Posted at 08 October 2020 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index declined as investors await U.S. employment data due later in the day. Jobless claims is expected to decline, however, continued claims are likely to remain above 10 million. Meanwhile, minutes from the U.S. Federal Reserve’s September offered no clear sense of their next steps to offset the coronavirus recession. The greenback against a basket of currencies traded 0.1 percent down at 93.52, having touched a low of 93.34 on Tuesday, its lowest since September 21.
EUR/USD: The euro rose, extending previous session gains, as dollar weakness offset data showing that German industrial output edged down in August following three months of relatively strong increases, indicating the recovery in the German economy from the coronavirus impact was starting to lose steam. The European currency traded 0.1 percent up at 1.1774, having touched a high of 1.1807 on Tuesday, its highest since September 21. Investors’ attention will remain on ECB official's speech and ECB monetary policy meeting account, ahead of the U.S. unemployment benefit claims. Immediate resistance is located at 1.1797, a break above targets 1.1826. On the downside, support is seen at 1.1733, a break below could drag it below 1.1705.
USD/JPY: The dollar surged to a 3-week peak, as risk sentiment improved after U.S. President Donald Trump said that he was ready to sign off on some stimulus measures. Trump said late on Tuesday that Congress should quickly extend $25 billion in new payroll assistance to U.S. passenger airlines furloughing thousands of workers as air travel remains down sharply amid the coronavirus pandemic. The major was trading 0.05 percent up at 105.96, having hit a high of 106.10 earlier, its highest since September 14. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims. Immediate resistance is located at 106.24, a break above targets 106.50. On the downside, support is seen at 105.86, a break below could take it near at 105.65 (10-DMA).
GBP/USD: Sterling rose above the 1.2900 handle, as improved chances of a Brexit trade deal started to push the risk of negative interest rates off the table. Britain’s chief Brexit negotiator David Frost and minister Michael Gove reiterated that Britain wanted a trade agreement with the European Union. The major traded 0.2 percent higher up at 1.2939, having hit a high of 1.3007 on Tuesday, it’s highest since September 10. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2973, a break above could take it near 1.3007. On the downside, support is seen at 1.2884, a break below targets 1.2861 (21-DMA). Against the euro, the pound was trading flat at 91.02 pence, having hit a low of 91.61 in the prior session, it’s lowest since September 25.
AUD/USD: The Australian dollar rallied as the revival of hopes for some U.S. stimulus spending improved investor sentiment. President Donald Trump and House Speaker Nancy Pelosi seem open to pursuing a stimulus package for the airline industry. The Aussie trades 0.3 percent up at 0.7152, having hit a low of 0.7095 on Thursday, it’s lowest since September 29. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7188 (21-DMA), a break above could take it near 0.7209. On the downside, support is seen at 0.7100, a break below targets 0.7066.
NZD/USD: The New Zealand dollar slumped to an over 1-week trough, weighed down by the prospect of negative interest rates. Reserve Bank of New Zealand Assistant Governor, Christian Hawkesby, stated that inflation is likely to remain well below the target for three years, and added that the central bank is actively working on negative interest rates and funding for a lending program. The Kiwi traded 0.1 percent higher at 0.6583, having touched a low of 0.6547 earlier, its lowest level since September 28. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6615 (5-DMA), a break above could take it near 0.6639 (21-DMA). On the downside, support is seen at 0.6535, a break below could drag it below 0.6511.
Equities Recap
Asian shares surged as risk sentiment improved on renewed hopes for more U.S. stimulus.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.05 percent.
Tokyo's Nikkei rose 0.9 percent to 23,647.07 points, Australia's S&P/ASX 200 index rallied 1.09 percent to 6,102.00 points. South Korea's KOSPI surged 0.5 percent to 2,398.24 points.
Hong Kong’s Hang Seng traded 0.5 percent lower at 24,122.76 points. Taiwan shares added 1.1 percent to 12,887.19 points.
Commodities Recap
Crude oil prices declined after data showed crude inventories rose by 501,000 barrels in the week to Oct. 2 to 492.9 million barrels, while production was higher, rising to 11 million barrels per day from 10.7 million bpd in the previous week. International benchmark Brent crude was trading 0.1 percent down at $42.10 per barrel by 0533 GMT, having hit a high of $42.81 on Tuesday, its highest since September 21. U.S. West Texas Intermediate was trading 0.05 percent lower at $39.98 a barrel, after rising as high as $40.83 on Tuesday, its highest since September 21.
Gold prices surged amid renewed hopes for more U.S. stimulus, while investors awaited the weekly jobless claims data to further gauge the health of the U.S. economy. Spot gold was trading 0.1 percent higher at $1,889.32 per ounce by 0535 GMT, having hit a high of $1921.27 on Tuesday, its highest since September 21. U.S. gold futures were up 0.1 percent at $1,893.10.
Treasuries Recap
The U.S. Treasury yields declined, with the benchmark 10-year note yield trading at 0.777 percent and the 30-year yield at 1.576 percent.