Posted at 06 November 2020 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index steadied as Biden edged closer to victory but votes were still being counted in key states and Republican incumbent Donald Trump escalated efforts to cast doubt on the election’s integrity. The greenback against a basket of currencies traded 0.2 percent up at 92.68, having touched a low of 92.48 on Thursday, its lowest since October 21.
EUR/USD: The euro steadied after rising to a 2-week peak in the prior session amid uncertainty from the U.S. election. Democrat Joe Biden on Wednesday predicted victory over President Donald Trump after winning two critical U.S. states, while the Republican incumbent alleged fraud, filed lawsuits and demanded recounts in a race yet to be decided. The European currency traded 0.05 percent higher at 1.1822, having touched a high of 1.1859 on Thursday, its lowest since October 23. Investors’ attention will remain on a series of economic data from the Eurozone economies, ahead of the U.S. nonfarm payrolls, unemployment data, Wholesale Inventories and Consumer Credit Change. Immediate resistance is located at 1.1864, a break above targets 1.1880. On the downside, support is seen at 1.1764, a break below could drag it below 1.1742 (10-DMA).
USD/JPY: The dollar slumped to an 8-month low as investors braced for days or even weeks of uncertainty as Republican incumbent President Donald Trump opened a multi-pronged attack on vote counts in several states by pursuing lawsuits and a recount. Moreover, prospects of a divided Congress dimmed chances for immediate stimulus, driving expectations the Fed might need to fill the gap. The major was trading 0.05 percent down at 103.43, having hit a low of 103.36 earlier, its lowest since March 12. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. nonfarm payrolls, unemployment data, Wholesale Inventories and Consumer Credit Change. Immediate resistance is located at 103.80, a break above targets 104.15. On the downside, support is seen at 103.02, a break below could take it near at 102.85
GBP/USD: Sterling eased after the Bank of England increased its already huge bond-buying stimulus by 150 billion pounds and signalled more support ahead. The BoE kept its benchmark interest rate unchanged at 0.1 percent on Thursday but expanded its bond-buying programme by 150 billion pounds. BoE Governor Andrew Bailey said the central bank was ready to pump even more money into Britain’s economy if the outlook for inflation weakens. The major traded 0.1 percent lower at 1.3131, having hit a high of 1.3157 on Thursday, it’s highest since October 21. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3176, a break above could take it near 1.3208. On the downside, support is seen at 1.3082, a break below targets 1.3064. Against the euro, the pound was trading 0.1 percent down at 90.04 pence, having hit a high of 89.45 o Wednesday, it’s highest since September 7.
AUD/USD: The Australian dollar slumped, halting a 4-day winning streak, after the country's central bank nudged up its forecasts for near-term economic activity but warned that a drastic downturn in population growth meant the economy would be noticeably smaller than assumed pre-pandemic. The Reserve Bank of Australia in its statement of monetary policy said the recovery was underway as the country opened up from coronavirus lockdowns, but the path ahead would be uncertain. The Aussie trades 0.3 percent down at 0.7257, having hit a high of 0.7289 on Thursday, it’s highest since September 21. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7300, a break above could take it near 0.7324. On the downside, support is seen at 0.7210, a break below targets 0.7185.
NZD/USD: The New Zealand dollar rallied to a 1-1/2 month peak after RBNZ Survey showed NZ inflation expectations accelerate in Q4. The Reserve Bank of New Zealand’s Inflation Expectations crossed the previous 1.43 percent mark to 1.59 percent QoQ for the fourth quarter of 2020. The Kiwi traded 0.4 percent higher at 0.6781, having touched a high of 0.6788 earlier, its highest level since September 18. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6800, a break above could take it near 0.6823. On the downside, support is seen at 0.6740 (23.6% retracement), a break below could drag it below 0.6720.
Equities Recap
Asian shares rallied to a near 3-year peak in anticipation that a divided U.S. legislature would limit major policy changes and keep the status quo on economic policies.
MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.3 percent.
Tokyo's Nikkei surged 0.9 percent to 24,341.06 points, Australia's S&P/ASX 200 index rallied 0.8 percent to 6,190.20 points. South Korea's KOSPI eased 0.2 percent to 2,409.99 points.
Shanghai composite index fell 0.7 percent to 3,296.44 points, while CSI 300 index traded 0.6 percent down at 4,856.08 points.
Hong Kong’s Hang Seng traded 0.5 percent lower at 25,578.20 points. Taiwan shares added 0.4 percent to 12,978.53 points.
Commodities Recap
Crude oil prices declined nearly 2 percent as new lockdowns in Europe to contain the spread of the coronavirus disease raised questions about the outlook for crude demand, while markets remained on edge over the drawn-out vote counting in the U.S. election. International benchmark Brent crude was trading 1.7 percent down at $39.38 per barrel by 0456 GMT, having hit a high of $41.50 on Thursday, its highest since October 26. U.S. West Texas Intermediate was trading 1.8 percent lower at $37.80 a barrel, after rising as high as $39.34 on Thursday, its highest since October 27.
Gold prices eased after surging by more than 2 percent in the previous session, as the dollar gained, but was set for its best week since late July on hopes for more central bank economic support as investors bet on a divided U.S. Congress under a Biden presidency. Spot gold fell 0.6 percent to $1,937.04 per ounce by 0459 GMT, having hit a high of $1952.78 on Thursday, its highest since September 21. The safe-haven metal soared 2.4 percent the prior session on a dollar slide, setting it up for a 3.1 percent gain for the week. U.S. gold futures fell 0.4 percent to $1,939.00.
Treasuries Recap
The U.S. Treasury yields rose, with the benchmark 10-year note yield trading at 0.765 percent and the 30-year yield at 1.522 percent.