Posted at 03 November 2020 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index eased after rising to a 1-month peak in the prior session amid political uncertainty ahead of U.S. elections. President Donald Trump and Democratic rival Joe Biden made a last-ditch push for votes in battleground states as their campaigns prepared for post-election disputes that could prolong a divisive presidential election. The greenback against a basket of currencies traded 0.2 percent down at 93.94, having touched a high of 94.28 on Monday, its highest since September 20.
EUR/USD: The euro rose, halting a 6-day losing streak after a survey showed yesterday manufacturing growth in the eurozone soared in October but the recovery from severely depressed activity at the height of the coronavirus pandemic was again mostly driven by Germany. On Monday, the major fell to a 1-month low as a second wave of coronavirus infections rolled across Europe, forcing more and more countries into lockdowns of varying severity. The European currency traded 0.1 percent higher at 1.1656, having touched a low of 1.1622 on Monday, its lowest since September 28. Investors’ attention will remain on a series of economic data from the Eurozone economies, ahead of the U.S. Presidential Election results, ISM-NY Business Conditions Index, IBD/TIPP Economic Optimism, and Factory Orders. 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 fourth straight session, as risk sentiment improved after data showed economic activity was improving across the board. U.S. manufacturing activity accelerated more than expected in October, with new orders jumping to their highest in nearly 17 years, while Chinese factory activity expanded the fastest in a decade and euro zone manufacturing also sped up. The major was trading 0.05 percent up at 104.72, having hit a high of 104.94 on Monday, its highest since October 26. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. Presidential Election results, ISM-NY Business Conditions Index, IBD/TIPP Economic Optimism, and Factory Orders. 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 steadied after tumbling to a near 4-week low in the prior session as Prime Minister Boris Johnson’s spokesman said that Britain is working with the European Union to close significant gaps in trade talks, as both sides seek to avoid a damaging breakdown in trade when a transition period ends on Dec. 31. On Monday, the British pound weakened after PM Johnson announced over the weekend that a 1-month lockdown across England would start on Thursday. The major traded 0.1 percent higher at 1.2927, having hit a low of 1.2853 on Monday, it’s lowest since October 7. 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 0.05 percent down at 90.14 pence, having hit a high of 89.84 on Friday, it’s highest since September 8.
AUD/USD: The Australian dollar declined after the country’s central bank cut interest rates and pledged to buy longer-term debt with the aim of lowering borrowing costs across a struggling economy. The Reserve Bank of Australia cut both the cash rate and its target for three-year yields by 15 basis points to 0.1 percent and also extended bond purchases out to the five- to 10-year tenors. The Aussie trades 0.1 percent down at 0.7044, having hit a low of 0.6991 on Monday, 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 0.7081 (10-DMA), a break above could take it near 0.7113 (21-DMA). On the downside, support is seen at 0.7002, a break below targets 0.6972.
NZD/USD: The New Zealand dollar steadied as the greenback eased across the board. The U.S. dollar eased from 1-month highs against a basket of peers on investor jitters over the outcome of Tuesday’s U.S. presidential election. The Kiwi traded flat at 0.6629, having touched a low of 0.6589 on Monday, 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 0.6659, a break above could take it near 0.6677. On the downside, support is seen at 0.6601, a break below could drag it below 0.6573.
Equities Recap
Asian shares rallied, supported by strong factory output data from major economies, while investors remained cautious ahead of the U.S presidential elections.
MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 1.0 percent.
Australia's S&P/ASX 200 index rallied 1.9 percent to 6,066.40 points. South Korea's KOSPI gained 1.9 percent to 2,343.25 points.
Shanghai composite index rose 1.3 percent to 3,267.51 points, while CSI 300 index traded 1.1 percent up at 4,771.77 points.
Hong Kong’s Hang Seng traded 2.3 percent higher at 25,017.28 points. Taiwan shares added 1.2 percent to 12,736.01 points.
Commodities Recap
Crude oil prices declined as worries about soaring COVID-19 cases, rapidly rising Libyan supply and U.S election concerns outweighed growing hopes that major producers would hold back on planned production increases. International benchmark Brent crude was trading 0.7 percent down at $38.96 per barrel by 0541 GMT, having hit a low of $36.38 on Monday, its lowest since May 29. U.S. West Texas Intermediate was trading 0.5 percent lower at $36.87 a barrel, after falling as low as $33.67 on Monday, its lowest since May 29.
Gold prices eased after rising nearly 1 percent in the previous session, as caution set in ahead of the U.S presidential elections. Spot gold was trading 0.2 percent down at $1,892.27 per ounce by 0547 GMT, having hit a low of $1860.80 on Thursday, its lowest since September 28. U.S. gold futures were trading 0.05 percent higher at $1,893.00 per ounce.
Treasuries Recap
The U.S. Treasury yields rose, with the benchmark 10-year note yield trading at 0.859 percent and the 30-year yield at 1.621 percent.