Posted at 17 August 2020 / Categories Market Roundups
Market Roundup
•U.S.-China talks postponement welcomed, but uncertainty looms
•U.S. Federal Reserve minutes due on Wednesday
•Palladium rises as much as 3%
•EU Jul Reserve Assets Total 922.98B, 904.94B previous
Looking Ahead – Economic Data (GMT)
•12:30 Canada Jun Foreign Securities Purchases by Canadians 13.37B previous
•12:30 Canada Jun Foreign Securities Purchases 22.41B previous
•12:30 US Aug NY Empire State Manufacturing Index 15.00, 17.20 previous
•13:00 French 12-Month BTF Auction -0.565% previous
•13:00 French 6-Month BTF Auction-0.631% previous
•13:00 French 3-Month BTF Auction-0.576% previous
•13:00 Russia Jul Industrial Production (YoY) -8.0% forecast, -9.4% previous
•14:00 US Aug NAHB Housing Market Index 73 forecast, 72 previous
• 15:05 US Jul Industrial Production (YoY) -8.0% forecast, -9.4% previous
• 15:30 US 3-Month Bill Auction 0.105% previous
• 15:30 US 6-Month Bill Auction 0.120% previous
Looking Ahead - Events, Other Releases (GMT)
•16:30 German Buba Beermann Speaks
Currencies Summaries
EUR/USD: The euro strengthened against dollar on Monday as euro buoyed by a weaker dollar as investors awaited U.S. Federal Reserve minutes due on Wednesday. The minutes from the Fed's last policy meeting are due on Wednesday, with markets looking for any hints of a possible change to its guidance at its next review in September. Coronavirus cases, meanwhile, continued to surge globally, especially in the United States and India, casting a shadow over hopes of an economic recovery. Immediate resistance can be seen at 1.1868 (Daily high), an upside break can trigger rise towards 1.1929 (23.6%fib).On the downside, immediate support is seen at 1.1802 (38.2% fib), a break below could take the pair towards 1.1755 (20 DMA).
GBP/USD: Sterling edged up against the dollar on Monday as cable was driven higher by a weaker U.S. currency ahead of a new round of Brexit negotiations. Brexit trade talks will restart on Tuesday. The issue of whether London’s financial sector will be able to access the European Union’s market after Brexit is in focus. The pound was at $1.3101 against the dollar by 1056 GMT, up 0.1% since the previous session’s New York close. The dollar was a touch weaker after the United States and China postponed their review of the Phase One trade deal. Immediate resistance can be seen at 1.3185 23.6% fib), an upside break can trigger rise towards 1.3253 (Higher BB).On the downside, immediate support is seen at 1.3055(5 DMA), a break below could take the pair towards 1.2965 (38.2%fib).
USD/CHF: The dollar declined against the Swiss franc on Monday as uncertainty ahead of a week that includes minutes of the U.S. Federal Reserve’s last policy meeting and the U.S. Democratic Party’s nomination convention kept a lid on sentiment. Markets are looking to the Fed minutes from last month’s meeting, due to be released on Wednesday, for any clues about an anticipated shift in the policy outlook. Speculation is rife the U.S. central bank will adopt an average inflation target, which would seek to push inflation above 2% for some time to make up for the years it has run below. Immediate resistance can be seen at 0.9111 (5 DMA), an upside break can trigger rise towards 0.9125 (38.2% fib).On the downside, immediate support is seen at 0.9053 (23.6% fib), a break below could take the pair towards 0.9012 (Lower BB).
USD/JPY: The dollar dipped against the Japanese yen on Monday as worries about the lagging U.S. economic recovery decreased demand for dollar. The United States and China delayed a Saturday review of their Phase 1 trade deal, citing scheduling conflicts.A boost to sentiment from the postponement of the U.S-China trade deal review which leaves the deal intact was muted by uncertainty, ahead of a week a week that includes Federal Reserve minutes and the Democrats’ nomination convention. The dollar was last down 0.23% versus the Japanese yen at 106.26. Strong resistance can be seen at 106.61 (5 DMA), an upside break can trigger rise towards 106.84 (50% fib).On the downside, immediate support is seen at 106.06 (21 DMA), a break below could take the pair towards 105.76 (61.8%fib).
Equities Recap
European shares were trading flat on Monday as China-exposed miners gained on fresh stimulus for the world’s second-largest economy, but growing risks from an uptick in coronavirus cases in the continent weighed on sentiment.
At (GMT 12:15 ),UK's benchmark FTSE 100 was last trading up at 0.21 percent, Germany's Dax was up by 0.22 percent, France’s CAC was last up by 0.20 percent.
Commodities Recap
Gold rose on Monday as the dollar eased, recouping initial declines following a steep drop in the previous week, with focus on the release of U.S. Federal Reserve minutes later this week.
Spot gold rose 0.3% to $1,949.09 per ounce by 0636 GMT.. U.S. gold futures gained 0.5% at $1,958.90 per ounce.
Oil prices edged lower on Monday on rising coronavirus cases particularly in Europe and tensions between major consumers China and the United States, although China’s plans to increase U.S. crude imports curbed the losses.
Brent crude fell 17 cents, or 0.4%, to $44.63 a barrel by 1206 GMT, and U.S. West Texas Intermediate crude was down 9 cents, or 0.2%, to $41.92 a barrel.
Treasuries Recap
Italian government bonds edged lower and the spread over Germany was close to its tightest in five months as more money flowed into the global economy, this time courtesy of the Chinese central bank, boosting stocks and riskier assets globally.
Italian 10-year bond yields edged lower to 1.04%, compressing the closely-watched Italy-Germany bond yield spread to 146 basis points, close to the tightest level since March.
Meanwhile, benchmark German 10-year bond yields dipped slightly to -0.42%, having climbed eight basis points in the previous week.