Posted at 24 September 2020 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index rallied to a 2-month peak as rising coronavirus infections in Europe and Britain undermined investor optimism about vaccine progress. Moreover, signs of economic slowdown in Europe and the United States renewed concern about a second wave of coronavirus infections, while the Federal Reserve’s warned that the U.S. economy needs more fiscal stimulus. The greenback against a basket of currencies traded 0.1 percent up at 94.43, having touched a high of 94.49 earlier, its highest since July 24.
EUR/USD: The euro declined, hovering towards a near 2-month low recorded in the prior session, as data showed business activity in the Europe slowed in September as fresh restrictions to control a resurgence in coronavirus infections slammed the services industry into reverse. The European currency traded 0.05 percent down at 1.1653, having touched a low of 1.1651 on Wednesday, its lowest since July 27. Investors’ attention will remain on a series of data from the Eurozone economies and German IFO survey, ahead of the U.S. unemployment benefit claims, new home sales, Fed Chair Powell's testimony and Treasury Sec Mnuchin's speech. Immediate resistance is located at 1.1695, a break above targets 1.1725. On the downside, support is seen at 1.1626, a break below could drag it below 1.1595.
USD/JPY: The dollar surged, extending gains for the fourth straight session, as investors await U.S. weekly jobless claims data, due later in the day, which is expected to show claims declined slightly but remained at high levels. Data released yesterday showed U.S. business activity slowed in September and several Fed policymakers warned that further government aid is needed to bolster the economy. The major was trading 0.1 percent up at 105.44, having hit a high of 105.49 on Wednesday, its highest since September 15. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims, new home sales, Fed Chair Powell's testimony and Treasury Sec Mnuchin's speech. Immediate resistance is located at 105.65, a break above targets 105.97. On the downside, support is seen at 104.98, a break below could take it near at 104.75.
GBP/USD: Sterling slumped to its lowest level in more than two months, after Prime Minister Boris Johnson ordered restaurants and bars to close early and told British people to work from home where possible, in new measures which he said could last for six months. The major traded 0.1 percent down at 1.2705, having hit a low of 1.2675 on Wednesday, it’s lowest since July 23. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2777, a break above could take it near 1.2815. On the downside, support is seen at 1.2661, a break below targets 1.2644. Against the euro, the pound was trading 0.1 percent down at 91.73 pence, having hit a low of 92.20 on Tuesday, it’s lowest since September 15.
AUD/USD: The Australian dollar plunged to a 2-month low, as investors continued to digest yesterday's unexpectedly downbeat retail sales data. Australian retail sales declined -4.2 percent in August, with the state of Vitoria recording it’s the biggest decline in sales owing to renewed lockdown restrictions and a second wave of coronavirus in the state. Moreover, expectations for additional monetary easing by the RBA further dented the bid tone around the major. The Aussie trades 0.5 percent down at 0.7037, having hit a low of 0.7034 earlier, it’s lowest since July 21. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7106 (23.6% retracement of 0.7345 and 0.7034), a break above could take it near 0.7152 (38.2% retracement). On the downside, support is seen at 0.7011, a break below targets 0.6984.
NZD/USD: The New Zealand dollar tumbled to a 1-month low, after the Reserve Bank of New Zealand in its policy statement noted that it is prepared to lower the policy rate to provide additional stimulus if required. On Wednesday, the RBNZ left its policy rate unchanged at 0.25 percent and kept its quantitative easing program steady at NZD100 billion, as expected. The Kiwi traded 0.3 percent lower at 0.6527, having touched a low of 0.6525 earlier, its lowest level since August 25. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6573, a break above could take it near 0.6590. On the downside, support is seen at 0.6509, a break below could drag it below 0.6488.
Equities Recap
Asian shares plunged following a slump on Wall Street overnight, as a series of warnings from U.S. Federal Reserve officials underscored investor worries over the resilience of the economic recovery.
MSCI’s broadest index of Asia-Pacific shares outside Japan slumped 1.35 percent.
Tokyo's Nikkei eased 1.1 percent to 23,080.42 points, Australia's S&P/ASX 200 index declined 0.8 percent to 5,879.00 points. South Korea's KOSPI tumbled 2.5 percent to 2,274.46 points.
Shanghai composite index fell 1.7 percent to 3,225.52 points, while CSI 300 index traded 1.8 percent up at 4,568.42 points.
Hong Kong’s Hang Seng traded 1.9 percent lower at 23,296.17 points. Taiwan shares shed 2.5 percent to 12,264.38 points.
Commodities Recap
Crude oil prices declined, extending losses for the fifth straight session, on concerns the economic recovery in the United States is slowing as the coronavirus outbreak lingers. International benchmark Brent crude was trading 0.4 percent down at $41.29 per barrel by 0450 GMT, having hit a high of $43.77 on Friday, its highest since September 4. U.S. West Texas Intermediate was trading 0.7 percent lower at $39.33 a barrel, after rising as high as $41.46 on Friday, its highest since September 4.
Gold prices plunged to its lowest level in more than two months, weighed down by a robust dollar, as U.S. Federal Reserve officials tried to convince investors they will keep monetary policy easy for years to allow unemployment to fall. Spot gold was trading 0.5 percent down at $1,854.81 per ounce by 0454 GMT, having hit a low of $1854.77 earlier, its lowest since July 22. U.S. gold futures were down 0.3 percent to $1,863.60.
Treasuries Recap
The U.S. Treasury yields eased, with the benchmark 10-year note yield trading at 0.674 percent.