMA), a break below could take the pair towards 1.1701(38.2% fib).
GBP/USD: Sterling strengthened against dollar on Wednesday as the dollar weakened over concerns about the impact of the coronavirus pandemic. Dollar also weakened as Federal Reserve kept its monetary policy steady. The Fed repeated a pledge to use its “full range of tools” to support the U.S. economy and keep interest rates near zero for as long as it takes to recover from the fallout from the coronavirus outbreak. The pound rose to above $1.3000, close to its pre-coronavirus levels. Immediate resistance can be seen at 1.3030 (23.6% fib), an upside break can trigger rise towards 1.3125 (10 March high).On the downside, immediate support is seen at 1.2926 (5 DMA), a break below could take the pair towards 1.2822 (9 DMA).
USD/CAD: The Canadian dollar rose against its U.S. counterpart on Wednesday as the Federal Reserve’s dovish stance weighed broadly on the greenback. Higher prices for oil, one of Canada’s major exports, added to support for the loonie. U.S. crude oil futures settled up 0.6 per cent at $41.27 a barrel after a steep drop in U.S. crude inventories, but another record day for coronavirus cases worldwide kept gains in check. The Canadian dollar was trading 0.2 per cent higher at 1.3344 to the U.S. dollar . Immediate resistance can be seen at 1.3362 (5 DMA), an upside break can trigger rise towards 1.3404 (9DMA).On the downside, immediate support is seen at 1.3316 (Daily low), a break below could take the pair towards 1.3300 (Psychological level).
USD/JPY: The dollar declined against the Japanese yen on Wednesday after the Federal Reserve repeated a pledge to use its “full range of tools” to support the U.S. economy and keep interest rates near zero for as long as it takes to recover from the fallout from the coronavirus outbreak. At the end of its two-day policy meeting the Fed said it maintained its interest rate target range until it is confident the economy has weathered the virus and is on track to achieve its maximum employment and price stability goals. Strong resistance can be seen at 105.17 (23.6% fib), an upside break can trigger rise towards 105.65 (5 DMA).On the downside, immediate support is seen at 104.81 (Daily low), a break below could take the pair towards 104.00 (Psychological level).
Equities Recap
Europe’s main stocks benchmark closed nearly flat on Wednesday, but a flurry of earnings reports drove big swings in individual stocks.
UK's benchmark FTSE 100 closed up by 0.04 percent, Germany's Dax ended down by 0.10 percent, France’s CAC finished the day up by 0.61 percent.
U.S. stocks closed higher on Wednesday, adding to gains after the Federal Reserve repeated a pledge to use its “full range of tools” to support the economy but cautioned that the outlook “will depend significantly on the course of the virus.”.
Dow Jones closed up by 0.61% percent, S&P 500 closed up by 1.24% percent, Nasdaq settled up by 1.35% percent.
Treasuries Recap
Longer-term U.S. Treasury yields moved slightly higher on Wednesday after the Federal Reserve renewed its pledge to keep interest rates near zero to help the economy recover from the COVID-19 pandemic.
The benchmark 10-year yield was almost unchanged at 0.579%, while the yield on the 30-year note was up 1.9 basis points at 1.2424%.
Commodities Recap
Oil prices rose on Wednesday after a steep drop in U.S. crude inventories, but another record day for coronavirus cases worldwide kept gains in check.
Brent crude futures settled at $43.75 a barrel, up 53 cents, or 1.2%. U.S. West Texas Intermediate crude futures settled at $41.27 a barrel, gaining 23 cents, or 0.6%.
Gold prices gained in volatile trade on Wednesday, nearing the last session's record peak at one point, after the U.S. Federal Reserve vowed to keep interest rates near zero as the rapid rise in coronavirus cases dampens hopes for an economic recovery.
Spot gold was up 0.5% at $1,969.16 per ounce by 4:20 p.m. EDT (2020 GMT), while U.S. gold futures settled 0.5% higher at $1,953.4.