Posted at 19 August 2020 / Categories Market Roundups
Market Roundup
•Dollar jumps 0.8%, snapping five sessions of losses
•Fed policymakers zero in on strategy tweaks, minutes show
•Smaller coronavirus aid bill reachable -Trump official
•Canada Trimmed CPI (YoY) 1.7%,1.8% previous
•Canada Common CPI (YoY) 1.3%, 1.5% previous
•Canada Jul Wholesale Sales (MoM) 18.5%, 10.0% forecast, 5.7% previous
•Canada Jul CPI (YoY) 0.1%, 0.5% forecast, 0.7% previous
•Canada Jul CPI (MoM) 0.0%, 0.4% forecast, 0.8% previous
•Canada Jul Core CPI (MoM) -0.1%,0.4% previous
•Canada Jul Core CPI (YoY) 0.7% ,1.1% previous
•Canada Median CPI (YoY) 1.9%,1.9% previous
• US Seevol Cushing Storage Report -1.986M,1.731M previous
• US Payrolls Benchmark, n.s.a. -173.00K,-505.00K previous
•US Gasoline Inventories -3.322M,-1.057M forecast, -0.722M previous
•US Crude Oil Inventories -1.632M,-2.670M forecast, -4.512M previous
Looking Ahead – Economic Data (GMT)
•23:50 Japan Foreign Bonds Buying 1,434.9B previous
•23:50 Japan Foreign Investments in Japanese Stocks 233.8B previous
•01:30 China PBoC Loan Prime Rate 3.85% previous
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Currencies Summaries
EUR/USD: The euro dipped against dollar on Wednesday after the Federal Reserve suggested it could pursue aggressive stimulus measures for longer than under its previous strategy, minutes from its last policy meeting showed. The readout on Fed discussions provide hints to further action that the U.S. central bank could take in September. No change in interest rate policy is expected until end-2021. The dollar index rose 0.805%, with the euro down 0.67% to $1.1849.Immediate resistance can be seen at 1.1871 (13th Aug high), an upside break can trigger rise towards 1.1925 (23.6% fib).On the downside, immediate support is seen at 1.1807 (38.2% fib), a break below could take the pair towards 1.1787 (21 DMA).
GBP/USD: Sterling dipped against U.S. dollar on Wednesday as dollar rebounded against sterling after the release of minutes from the Fed's last policy meeting that were not as dovish as some investors anticipated. The Fed reiterated the economic downturn triggered by the coronavirus pandemic faces a highly uncertain path and additional fiscal stimulus would needed to support the economy.The dollar index, which reflects its value against six leading trading currencies, rose to hold just above a 27-month low hit overnight. Immediate resistance can be seen at 1.3198 (23.6%fib), an upside break can trigger rise towards 1.3245 (Higher BB).On the downside, immediate support is seen at 1.3037 (21DMA), a break below could take the pair towards 1.2991 (38.2%fib)
USD/CAD: The Canadian dollar fell against its U.S. counterpart on Wednesday as the greenback broadly rebounded and a cooling of domestic inflation supported expectations for the Bank of Canada to leave interest rates near zero until at least 2022.The loonie weakened 0.3% to 1.3213 to the greenback, pulling back from its strongest intraday level since Jan. 24 at 1.3131.Canada's annual inflation rate fell to 0.1% in July,Statistics Canada said, which was less than the 0.5% rate that analysts had expected. Immediate resistance can be seen at 1.3245 (9 DMA), an upside break can trigger rise towards 1.3311 (21DMA).On the downside, immediate support is seen at 1.3186 (23.6% fib), a break below could take the pair towards 1.3128 (Daily low).
USD/JPY: The dollar rebounded against the Japanese yen on Wednesday as dollar firmed on the release of minutes from the U.S. Federal Reserve's recent meeting, sidelining U.S.-China tensions. The dollar emerged lows after the Fed suggested it could pursue aggressive stimulus measures for longer than under its previous strategy. Dollar was also supported as a senior Trump administration official said a smaller coronavirus relief bill worth around $500 billion could be reached, as opposed to one between $1 trillion and $3 trillion that had been previously expected. Strong resistance can be seen at 107.07 (21 DMA), an upside break can trigger rise towards 107.45 (30 DMA).On the downside, immediate support is seen at 105.10 (Daily low), a break below could take the pair towards 104.59(lower BB).
Equities Recap
European stocks closed higher on Wednesday following new record highs for Wall Street’s main indexes, while UK airlines rallied on hopes of a shorter quarantine period for travelers.
UK's benchmark FTSE 100 closed up by 0.58 percent, Germany's Dax ended up by 0.74 percent, France’s CAC finished the day up by 0.79 percent.
The S&P 500 and Nasdaq slipped from all-time intra-day highs on Wednesday in choppy trading after the Federal Reserve ruled out for now more dovish monetary policy measures such as the yield curve control.
Dow Jones closed down by 0.31% percent, S&P 500 closed down by 0.44% percent, Nasdaq settled down by 0.57% percent.
Treasuries Recap
U.S. Treasury yields rose on Wednesday after minutes from the Federal Reserve's July meeting indicated that yield caps or targets were not on the horizon.
The benchmark 10-year yield was last up less than a basis point at 0.6752%.
Commodities Recap
Gold slumped more than 3% on Wednesday, as the dollar jumped and Treasury yields gained after the U.S. Federal Reserve’s July meeting minutes showed policymakers expressed little support to cap bond yields.
Spot gold fell 3.4% to $1,932.09 per ounce by 4:21 p.m. EDT (2021 GMT), while U.S. gold futures settled 2.1% lower at $1,970.30.
Oil prices steady on Wednesday as concerns lingered over soft U.S. fuel demand while global producers feared a second prolonged wave of the coronavirus pandemic was a major risk for the market recovery.
U.S. crude oil stockpiles fell 1.6 million barrels last week, while fuel demand was down 14% from the year-ago period over the last four weeks, Energy Information Administration data showed.