Posted at 24 August 2020 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index nudged lower as the quantitative easing that the Federal Reserve deployed so far has flooded financial markets with excess liquidity. The greenback against a basket of currencies traded 0.1 percent down at 93.15, having touched a high of 93.47 on Friday, its highest since August 12.
EUR/USD: The euro steadied after tumbling to a 1-1/2 week low in the prior session on a batch of European business surveys that pointed to a stuttering economic recovery. The bloc's IHS Markit’s flash Composite Purchasing Managers’ Index declined to 51.6 from July’s final reading of 54.9, raising policymakers concern and diminishing hopes for a V-shaped recovery. The European currency traded flat at 1.1797, having touched a low of 1.1754 on Friday, its lowest since August 12. Investors’ attention will remain on a series of data from the Eurozone economies, ahead of the Chicago Fed National Activity Index. Immediate resistance is located at 1.1858 (5-DMA), a break above targets 1.1883. On the downside, support is seen at 1.1762, a break below could drag it below 1.1735.
USD/JPY: The dollar surged, halting a 2-day losing streak, as traders looked to more data for a gauge on the health of the global economy and the Federal Reserve’s annual Jackson Hole retreat for guidance on the outlook for U.S. monetary policy. Investor risk sentiment also improved following U.S. authorization of a coronavirus treatment that uses blood plasma from recovered patients. The major was trading 0.1 percent up at 105.87, 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 Chicago Fed National Activity Index. 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 regained some ground after tumbling more than 1 percent in the previous session on a mix of bad news on the latest Brexit negotiations. Britain and the European Union made scant progress towards a deal on future ties in talks last week, although their chief negotiators blamed each other for the stalemate as the end-of-year deadline looms. The major traded 0.1 percent higher at 1.3093, 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 1.3146 (5-DMA), a break above could take it near 1.3185. On the downside, support is seen at 1.3048, a break below targets 1.3009. Against the euro, the pound was trading 0.05 percent down at 90.10 pence, having hit a high of 89.44 on Friday, it’s lowest since July 13.
AUD/USD: The Australian dollar surged after the state of Victoria reported its lowest daily rise in new coronavirus infections in seven weeks, fuelling optimism that a deadly second wave there is subsiding. The Aussie trades 0.2 percent up at 0.7173, 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 0.7197 (5-DMA) a break above could take it near 0.7215. On the downside, support is seen at 0.7135, a break below targets 0.7105.
NZD/USD: The New Zealand dollar held firm after the government extended a coronavirus lockdown in Auckland by four more days. 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 0.6561 (10-DMA), a break above could take it near 0.6578. On the downside, support is seen at 0.6502, a break below could drag it below 0.6480.
Equities Recap
Asian shares advanced after the U.S. Food & Drug Administration authorised the use of blood plasma from recovered patients as a treatment option.
MSCI’s broadest index of Asia-Pacific shares outside Japan surged 0.65 percent.
Tokyo's Nikkei gained 0.3 percent to 22,982.30 points, Australia's S&P/ASX 200 index surged 0.3 percent to 6,129.60 points. South Korea's KOSPI rallied 0.5 percent to 2,316.97 points.
Shanghai composite index rose 0.3 percent to 3,389.88 points, while CSI 300 index traded 0.9 percent up at 4,762.81 points.
Hong Kong’s Hang Seng traded 1.5 percent higher at 25,484.48 points. Taiwan shares added 0.3 percent to 12,647.13 points.
Commodities Recap
Crude oil prices steadied as storms closed in on the Gulf of Mexico, shutting more than half the region’s oil production, although ongoing concerns about fuel demand being dented by coronavirus lockdowns capped upside. International benchmark Brent crude was trading 0.05 percent up at $44.28 per barrel by 0415 GMT, having hit a low of $43.62 on Friday, its lowest since August 4. U.S. West Texas Intermediate was trading 0.05 percent higher at $42.32 a barrel, after falling as low as $41.48 on Friday, its lowest since August 10.
Gold prices declined, hovering towards a 1-1/2 week low scaled in the prior session, as risk sentiment improved after the U.S. drug regulator authorised the use of blood plasma from recovered COVID-19 patients as a treatment option. Spot gold was trading down 0.4 percent to $1,932.99 per ounce by 0420 GMT, having hit a low of $1911.58 on Friday, its lowest since August 12. U.S. gold futures eased 0.2 percent to $1,942.90.
Treasuries Recap
The U.S. Treasury yields declined, with the benchmark 10-year note yield trading at 0.628 percent.