Posted at 21 August 2020 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index declined after data showed the number of Americans filing new claims for unemployment benefits unexpectedly rose back above the 1 million mark last week, while the U.S. Treasury yields slumped. The greenback against a basket of currencies traded 0.2 percent down at 92.60, having touched a high of 99.05 on Wednesday, its highest since Oct. 10 and was on course for its ninth consecutive weekly decline.
EUR/USD: The euro rose, extending previous session gains, as the greenback eased following a rise in U.S. jobless claims and a dip in Treasury yields. Investors now await the release of manufacturing data for the euro zone and for Germany later in day for signs of recovery in the bloc. The European currency traded 0.2 percent higher at 1.1876, having touched a low of 1.1802 on Thursday, its lowest since August 14. Investors’ attention will remain on a series of data from the Eurozone economies, EZ Markit preliminary manufacturing and service PMI, ahead of the U.S. existing home sales and Markit flash manufacturing and service PMI. Immediate resistance is located at 1.1904, a break above targets 1.1965. On the downside, support is seen at 1.1819 (10-DMA), a break below could drag it below 1.1791 (21-DMA).
USD/JPY: The dollar declined, drifting further below the 106.00 handle, after data released yesterday showed a larger-than-expected rise in weekly U.S. jobless claims, raising doubts about how quickly the U.S. economy will bounce back from the coronavirus. Moreover, U.S. Republicans and Democrats are still struggling to agree over additional economic stimulus further denting the bid tone around the dollar. Meanwhile, the Trump administration declined to acknowledge any plans to meet with China over the Phase 1 trade deal. The major was trading 0.2 percent down at 105.62, having hit a low of 105.10 on Wednesday, its lowest since July 31. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. existing home sales and Markit flash manufacturing and service PMI. Immediate resistance is located at 106.06 (50% retracement of 107.05 and 105.10), a break above targets 106.29 (61.8% retracement of 107.05 and 105.10). On the downside, support is seen at 105.45, a break below could take it near at 105.10.
GBP/USD: Sterling rose above the 1.3200 handle, as the dollar declined as the minutes of the Federal Reserve's July 28-29 meeting, published on Wednesday, showed policymakers concerned that an economic recovery faced a highly uncertain path. Britain has reiterated many times it still hopes for a post-Brexit trade deal to be achieved in coming weeks supporting the British pound's upside. The major traded 0.2 percent higher at 1.3242, having hit a high of 1.3267 on Wednesday, 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 1.3270, a break above could take it near 1.3298. On the downside, support is seen at 1.3177, a break below targets 1.3145 (5-DMA). Against the euro, the pound was trading 0.1 percent up at 89.68 pence, having hit a high of 89.66 earlier, it’s lowest since July 13.
AUD/USD: The Australian dollar rose after data showed the country's retail sales rose again in July, with gains in all states and territories except Victoria which relapsed into a lockdown last month following a surge in novel coronavirus cases. The economy's preliminary estimate of retail sales rose to A$30.75 billion in July, up a robust 12.2 percent on the same month last year. The Aussie trades 0.2 percent up at 0.7201, having hit a low of 0.7135 on Thursday, it’s lowest since August 14. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7230 a break above could take it near 0.7264. On the downside, support is seen at 0.7166 (21-DMA), a break below targets 0.7132.
NZD/USD: The New Zealand dollar steadied after tumbling to a 1-1/2 month low below the 0.6500 handle in the previous session, after a senior official said the Reserve Bank of New Zealand is closely watching the country’s labour market to decide if negative interest rates will be needed to further support the economy. The Kiwi trades 0.1 percent up at 0.6540, having touched a low of 0.6488 on Thursday, its lowest level since July 2. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6557 (5-DMA), a break above could take it near 0.6573. On the downside, support is seen at 0.6502, a break below could drag it below 0.6480.
Equities Recap
Asian shares bounced back following Wall Street’s lead, but were set for their softest week in about a month, while investors await purchasing managers’ index surveys across Europe, Britain and the United States.
MSCI’s broadest index of Asia-Pacific shares outside Japan surged 1.25 percent.
Tokyo's Nikkei gained 0.4 percent to 22,961.19 points, Australia's S&P/ASX 200 index slumped 0.2 percent to 6,112.90 points. South Korea's KOSPI rallied 2.01 percent to 2,319.67 points.
Shanghai composite index rose 0.4 percent to 3,378.27 points, while CSI 300 index traded 0.8 percent up at 4,716.00 points.
Hong Kong’s Hang Seng traded 1.2 percent higher at 25,112.27 points. Taiwan shares added 1.9 percent to 12,607.84 points.
Commodities Recap
Crude oil prices surged in early trade and was on track for a third straight week of gains, supported by major oil producers’ efforts to hold back output amid concerns about the economic recovery from the coronavirus pandemic. International benchmark Brent crude was trading 0.4 percent up at $45.03 per barrel by 0442 GMT, having hit a low of $44.00 on Thursday, its lowest since August 4. U.S. West Texas Intermediate was trading 0.4 percent higher at $42.92 a barrel, after falling as low as $41.66 on Thursday, its lowest since August 14.
Gold prices rose, extending gains from the prior session and were on track for a weekly gain after bleak U.S. jobless claims data reinforced fears of a slower recovery from the coronavirus-induced economic crisis. Spot gold was trading 0.05 percent higher at $1,947.00 per ounce by 0448 GMT, having hit a low of $1924.77 on Wednesday, its lowest since August 13. Gold is up 0.1 percent so far this week, having shed 4 percent in the week to Aug. 14, its worst in five months. U.S. gold futures rose 0.4 percent to $1,953.80.
Treasuries Recap
The U.S. Treasury yields steadied, with the benchmark 10-year note yield trading at 0.654 percent.