Posted at 17 August 2020 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index declined as investors cautiously awaited the Federal Reserve minutes from last month’s meeting, due to be released on Wednesday. Markets speculate the Fed will adopt an average inflation target, which would seek to push inflation above 2 percent for some time to make up for the years it has run below it. The greenback against a basket of currencies traded 0.2 percent down at 92.93, having touched a low of 92.93 earlier, its lowest since August 7.
EUR/USD: The euro surged, extending gains for the fourth straight session, after data released last week showed euro zone’s trade surplus with the rest of the world increased in June to 21.2 billion euros ($25 billion) as the bloc’s decline in imports of goods outpaced the fall of exports. The European currency traded 0.1 percent higher at 1.1853, having touched a high of 1.1864 on Thursday, its highest since August 3. Investors’ attention will remain on a series of data from Eurozone economies, ahead of the U.S. NAHB Housing Market Index, and NY Empire State Manufacturing Index. Immediate resistance is located at 1.1883, a break above targets 1.1910. On the downside, support is seen at 1.1800 (10-DMA), a break below could drag it below 1.1782 (5-DMA).
USD/JPY: The dollar steadied after tumbling from a 3-week peak in the prior session, as investors were relieved by a delay in the review of the U.S.-China trade pact which left the deal intact. On Friday, the pair lost nearly 0.4 percent as U.S. Republicans and Democrats struggled to reach an agreement on the cost of fiscal stimulus measures. The major was trading 0.1 percent up at 106.62, having hit a high of 107.05 on Thursday, its highest since July 23. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. NAHB Housing Market Index, and NY Empire State Manufacturing Index. Immediate resistance is located at 106.79 a break above targets 107.10. On the downside, support is seen at 106.21, a break below could take it near at 106.02.
GBP/USD: Sterling declined, retreating from a 1-week high scaled in the previous session, as investors expect a lag in Britain’s labour market recovery later in the year, after the government’s furlough scheme ends in October that has allowed millions to retain their jobs. Moreover, Brexit concerns also weighed on the pair, with Britain due to leave the European Union on December 31 whether or not a deal has been reached. The major traded 0.1 percent down at 1.3086, having hit a high of 1.3143 on Friday, it’s highest since August 7. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3125, a break above could take it near 1.3147. On the downside, support is seen at 1.3041, a break below targets 1.3005. Against the euro, the pound was trading 0.2 percent down at 90.59 pence, having hit a low of 90.60 earlier, it’s lowest since July 31.
AUD/USD: The Australian dollar rose to a 10-day peak, as investors slightly improved after the United States and China postponed a Saturday review of their Phase 1 trade deal. The Aussie trades 0.2 percent higher at 0.7182, having hit a high of 0.7196 earlier, it’s highest since August 7. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7200 a break above could take it near 0.7230. On the downside, support is seen at 0.7148, a break below targets 0.7123.
Equities Recap
Asian shares gained as the United States and China gear up to review their January deal after a prolonged trade war.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5 percent.
Tokyo's Nikkei declined 0.7 percent to 23,126.63 points, Australia's S&P/ASX 200 index eased 0.8 percent to 6,076.40 points.
Shanghai composite index rose 1.9 percent to 3,426.07 points, while CSI 300 index traded 2.1 percent up at 4,801.78 points.
Hong Kong’s Hang Seng traded 0.7 percent higher at 25,355.13 points. Taiwan shares added 1.3 percent to 12,956.11 points.
Commodities Recap
Crude oil prices surged as China’s plans to ship in large volumes of U.S. crude in August and September outweighed concerns over a slowdown in demand recovery. International benchmark Brent crude was trading 0.5 percent up at $45.15 per barrel by 0525 GMT, having hit a high of $45.76 on Tuesday, its highest since August 5. U.S. West Texas Intermediate was trading 0.5 percent higher at $42.40 a barrel, after rising as high as $42.92 on Tuesday, its highest since August 5.
Gold prices eased, extending previous session losses as caution crept in ahead of the release of U.S. Federal Reserve minutes later this week. Spot gold was trading 0.1 percent down at $1,943.57 per ounce by 0527 GMT, having hit a low of $1862.89 on Wednesday, its lowest since July 22. Last week gold fell 4.5 percent, in its biggest decline since March as investors reassessed their positions after bullion retreated from a record peak of $2,075.28 scaled on August 7. U.S. gold futures were flat at $1,950.50.
Treasuries Recap
The U.S. Treasury yields declined, with the benchmark 10-year note yield trading at 0.695 percent.