Posted at 25 August 2020 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index nudged lower as investors awaited a speech from Federal Reserve Chairman Jerome Powell later in the week and expect he might address the future approach to inflation. The greenback against a basket of currencies traded 0.1 percent down at 93.20, having touched a high of 93.47 on Friday, its highest since August 12.
EUR/USD: The euro rose, halting a 2-day losing streak, as investors await the German IFO business survey for further signs of recovery in the economy. However, a rise in coronavirus cases in Europe is likely to weigh on market sentiment. The European currency traded 0.2 percent higher at 1.1811, 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 U.S. housing price index, Richmond Fed Manufacturing Index, S&P/Case-Shiller Home Price Indices, new home sales figures and consumer confidence. Immediate resistance is located at 1.1841 (5-DMA), a break above targets 1.1883. On the downside, support is seen at 1.1755, a break below could drag it below 1.1722.
USD/JPY: The dollar rose, extending previous session gains, as risk sentiment improved after the United States and China both hailed a phone call between their top trade officials as a success. The pair was also supported by a Financial Times report which said that U.S. authorities were considering fast-tracking approval for a COVID-19 vaccine being developed by AstraZeneca and Oxford University. The major was trading 0.05 percent up at 105.99, 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. housing price index, Richmond Fed Manufacturing Index, S&P/Case-Shiller Home Price Indices, new home sales figures and consumer confidence. Immediate resistance is located at 106.29 (61.8% retracement of 107.05 and 105.10), a break above targets 106.48. On the downside, support is seen at 105.75, a break below could take it near at 105.54.
GBP/USD: Sterling steadied after tumbling to a 1-1/2 week low earlier in the session on lingering concerns over Brexit. On Friday, British and European Union negotiators said they had made no real progress in their latest talks on relations after December 31. The major traded 0.3 percent higher at 1.3098, having hit a low of 1.3053, it’s lowest since August 14. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3147, a break above could take it near 1.3185. On the downside, support is seen at 1.3025, a break below targets 1.3009. Against the euro, the pound was trading 0.1 percent up at 90.14 pence, having hit a high of 89.44 on Friday, it’s lowest since July 13.
AUD/USD: The Australian dollar rose as investor risk appetite strengthened following reports that top U.S and Chinese officials see progress being made in resolving concerns around the Phase 1 trade deal reached between the two countries in January. The Aussie trades 0.1 percent up at 0.7157, 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 0.7202, a break above could take it near 0.7241. On the downside, support is seen at 0.7120, a break below targets 0.7105.
NZD/USD: The New Zealand dollar struggled to make any movement, weighed down by expectations of negative rates in the future. The Kiwi trades flat at 0.6527, 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 0.6555 (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 rose following a fresh Wall Street rally, while investors cheered signs of progress in U.S.-China trade negotiations.
MSCI’s broadest index of Asia-Pacific shares outside Japan surged 0.3 percent.
Tokyo's Nikkei gained 1.7 percent to 23,382.19 points, Australia's S&P/ASX 200 index surged 0.2 percent to 6,144.30 points. South Korea's KOSPI rallied 1.5 percent to 2,364.02 points.
Shanghai composite index eased 0.3 percent to 3,375.12 points, while CSI 300 index traded 0.1 percent up at 4,760.57 points.
Hong Kong’s Hang Seng traded 0.5 percent lower at 25,414.13 points. Taiwan shares shed 0.9 percent to 12,758.25 points.
Commodities Recap
Crude oil prices surged, extending previous session gains after storms disrupted U.S. production, although rising coronavirus cases in Asia and Europe limited upside. International benchmark Brent crude was trading 0.3 percent up at $45.13 per barrel by 0444 GMT, having hit a low of $43.62 on Friday, its lowest since August 4. U.S. West Texas Intermediate was trading 0.2 percent higher at $42.46 a barrel, after falling as low as $41.48 on Friday, its lowest since August 10.
Gold prices rose, halting 2-day losing streak, as the dollar dipped, with investors awaiting U.S. Federal Reserve Chairman Jerome Powell’s speech later this week, although a rally in equity markets limited the metal's gains. Spot gold was trading 0.3 percent higher to $1,935.49 per ounce by 0449 GMT, having hit a low of $1911.58 on Friday, its lowest since August 12. U.S. gold futures gained 0.1 percent at $1,941.60.
Treasuries Recap
The U.S. Treasury yields surged, with the benchmark 10-year note yield trading at 0.664 percent.