Posted at 02 September 2020 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index extended rebound after data released yesterday showed the IHS Markit's Manufacturing Purchasing Managers' Index for the U.S. improved from 50.9 in July to 53.1 in August, suggesting that the economic activity in the manufacturing sector continued to expand at a robust pace. The greenback against a basket of currencies traded 0.1 percent up at 92.42, having touched a low of 91.75 on Tuesday, its lowest since April 2018.
EUR/USD: The euro declined, drifting further away from a 28-month peak recorded in the prior session on data showing the Eurozone inflation fell into the negative territory in August, with the consumer price index falling 0.2 percent year-on-year versus July's 0.4 percent rise. The European currency traded 0.1 percent lower at 1.1904, having touched a high of 1.2011 on Tuesday, its highest since May 2018. Investors’ attention will remain on a series of data from the Eurozone economies, and EZ producer price index, ahead of the U.S. ADP Employment Change, Factory Orders, ISM-NY Business Conditions Index and Fed officials speech. Immediate resistance is located at 1.1965, a break above targets 1.2025. On the downside, support is seen at 1.1864, a break below could drag it below 1.1835 (21-DMA).
USD/JPY: The dollar rose, extending gains for the third straight session, after Fed Governor Lael Brainard in a speech stated that the central bank would need to roll out more stimulus to fulfil the Fed’s new promise of stronger job growth and higher inflation. The major was trading 0.1 percent up at 106.02, having hit a low of 105.20 on Friday, its lowest since August 19. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. ADP Employment Change, Factory Orders, ISM-NY Business Conditions Index and Fed officials speech. Immediate resistance is located at 106.30, a break above targets 106.57. On the downside, support is seen at 105.40, a break below could take it near at 105.10.
GBP/USD: Sterling steadied near an 8-1/2 month peak scaled in the previous session amid a lack of improvement in Brexit negotiations. The major traded flat at 1.3382, having hit a high of 1.3483 on Tuesday, it’s highest since mid December 2019. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3434, a break above could take it near 1.3472. On the downside, support is seen at 1.3301 (5-DMA), a break below targets 1.3267. Against the euro, the pound was trading 0.1 percent up at 88.94 pence, having hit a high of 88.88 on Tuesday, it’s highest since June 10.
AUD/USD: The Australian dollar declined, extending previous session losses, after data showed the economy plunged into its first recession in nearly 30 years, as coronavirus curbs dented business activity. Australia's gross domestic product shrank 7 per cent in the three months to end of June from a 0.3 percent decline in the March quarter. The Aussie trades 0.2 percent lower at 0.7354, having hit a high of 0.7413 on Tuesday, it’s highest since August 2018. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7410, a break above could take it near 0.7453. On the downside, support is seen at 0.7309 (38.2% retracement of 0.7135 and 0.7413), a break below targets 0.7276 (50% retracement).
NZD/USD: The New Zealand dollar rallied to a fresh over 1-year peak after the country's central bank governor Adrain Orr stated that the RBNZ's actions have been effective in broadly lowering interest rates, adding that policymakers are also preparing extra tools to use if needed. The Kiwi trades 0.4 percent higher at 0.6780, having touched a high of 0.6786 earlier, its highest level since July 2019. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6807, a break above could take it near 0.6837. On the downside, support is seen at 0.6729, a break below could drag it below 0.6697 (5-DMA).
Equities Recap
Asian shares gained, supported by upbeat U.S. manufacturing PMI and a rally in the U.S. tech shares.
MSCI’s broadest index of Asia-Pacific shares outside Japan rallied 0.3 percent.
Tokyo's Nikkei surged 0.4 percent to 23,218.75 points, Australia's S&P/ASX 200 index rose 1.9 percent to 6,063.80 points. South Korea's KOSPI gained 0.05 percent to 2,351.01 points.
Shanghai composite index declined 0.05 percent to 3,409.68 points, while CSI 300 index traded 0.3 percent up at 4,857.21 points.
Hong Kong’s Hang Seng traded 0.1 percent lower at 25,152.74 points. Taiwan shares shed 0.05 percent to 12,699.50 points.
Commodities Recap
Crude oil prices surged, extending previous session gains after a bigger-than-expected draw in U.S. crude stockpiles and as solid U.S. and Chinese factory activity fuelled optimism of a recovery from the pandemic. International benchmark Brent crude was trading 0.3 percent up at $45.88 per barrel by 0443 GMT, having hit a high of $46.50 on Monday, its highest since March 6. U.S. West Texas Intermediate was trading 0.2 percent up at $43.08 a barrel, after rising as high as $43.75 last week, its highest since March 6.
Gold prices declined after rising to a 2-week peak in the prior session as the dollar rebounded after robust U.S. manufacturing data bolstered hopes around global economic recovery. Spot gold was trading 0.3 percent lower at $1,963.55 per ounce by 0447 GMT, having hit a high of $1992.56 on Tuesday, its highest since August 19. U.S. gold futures dropped 0.4 percent to $1,971.80.
Treasuries Recap
The U.S. Treasury yields steadied, with the benchmark 10-year note yield trading at 0.687 percent.