Posted at 27 August 2020 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index declined to a near 1-week low as investors anxiously await hints from Federal Reserve Chairman Jerome Powell that the central bank might tweak its policy framework to help push up inflation. The greenback against a basket of currencies traded flat at 93.90, having touched a low of 92.79 earlier, its lowest since August 21.
EUR/USD: The euro nudged higher after European Central Bank policymaker Peter Kazimi stated that the eurozone economy is growing in line with the path the ECB projected in June, and the bank’s bond purchase scheme to help tackle the pandemic emergency is working as intended. The European currency traded 0.05 percent higher at 1.1833, 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 and EZ M3 money supply, ahead of the U.S. unemployment benefit claims, gross domestic product, personal consumption expenditures prices, pending home sales, Kansas Fed Manufacturing Activity and Fed Chair Jerome Powell's speech. Immediate resistance is located at 1.1868, a break above targets 1.1910. On the downside, support is seen at 1.1802, a break below could drag it below 1.1772.
USD/JPY: The dollar declined, extending previous session losses, as investors speculate the U.S. central bank will introduce a new policy framework to fight persistently low inflation as early as next month. Federal Reserve Chair Jerome Powell is expected to outline a more flexible approach to policy, including a shift to targeting an average inflation rate around 2 percent. The major was trading 0.05 percent down at 105.95, having hit a high of 106.57 on Tuesday, its highest since August 17. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims, gross domestic product, personal consumption expenditures prices, pending home sales, Kansas Fed Manufacturing Activity and Fed Chair Jerome Powell's speech. 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 105.74, a break below could take it near at 105.45.
GBP/USD: Sterling consolidated within narrow ranges after rising to a near 1-week peak earlier in the session as Brexit uncertainty kept traders on the sidelines. The major traded flat at 1.3209, having hit a low of 1.3053 on Monday, 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 1.3249, a break above could take it near 1.3284. On the downside, support is seen at 1.3144 (5-DMA), a break below targets 1.3098 (21-DMA). Against the euro, the pound was trading flat at 89.56 pence, having hit a high of 89.44 on Friday, it’s lowest since July 13.
AUD/USD: The Australian dollar rose to a 1-week peak after U.S. and Chinese officials reaffirmed their commitment to a Phase 1 trade deal earlier this week despite tense bilateral relations. The Aussie trades 0.1 percent up at 0.7236, having hit a high of 0.7250 earlier in the session, it’s highest since August 19. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7275, a break above could take it near 0.7295. On the downside, support is seen at 0.7198, a break below targets 0.7177 (21-DMA).
NZD/USD: The New Zealand dollar rallied to an over 1-week high as the greenback eased ahead of the Federal Reserve Chairman Jerome Powell's speech about the U.S. central bank’s policy framework review. The Kiwi trades 0.1 percent higher at 0.6624, having touched a high of 0.6647 earlier, its highest level since August 19. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6655, a break above could take it near 0.6578. On the downside, support is seen at 0.6593 (21-DMA), a break below could drag it below 0.6564.
Equities Recap
Asian shares rallied to 2-year peaks, following a record run on Wall Street as markets globally focused on the endless liquidity pumped out by central banks.
MSCI’s broadest index of Asia-Pacific shares outside Japan traded flat after rising to its highest since August 2018.
Tokyo's Nikkei declined 0.4 percent to 23,194.33 points, Australia's S&P/ASX 200 index surged 0.2 percent to 6,126.40 points. South Korea's KOSPI fell 1.8 percent to 2,350.39 points.
Shanghai composite index rose 0.5 percent to 3,346.83 points, while CSI 300 index traded 0.4 percent up at 4,722.82 points.
Hong Kong’s Hang Seng traded 0.9 percent lower at 25,266.26 points. Taiwan shares shed 0.3 percent to 12,797.31 points.
Commodities Recap
Crude oil prices surged as a massive storm in the Gulf of Mexico forced oil rigs and refineries to shut, although rising oil stockpiles limited gains. International benchmark Brent crude was trading 0.2 percent up at $45.74 per barrel by 0437 GMT, having hit a high of $46.07 on Wednesday, its highest since August 5. U.S. West Texas Intermediate was trading 0.2 percent lower at $43.37 a barrel, after rising as high as $43.75 on Wednesday, its highest since March 6.
Gold prices declined, following a sharp rise in the previous session, as investors squared positions ahead of a much-awaited speech from U.S. Federal Reserve Chairman Jerome Powell. Spot gold was trading 0.6 percent down at $1,943.09 per ounce by 0441 GMT, having hit a low of $1902.72 on Wednesday, its lowest since August 12. U.S. gold futures eased 0.2 percent to $1,949.50.
Treasuries Recap
The U.S. Treasury yields eased, with the benchmark 10-year note yield trading at 0.677 percent.