Market Roundup
•US manufacturing data adds to recovery hopes
• ADP falls short of expectations
•US Aug ADP Nonfarm Employment Change 428K,950K forecast, 167K previous
•Canada Labor Productivity (QoQ) (Q2) 9.8%,1.2% forecast,3.4% previous
•US Seevol Cushing Storage Report -1.368M,-0.010M previous
• US Aug ISM-New York Index 804.2, 807.8 previous
• US Aug ISM NY Business Conditions 42.9%, 53.5% previous
• US Jul Factory Orders (MoM) 6.4%, 9.9% previous
• US Jul Factory orders ex transportation (MoM) 2.1%. 4.4% previous
• US Cushing Crude Oil Inventories 0.110M, -0.279M previous
• US Durables Jul Excluding Defense (MoM) 10.1%,9.9% previous
• US Crude Oil Inventories -1.887M forecast, -4.689M previous
Looking Ahead - Economic Data (GMT)
•22:50 Australia Services PMI 48.1 forecast, 58.2 previous
•23:50 Japan Foreign Bonds Buying 957.4B previous
•23:50 Japan Foreign Investments in Japanese Stocks
•23:50 Japan Aug Services PMI 45.0 forecast, 45.4 previous
•01:30 Australia Jul Trade Balance 5.400B forecast, 8.202B previous
•01:30 Australia Jul Exports (MoM) 3% previous
•01:30 Australia Imports Jul (MoM ) 1% previous
•01:45 Chinese Composite PMI 54.1 previous
•01:45 Chinese Caixin Services PMI 54.1 previous
Looking Ahead - Events, Other Releases (GMT)
•No significant events
EUR/USD: The euro declined on Wednesday as the dollar bounced back following strong manufacturing data. Manufacturing activity in the United States increased more than expected in August, with new orders surging. But factory employment - which was already in decline before the coronavirus because of the Trump administration’s trade war with China continued to lag, in line with economists’ view that the labour market’s recovery is running out of steam. The euro, which on Tuesday rose above $1.20 for the first time since 2018, edged back down below $1.19. Immediate resistance can be seen at 1.1882 (5 DMA), an upside break can trigger rise towards 1.1946 (23.6% fib).On the downside, immediate support is seen at 1.1841(38.2% fib), a break below could take the pair towards 1.1800 (Psychological level).
GBP/USD: sterling fell against a rebounding US dollar on Wednesday as traders looked to speeches from several Bank of England officials for direction. Investors will be poring over speeches form five out of the nine Bank of England's monetary policy committee members including its governor Andrew Bailey for any fresh insight into its stance on negative interest rates. The BoE said last month negative rates are part of their monetary tool box but that it saw no immediate case to cut interest rates below zero. Sterling fell 0.2% against the dollar $1.3354, having risen to an eight month high above $1.34 the day prior. Immediate resistance can be seen at 1.3479 (Sep 1st high), an upside break can trigger rise towards 1.3500 (Psychological level).On the downside, immediate support is seen at 1.3268 (9 DMA), a break below could take the pair towards 1.3176 (23.6%fib).
USD/CAD: The Canadian dollar was little changed against its U.S. counterpart on Wednesday as higher oil prices offset broader gains for the greenback, with the loonie steadying after it pulled back from a near eight-month high the day before.U.S. crude prices were up 0.5% at $42.98 a barrel, while the U.S. dollar extended its rebound from a two-year low against a basket of major currencies. The loonie was trading nearly unchanged at 1.3065 to the greenback, or 76.54 U.S. cents. The currency, which on Tuesday posted its strongest intraday level since Jan. 8 at 1.2990, traded in a range of 1.3053 to 1.3084.Immediate resistance can be seen at 1.3096 (2nd Sep high), an upside break can trigger rise towards 1.3118 (11vDMA).On the downside, immediate support is seen at 1.3012 (23.6%fib), a break below could take the pair towards 1.3000 (Psychological level).
USD/JPY: The dollar rose against the Japanese yen on Wednesday as greenback rebounded and strong US manufacturing data raised hopes of a swifter global economic recovery. The dollar index rebounded from a two year low after data revelled that manufacturing activity in the US increased more than expected in August, which followed similar positive indicators this week from China and Europe. The yen was last down 0.02 % at 106.33. Strong resistance can be seen at 106.32 (Daily high), an upside break can trigger rise towards 106.81 (50%fib).On the downside, immediate support is seen at 105.96 (11DMA), a break below could take the pair towards 105.55 (38.2%fib).
Equities Recap
European shares gained on Wednesday after losing for four straight sessions, with media and entertainment stocks bouncing back from steep losses in the prior session..
UK's benchmark FTSE 100 closed up by 1.35 percent, Germany's Dax ended down by 2 .07 percent, France’s CAC finished the day up by 1.90 percent.
The S&P 500 closed higher on Wednesday for the ninth time in the past 10 sessions, with defensive and value stocks taking their turns to lead the gains after data showed U.S. private payrolls expanded last month, but at a much slower pace than expected.
Dow Jones closed up by 1.59 percent, S&P 500 ended up by 1.54 percent, Nasdaq finished the up by 0.98 percent.
Treasuries Recap
Longer-term U.S. Treasury yields tumbled on Wednesday, flattening the yield curve, as the market awaited the release of August employment data later this week.
The benchmark 10-year yield was last down 1.8 basis points at 0.6526%, while the 30-yield fell 4.8 basis points to 1.3763%.
Commodities Recap
Gold backtracked on Wednesday from a near two-week high in the prior session as the dollar rebounded and strong U.S. manufacturing data raised hopes of a swifter global economic recovery.
Spot gold fell 0.7% to $1,957.15 per ounce by 1133 GMT, after hitting its highest since Aug. 19 at $1,991.91 on Tuesday.U.S. gold futures dropped 0.6% to $1,966.70.
Oil fell more than 2% on Wednesday, reversing early gains after a report showed gasoline demand fell in the United States in the latest week.
Brent crude , the global benchmark, fell $1.15, or 2.5%, to settle at $44.43 a barrel, after two days of price gains. U.S. West Texas Intermediate settled lower by $1.25, or 2.9%, to $41.51 a barrel.
