Posted at 02 November 2020 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index rallied to a 1-month peak, as investors prepared for U.S. presidential elections on Tuesday. Meanwhile, the novel coronavirus continues to ravage already-battered economies. The greenback against a basket of currencies traded 0.1 percent up at 94.14, having touched a high of 94.17 earlier, its highest since September 30.
EUR/USD: The euro slumped to a 1-month low after the European Central Bank president flagged further monetary easing in December. The selling pressure around the major intensified as surging COVID-19 cases forced national lockdowns in Germany and France and a regional lockdown in Spain. The European currency traded 0.1 percent lower at 1.1635, having touched a low of 1.1630 earlier, its lowest since September 28. Investors’ attention will remain on a series of economic data from the Eurozone economies, and EZ manufacturing PMI, ahead of the U.S. construction spending and manufacturing PMI by both Markit and ISM. Immediate resistance is located at 1.1672, a break above targets 1.1703. On the downside, support is seen at 1.1601, a break below could drag it below 1.1581.
USD/JPY: The dollar surged, extending gains for the third straight session, as Democrat Joe Biden holds a commanding national lead over President Donald Trump, but Trump has stayed competitive in the swing states that could decide the White House race. The major was trading 0.1 percent up at 104.72, having hit a low of 104.02 on Thursday, its lowest since September 21. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. construction spending and manufacturing PMI by both Markit and ISM. Immediate resistance is located at 105.05, a break above targets 105.20. On the downside, support is seen at 104.34, a break below could take it near at 104.12.
GBP/USD: Sterling declined after British Prime Minister Boris Johnson announced over the weekend a one-month lockdown across England. A senior cabinet member on Sunday stated that England’s lockdown aimed to last until Dec. 2 could be extended as Britain struggles to contain a second wave of COVID-19. The major traded 0.3 percent lower at 1.2907, having hit a low of 1.2880 on Thursday, it’s lowest since October 16. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2961, a break above could take it near 1.2984. On the downside, support is seen at 1.2867, a break below targets 1.2836. Against the euro, the pound was trading 0.2 percent down at 90.13 pence, having hit a high of 89.84 on Friday, it’s highest since September 8.
AUD/USD: The Australian dollar plunged to an over 3-month low, as the country's central bank is expected to cut interest rates to a fresh record low, reduce its three-year yield target and unleash further bond buying at its Tuesday’s meeting. The RBA will release its quarterly statement on monetary policy on Friday, which will contain its latest economic forecasts. The Aussie trades 0.3 percent down at 0.7005, having hit a low of 0.6995 earlier, it’s lowest since July 20. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7045, a break above could take it near 0.7068. On the downside, support is seen at 0.6972, a break below targets 0.6954.
NZD/USD: The New Zealand dollar slumped to a 1-1/2 week low after RBNZ Assistant Governor Christian Hawkesby said that the central bank is not bluffing when it says it may resort to negative interest rates. The RBNZ has said it may cut its cash rate into negative territory early next year to stoke inflation as the coronavirus pandemic drives up unemployment. The Kiwi traded 0.2 percent lower at 0.6600, having touched a low of 0.6590 earlier, its lowest level since October 21. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6632 (21-DMA), a break above could take it near 0.6652 (5-DMA). On the downside, support is seen at 0.6573, a break below could drag it below 0.6552.
Equities Recap
Asian shares rebounded from a 1-month low on solid data from China showing factory activity expanded at its fastest pace in a decade.
MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.5 percent.
Tokyo's Nikkei rose 1.4 percent to 23,295.48 points, Australia's S&P/ASX 200 index rallied 0.4 percent to 5,951.30 points. South Korea's KOSPI gained 1.5 percent to 2,300.15 points.
Shanghai composite index rose 0.05 percent to 3,226.39 points, while CSI 300 index traded 0.6 percent up at 4,722.71 points.
Hong Kong’s Hang Seng traded 1.1 percent higher at 24,377.69 points. Taiwan shares added 0.4 percent to 12,591.31 points.
Commodities Recap
Crude oil prices declined more than 3 percent to a 5-month low on worries the coronavirus lockdowns across Europe will weaken fuel demand, while traders braced for turbulence during the U.S. presidential election week. International benchmark Brent crude was trading 3.05 percent down at $36.70 per barrel by 0526 GMT, having hit a low of $36.39 earlier, its lowest since May 29. U.S. West Texas Intermediate was trading 3.4 percent lower at $34.51 a barrel, after falling as low as $33.67 earlier, its lowest since May 29.
Gold prices surged, extending previous session gains as caution crept in ahead of U.S. presidential elections on Tuesday, although a resilient dollar capped gains. Spot gold rose 0.2 percent to $1,882.21 per ounce by 0529 GMT, having hit a low of $1860.80 on Thursday, its lowest since September 28. U.S. gold futures were up 0.2 percent at $1,882.90 per ounce.
Treasuries Recap
The U.S. Treasury yields eased, with the benchmark 10-year note yield trading at 0.857 percent and the 30-year yield at 1.648 percent.