Posted at 17 November 2020 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index slumped as policymakers' response to a record number of coronavirus cases, hospitalisations, and deaths in several U.S. states is likely to remain of greater concern. Investors now await the release of U.S. retail sales and industrial production later in the day to gauge the health of the economic recovery. The greenback against a basket of currencies traded 0.1 percent down at 92.52, having touched a low of 92.45 earlier, its lowest since November 9.
EUR/USD: The euro rose, extending gains for the fourth straight session after data showed the European Central Bank accelerated its bond-buying last week, with overall buying as well as buying under the pandemic emergency purchase programme (PEPP) reaching their highest levels since July. The European currency traded 0.1 percent higher at 1.1858, having touched a high of 1.1869 on Monday, its highest since November 9. Investors’ attention will remain on a series of economic data from the Eurozone economies, EZ construction output and ECB De Guindos' speech, ahead of the U.S. retail sales, import price index, export price index, industrial production, capacity utilization, business inventories, NAHB housing market index, and Fed's Chair Powell speech. Immediate resistance is located at 1.1890, a break above targets 1.1920. On the downside, support is seen at 1.1824, a break below could drag it below 1.1801 (10-DMA).
USD/JPY: The dollar declined, hovering towards a 1-week low hit in the prior session, as a return of coronavirus restrictions in some U.S. states and worries about a smooth transition for President-elect Joe Biden offset optimism about a coronavirus vaccine. There is some uncertainty about Biden's plans to tackle the coronavirus and stimulate the economy as the Trump administration resists cooperation with Biden's transition team. The major was trading 0.1 percent down at 104.48, having hit a low of 104.36 on Monday, its lowest since November 9. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. retail sales, import price index, export price index, industrial production, capacity utilization, business inventories, NAHB housing market index, and Fed's Chair Powell speech. Immediate resistance is located at 104.98 (5-DMA), a break above targets 105.34. On the downside, support is seen at 104.18, a break below could take it near at 104.02.
GBP/USD: Sterling rose above the 1.3200 handle on media reports the UK could reach a post-Brexit trade agreement with the European Union by early next week. The major traded 0.2 percent up at 1.3218, having hit a high of 1.3313 on Wednesday, it’s highest since September 4. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3252, a break above could take it near 1.3278. On the downside, support is seen at 1.3163, a break below targets 1.3147 (10-DMA). Against the euro, the pound was trading flat at 89.70 pence, having hit a high of 88.61 on Wednesday, it’s highest since May 15.
AUD/USD: The Australian dollar rallied to a 1-week peak after minutes from the Reserve Bank of Australia's most recent policy meeting showed the central bank was ready to provide yet more policy stimulus if needed after cutting rates to record lows. The Aussie trades 0.05 percent up at 0.7319, having hit a high of 0.7329 earlier, it’s highest since November 9. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7350, a break above could take it near 0.7373 On the downside, support is seen at 0.7282, a break below targets 0.7252 (10-DMA).
NZD/USD: The New Zealand dollar rose to a near 20-month high as investor sentiment was boosted by coronavirus vaccine hopes. The major recently gained strength after the Reserve Bank of New Zealand wrongfooted many investors last week by playing down the chance of negative rates. The Kiwi traded 0.05 percent higher at 0.6900, having touched a high of 0.6918 earlier, its highest level since March 2019. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6935 a break above could take it near 0.6958. On the downside, support is seen at 0.6872, a break below could drag it below 0.6856 (5-DMA).
Equities Recap
Asian shares rallied after Moderna said its experimental vaccine was 94.5 percent effective in preventing COVID-19 based on interim data from a late-stage trial.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.1 percent.
Tokyo's Nikkei surged 0.4 percent to 26,005.17 points, Australia's S&P/ASX 200 index gained 0.2 percent to 6,498.20 points. South Korea's KOSPI rallied 0.2 percent to 2,547.42 points.
Shanghai composite index fell 0.5 percent to 3,331.79 points, while CSI 300 index traded 0.6 percent down at 4,877.05 points.
Hong Kong’s Hang Seng traded 0.1 percent lower at 26,363.74 points. Taiwan shares added 0.3 percent to 13,593.01 points.
Commodities Recap
Crude oil prices surged, extending previous session gains on expectations OPEC and its allies will extend oil production cuts for at least three months, while sentiment was bolstered by news of another promising coronavirus vaccine. International benchmark Brent crude was trading 0.4 percent up at $44.10 per barrel by 0450 GMT, having hit a high of $45.27 on Wednesday, its highest since September 2. U.S. West Texas Intermediate was trading 0.3 percent higher at $41.55 a barrel, after rising as high as $43.18 on Wednesday, its highest since September 2.
Gold prices consolidated within narrow ranges, while investors weighed concerns over spiking coronavirus cases globally against optimism over positive developments around a second possible COVID-19 vaccine. Spot gold traded flat at $1,888.29 per ounce by 0453 GMT, having hit a low of $1850.53 on Monday, its lowest since September 28. U.S. gold futures were up 0.1 percent at $1,889.70.
Treasuries Recap
The U.S. Treasury yields rose, with the benchmark 10-year note yield trading at 0.913 percent and the 30-year yield at 1.672 percent.
The Australian government bond futures eased, with the 3-year bond contract down half a tick at 99.825. The 10-year contract fell 4 ticks to 99.07.
The New Zealand government bonds were sold off, sending yields about 6 basis points higher at the long-end of the curve.