Posted at 19 August 2020 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index held firm near an over 2-year trough, as U.S. Treasury yields declined, while investors look for signs that a political stalemate in Washington over a round of aid was easing. The greenback against a basket of currencies traded flat at 92.29, having touched a low of 92.13 on Tuesday, its lowest since May 2018.
EUR/USD: The euro steadied after rising to an over 2-year peak in the previous session as the ongoing effects of the Federal Reserve's stimulus programs weakened the greenback broadly. The European currency traded flat at 1.1932, having touched a high of 1.1965 on Tuesday, its highest since May 2018. Investors’ attention will remain on a series of data from the Eurozone economies, EZ current account figures, and consumer price index, ahead of the FOMC Minutes. Immediate resistance is located at 1.1967, a break above targets 1.1996. On the downside, support is seen at 1.1877, a break below could drag it below 1.1847 (5-DMA).
USD/JPY: The dollar rebounded from near 3-week lows as risk sentiment improved after U.S. housing starts rose 22.6 percent in July in the latest sign housing sector is emerging. Data for June was revised up to a 1.22 million-unit pace from the previously reported 1.186 million. Investors await the release of the minutes from the July 28-29 FOMC meeting later in the day, with speculation the Fed will adopt an average inflation target, which would seek to push inflation above 2 percent for some time. The major was trading 0.2 percent up at 105.56, having hit a low of 105.10 earlier, its lowest since July 31. Investors’ will continue to track the broad-based market sentiment, ahead of the FOMC Minutes. Immediate resistance is located at 105.83 (38.2% retracement of 107.05 and105.56) a break above targets 106.12 (10-DMA). On the downside, support is seen at 104.77, a break below could take it near at 104.55.
GBP/USD: Sterling surged to a 7-1/2 month high, supported by weakness in the U.S. currency and as a new round of Brexit talks began. The trade negotiations are scheduled for up to October 2, less than a fortnight before an EU summit. The EU has said negotiators must seal any deal by October to allow for ratification by the bloc’s 27 nations. The major traded flat at 1.3235, having hit a high of 1.3264 earlier, it’s highest since December 31, 2019. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3284, a break above could take it near 1.3335. On the downside, support is seen at 1.3185, a break below targets 1.3144. Against the euro, the pound was trading flat at 90.12 pence, having hit a low of 90.70 on Monday, it’s lowest since July 30.
AUD/USD: The Australian dollar rose, extending gains for the fourth straight session, as the greenback eased, weighed down by a decline in the 10-year U.S. Treasury bond yields. The Aussie trades 0.1 percent higher at 0.7249, having hit a high of 0.7264 on Tuesday, it’s highest since Feb 2019. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7273 a break above could take it near 0.7295. On the downside, support is seen at 0.7204, a break below targets 0.7181 (10-DMA).
Equities Recap
Asian shares surged to a 7-month peak, tracking the S&P 500, which recorded all-time highs driven by ever expanding policy stimulus aimed at cushioning the blow to economies from the coronavirus pandemic.
MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.3 percent.
Tokyo's Nikkei rose 0.3 percent to 23,130.22 points, Australia's S&P/ASX 200 index rallied 0.7 percent to 6,166.60 points. South Korea's KOSPI gained 0.8 percent to 2,367.58 points.
Shanghai composite index declined 0.1 percent to 3,448.27 points, while CSI 300 index traded 0.3 percent down at 4,797.90 points.
Hong Kong’s Hang Seng traded 0.4 percent lower at 25,276.24 points. Taiwan shares shed 0.7 percent to 12,778.64 points.
Commodities Recap
Crude oil price surged after industry data from the American Petroleum Institute showed U.S. crude inventories fell by 4.3 million barrels to about 512 million barrels, more than analysts’ expectations for a 2.7 million-barrel drawdown. International benchmark Brent crude was trading 0.3 percent up at $45.10 per barrel by 0427 GMT, having hit a high of $45.76 last week, its highest since August 5. U.S. West Texas Intermediate was trading 0.2 percent higher at $42.62 a barrel, after rising as high as $42.97 on Tuesday, its highest since August 5.
Gold prices declined below $2,000 an ounce after rising to a 1-week peak in the previous session as the dollar steadied, while investors awaited minutes from the U.S. Federal Reserve’s last policy meeting. Spot gold was trading 0.5 percent down at $1,991.48 per ounce by 0430 GMT, having hit a high of $2015.72 on Tuesday, its highest since August 11. U.S. gold futures fell 0.5 percent to $2,002.50.
Treasuries Recap
The U.S. Treasury yields rose, with the benchmark 10-year note yield trading at 0.669 percent.