Posted at 22 October 2020 / Categories Market Roundups
Market Roundup
Economic Data Ahead
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DXY: The dollar index steadied near a 2-month low after stimulus talks between U.S. lawmakers faced a setback on Wednesday when President Donald Trump accused Democrats of being unwilling to craft a compromise on aid. The greenback against a basket of currencies traded 0.05 percent up at 92.70, having touched a low of 92.47 on Wednesday, its lowest since September 2.
EUR/USD: The euro declined, retreating from an over 1-month peak, as the greenback steadied after doubts emerged whether an agreement on a new U.S. fiscal coronavirus aid package could be reached before the election. The European currency traded 0.05 percent lower at 1.1852, having touched a high of 1.1880 on Wednesday, its highest since September 16. Investors’ attention will remain on series of economic data from the Eurozone economies, and EZ Consumer Confidence, ahead of the U.S. unemployment benefit claims, existing home sales, and Kansas Fed Manufacturing Activity. Immediate resistance is located at 1.1880, a break above targets 1.1900. On the downside, support is seen at 1.1820, a break below could drag it below 1.1803.
USD/JPY: The dollar steadied after tumbling to a 1-month low in the prior session after U.S. President Donald Trump and House Speaker Nancy Pelosi boosted hopes an agreement on stimulus was close. House Speaker Nancy Pelosi said before starting talks with Treasury Secretary Steven Mnuchin that there was still a chance for a deal despite resistance from Senate Republicans, though she acknowledged it might not pass until after the election. The major was trading 0.05 percent up at 104.62, having hit a low of 104.34 on Wednesday, its lowest since September 21. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims, existing home sales, and Kansas Fed Manufacturing Activity. Immediate resistance is located at 104.94, a break above targets 105.26 (5-DMA). On the downside, support is seen at 104.40, a break below could take it near at 104.08.
GBP/USD: Sterling eased after rising to a 1-1/2 month peak in the prior session on a Bloomberg report that Brexit negotiations were due to start again after halting abruptly last week. The report also said Britain and the European Union would aim to reach a new trade deal by mid-November. The major traded 0.1 percent lower at 1.3127, having hit a high of 1.3152 on Wednesday, it’s highest since September 7. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3200, a break above could take it near 1.3243. On the downside, support is seen at 1.3085, a break below targets 1.3030. Against the euro, the pound was trading eased 0.05 percent at 90.22 pence, having hit a high of 90.11 on Wednesday, it’s highest since October 14.
AUD/USD: The Australian dollar declined from a 1-week peak as the greenback rebounded across the board. The Aussie trades 0.1 percent down at 0.7108, having hit a low of 0.7020 on Tuesday, it’s lowest since September 25. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7135, a break above could take it near 0.7151. On the downside, support is seen at 0.7070, a break below targets 0.7047.
NZD/USD: The New Zealand dollar rallied, hovering towards a 1-week peak hit in the previous session, after Reserve Bank of New Zealand's Simone Robbers expressed concern over potential further disruptions from the coronavirus and added that the RBNZ is looking at how to use its monetary policy and alternative monetary policy tools. The Kiwi traded 0.2 percent higher at 0.6665, having touched a low of 0.6552 on Tuesday, its lowest level since October 8. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6690, a break above could take it near 0.6720. On the downside, support is seen at 0.6613, a break below could drag it below 0.6600.
Equities Recap
Asian shares plunged as investors fretted over the slow pace of U.S. stimulus talks and a surge in global cases of COVID-19.
MSCI’s broadest index of Asia-Pacific shares outside Japan slumped 0.3 percent.
Tokyo's Nikkei eased 0.7 percent to 23,474.27 points, Australia's S&P/ASX 200 index declined 0.3 percent to 6,173.80 points. South Korea's KOSPI plunged 0.5 percent to 2,355.05 points.
Shanghai composite index fell 0.4 percent to 3,312.50 points, while CSI 300 index traded 0.3 percent down at 4,777.98 points.
Hong Kong’s Hang Seng traded 0.05 percent lower at 24,740.03 points. Taiwan shares added 0.3 percent to 12,917.03 points.
Commodities Recap
Crude oil prices declined, extending previous session losses, after a build in U.S. gasoline inventories pointed to a deteriorating outlook for fuel demand as coronavirus cases increased in North America and Europe. International benchmark Brent crude was trading 0.5 percent down at $41.50 per barrel by 0538 GMT, having hit a low of $41.43 on Wednesday, its lowest since October 12. U.S. West Texas Intermediate was trading 0.6 percent lower at $39.78 a barrel, after falling as low as $39.74 earlier, its lowest since October 15.
Gold prices eased from a more than 1-week high recorded in the last session, as the dollar recovered some lost ground after doubts emerged whether an agreement on a new U.S. fiscal coronavirus aid package could be reached before the election. Spot gold slumped 0.5 percent to $1,915.11 per ounce by 0541 GMT, having hit a high of $1931.40 on Wednesday, its highest since October 12. U.S. gold futures were down 0.7 percent to $1,916.00 per ounce.
Treasuries Recap
The U.S. Treasury yields eased, with the benchmark 10-year note yield trading at 0.811 percent and the 30-year yield at 1.614 percent.