Posted at 18 August 2020 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index slumped to a 1-1/2 week low following a 2.6 basis point decline in benchmark U.S. 10-year government bond yields overnight. Investors expect the release of U.S. Federal Reserve minutes on Wednesday to possibly determine the next moves. The greenback against a basket of currencies traded 0.2 percent down at 92.62, having touched a low of 92.60 earlier, its lowest since August 6.
EUR/USD: The euro rallied to a near 2-week peak as the greenback eased on retreating yields and soft U.S. economic data. U.S. Treasury yields retreated from last week's higher levels as the market awaited a new burst of supply to finance stimulus efforts to combat the economic fallout from the coronavirus pandemic. The European currency traded 0.2 percent higher at 1.1893, having touched a high of 1.1896 earlier, its highest since August 6. Investors’ attention will remain on the U.S. building permits, housing starts and Fed Brainard's speech, amid a lack of economic data from the EZ docket. Immediate resistance is located at 1.1910, a break above targets 1.1940. On the downside, support is seen at 1.1840, a break below could drag it below 1.1810 (10-DMA).
USD/JPY: The dollar declined to a 1-1/2 week low after data released yesterday showed the New York Fed’s Empire State business conditions index tumbled to 3.7 in August from 17.2 in July. Investors now await the minutes from the U.S. Federal Reserve’s last policy meeting due for release on Wednesday. The major was trading 0.4 percent down at 105.60, having hit a low of 105.56 earlier, its lowest since August 7. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. U.S. building permits, housing starts and Fed Brainard's speech. Immediate resistance is located at 106.30 (50% retracement of 107.05 and105.56) a break above targets 106.57 (5-DMA). On the downside, support is seen at 105.36, a break below could take it near at 105.09.
GBP/USD: Sterling surged, extending gains for the fourth straight session, as Britain and the European Union restart talks to try to agree a trade deal before the end of 2020. Britain exited the EU in January but has until December 31 to agree a deal on its future trading relationship. On Monday, the UK government said again it believed it could seal an agreement in September. The major traded 0.3 percent higher at 1.3140, having hit a high of 1.3144 earlier, 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 1.3161, a break above could take it near 1.3185. On the downside, support is seen at 1.3065, a break below targets 1.3041. Against the euro, the pound was trading 0.1 percent up at 90.51 pence, having hit a low of 90.70 on Monday, it’s lowest since July 30.
AUD/USD: The Australian dollar surged to a 1-1/2 week peak after Reserve Bank of Australia's August policy meeting minutes showed the central bank does not see a need to further ease policy for now as its package of measures were working broadly as expected with an economic recovery underway in most of the country. The Aussie trades 0.1 percent higher at 0.7222, having hit a high of 0.7230 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 0.7240 a break above could take it near 0.7257. On the downside, support is seen at 0.7190, a break below targets 0.7150 (21-DMA).
Equities Recap
Asian shares surged as optimism generated by Wall Street’s tech-driven rally offset U.S.-China tensions.
MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.2 percent.
Tokyo's Nikkei fell 0.2 percent to 23,051.08 points, Australia's S&P/ASX 200 index rallied 0.8 percent to 6,123.40 points. South Korea's KOSPI eased 2.3 percent to 2,351.50 points.
Shanghai composite index rose 0.3 percent to 3,448.24 points, while CSI 300 index traded 0.1 percent down at 4,811.61 points.
Hong Kong’s Hang Seng traded 0.05 percent lower at 25,338.38 points. Taiwan shares shed 0.7 percent to 12,872.14 points.
Commodities Recap
Oil prices declined, but held onto overnight gains after OPEC+ said the producer grouping is almost fully complying with output cuts to support prices amid a decline in demand for fuels due to the coronavirus pandemic. International benchmark Brent crude was trading 0.1 percent down at $45.08 per barrel by 0519 GMT, having hit a high of $45.76 last week, its highest since August 5. U.S. West Texas Intermediate was trading 0.05 percent lower at $42.73 a barrel, after rising as high as $42.92 last week, its highest since August 5.
Gold prices surged to a 1-week peak on the back of a weaker dollar, although gains were capped by a rally in U.S. equities and signs of a recovery in global economic activity. Spot gold was trading 0.3 percent higher at $1,991.84 per ounce by 0522 GMT, having hit a low of $1862.89 on Wednesday, its lowest since July 22. U.S. gold futures eased 0.3 percent to $1,993.30 per ounce.
Treasuries Recap
The U.S. Treasury yields declined, with the benchmark 10-year note yield trading at 0.683 percent.