Posted at 08 September 2020 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index surged as euro tumbled on expectations of an accommodative turn from the European Central Bank later this week, while sterling plunged due to Brexit uncertainty. The greenback against a basket of currencies traded 0.1 percent up at 93.14, having touched a high of 93.24 on Friday, its highest since August 27
EUR/USD: The euro declined, extending losses for the sixth straight session, as investors turned cautious ahead of the European Central Bank meeting on Thursday. Markets are not expecting any major policy changes but will listen closely for anything said about the euro's recent rally. The European currency traded 0.05 percent lower at 1.1806, having touched a low of 1.1835 on Friday, its lowest since August 27. Investors’ attention will remain on a series of data from the Eurozone economies, EZ employment change and gross domestic product, ahead of the U.S. IBD/TIPP Economic Optimism and Consumer Credit Change. Immediate resistance is located at 1.1853 (5-DMA), a break above targets 1.1902. On the downside, support is seen at 1.1772, a break below could drag it below 1.1754.
USD/JPY: The Japanese yen eased after revised data showed Japan’s economy shrank an annualised 28.1 percent in April-June, worse than the initial estimate of a 27.8 percent contraction. Moreover, talks of a snap election in Japan further dented the bid tone around the yen. The major was trading 0.05 percent up at 106.25, having hit a high of 106.55 on Thursday, its highest since August 28. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. IBD/TIPP Economic Optimism and Consumer Credit Change. Immediate resistance is located at 106.55, a break above targets 106.70. On the downside, support is seen at 106.09 (10-DMA), a break below could take it near at 105.90.
GBP/USD: Sterling plunged to a near 2-week low amid a fresh crisis in EU-UK trade negotiations. The prospects of a hard Brexit resurfaced after a Financial Times report suggested Britain might legislate to override its Brexit withdrawal agreement prompted the European Union to warn there would be no deal if that happened. The major traded 0.2 percent down at 1.3130, having hit a low of 1.3127 earlier, it’s lowest since August 26. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3186, a break above could take it near 1.3220. On the downside, support is seen at 1.3085, a break below targets 1.3053. Against the euro, the pound was trading 0.4 percent down at 89.48 pence, having hit a high of 88.65 on Thursday, it’s highest since June 9.
AUD/USD: The Australian dollar consolidated within narrow ranges after data showed the country's business confidence improved last month but remained fragile. National Australia Bank's index of business confidence did rise but stayed in negative territory, while the survey of business conditions slipped in August reflecting weakness in employment, sales, and profitability. The Aussie trades flat at 0.7276, having hit a low of 0.7222 on Friday, it’s lowest since August 27. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7307 (5-DMA), a break above could take it near 0.7350. On the downside, support is seen at 0.7253, a break below targets 0.7232 (21-DMA).
NZD/USD: The New Zealand dollar eased below the 0.6700 handle, as the country's central bank considers a package of options to further support the economy. The Reserve Bank of New Zealand meets on September 22 and the Kiwi is likely to decline further as the latest speech by Governor Orr suggested the RBNZ will deploy more unconventional tools. The Kiwi trades 0.1 percent lower at 0.6684, having touched a low of 0.6667 on Friday, its lowest level since August 28. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6729 (5-DMA), a break above could take it near 0.6756. On the downside, support is seen at 0.6660, a break below could drag it below 0.6635.
Equities Recap
Asian shares gained as investors looked to whether U.S. tech shares could recover from their losses.
MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.3 percent.
Tokyo's Nikkei gained 0.6 percent to 23,233.18 points, Australia's S&P/ASX 200 index rallied 0.8 percent to 5,991.90 points. South Korea's KOSPI surged 0.6 percent to 2,398.49 points.
Shanghai composite index rose 0.8 percent to 3,319.40 points, while CSI 300 index traded 0.7 percent up at 4,700.70 points.
Hong Kong’s Hang Seng traded 0.5 percent higher at 24,708.34 points. Taiwan shares added 0.5 percent to 12,663.56 points.
Commodities Recap
Crude oil prices tumbled, hovering towards multi-week lows amid looming demand worries and concerns over possible rise in COVID-19 cases. International benchmark Brent crude was trading 0.1 percent down at $41.93 per barrel by 0501 GMT, having hit a low of $41.64 o Monday, its lowest since July 30. U.S. West Texas Intermediate was trading 0.2 percent lower at $38.99 a barrel, after falling as low as $38.58 on Monday, its lowest since July 10.
Gold prices declined, dragged lower by a stronger U.S. dollar, although growing fears over the global economic recovery from the coronavirus crisis limited losses. Spot gold was trading 0.1 percent lower at $1,926.59 per ounce by 0505 GMT, having hit a low of $1916.69 on Friday, its lowest since August 27. U.S. gold futures fell 0.1 percent to $1,932.30.
Treasuries Recap
The U.S. Treasury yields eased, with the benchmark 10-year note yield trading at 0.713 percent.