America’s Roundup: Dollar treads water against euro, Wall Street gains, Gold dips to two-week low, Oil falls on demand concerns, U.S.-China tensions-May 28th,2020

Market Roundup

• U.S. stocks edge higher in choppy trading

• Canada April Building Permits (MoM) -17.1%   -13.2% previous

• US Redbook (YoY) -5.5% -9.5% previous

• US Redbook (MoM) -1.5%, -2.6% previous

• US Seevol Cushing Storage Report  -4.261M,-5.492M previous

• US May Richmond Services Index -48,    -87 previous

• US May Richmond Manufacturing Index -27, -53 previous

• US May Richmond Manufacturing Shipments-26,  -70 previous

• US May Dallas Fed Services Revenues  -28.1,-65.4 previous

• US May Texas Services Sector Outlook-41.7,  -81.7 previous

Looking Ahead - Events, Other Releases (GMT)

• 23:50 Japan foreign Investments in Japanese Stocks -223.2B previous

• 23:50 Japan foreign Bonds Buying -463.5B previous

 • 01:00 New Zealand May ANZ Business Confidence  -66.6 previous

• 01:00 New Zealand May NBNZ Own Activity  -55.1% previous

• 01:30 Australia Building Capital Expenditure (MoM) (Q1) -5.9% previous

• 01:30 Australia Plant/Machinery Capital Expenditure (QoQ) (Q1)  0.8% previous

• 01:30 Australia Private New Capital Expenditure (QoQ) (Q1) -2.6%,-2.8% previous

Looking Ahead - Events, Other Releases (GMT)

• No significant events

EUR/USD: The euro headed towards a two-month high against dollar on Wednesday after the European Commission proposed a coronavirus economic recovery package worth in total 1.85 trillion euros ($2.04 trillion).The euro has struggled since falling in March, when investors rushed for the safety of dollars. But analysts say the recovery fund proposals, if they can win over EU members sceptical of an earlier Franco-German plan, could push the euro higher. The euro rose as high as $1.1031 before falling to $1.0999, still up 0.16% against dollar. Immediate resistance can be seen at 1.1028 (Higher BB), an upside break can trigger rise towards 1.1060 (50 % fib ).On the downside, immediate support is seen at 1.0959 (38.2 % fib), a break below could take the pair towards 1.0888 (21 DMA).

GBP/USD: Sterling fell 1% on Wednesday as investors’ focus shifted back to the possibility of negative interest rates in Britain and on comments from government officials that not much progress had been made in Brexit negotiations. Britain told the European Union on Wednesday it needed to break a fundamental impasse to clinch a Brexit trade deal by the end of the year and said an agreement on fisheries might not be ready by July. Britain’s negotiator with the EU, David Frost, also reiterated that the UK would not extend the Brexit transition period beyond December. Immediate resistance can be seen at 1.2336 (50% fib), an upside break can trigger rise towards 1.2400 (Psychological level).On the downside, immediate support is seen at 1.2213 (Daily low), a break below could take the pair towards 1.2177 (26th May low).

USD/CAD: The Canadian dollar strengthened against the greenback on Wednesday to its highest in about two-and-a-half months, as reports of a European Union rescue fund supported investor sentiment, helping to offset a pullback in oil prices. The price of oil, one of Canada's major exports, fell after U.S. President Donald Trump said he was working on a strong response to China's proposed security law in Hong Kong. U.S. crude oil futures fell 1.5% to $33.82 a barrel after trading on Tuesday at their highest in more than two months. The Canadian dollar was up 0.1% at 1.3759 to the greenback . Immediate resistance can be seen at 1.3800 (Psychological level), an upside break can trigger rise towards 1.8037 (50% fib). On the downside, immediate support is seen at 1.3733 (38.2%fib), a break below could take the pair towards 1.3607 (23.6% fib).

USD/JPY: The dollar strengthened against the Japanese yen on Wednesday as worries about the U.S. response to China’s proposed security law and renewed protests in Hong Kong supported safe-haven demand for the greenback Financial markets have been caught in a tug-of-war between optimism and pessimism about the global outlook. Some investors are betting on a resumption of business activity following the crippling coronavirus pandemic that brought the global economy to a standstill, but others worry the threat of U.S. sanctions against China for its treatment of Hong Kong could easily worsen risk sentiment yet again. Strong resistance can be seen at 107.89 (38.2% fib), an upside break can trigger rise towards 108.38 (Higher BB).On the downside, immediate support is seen at 107.11 (21 DMA), a break below could take the pair towards 106.59 (50% Fib). 

Equities Recap

Euro zone stocks were buoyed on Wednesday by a 750-billion-euro ($824 billion) plan to prop up EU economies hammered by the coronavirus crisis, but falls for healthcare and technology stocks weighed on broader European markets.

UK's benchmark FTSE 100 closed up by 1.26 percent, Germany's Dax ended up by 1.33 percent, France’s CAC finished the day up by 1.78 percent.        

The Dow and S&P 500 rose on Wednesday, powered by banks stocks, as optimism for an economic recovery as lockdowns continued to ease overshadowed worries of simmering U.S.-China tensions.

Dow Jones closed up by 2.21 percent, S&P 500 closed down by 1.48percent, Nasdaq settled down   by 0.77 percent.

Treasuries Recap

U.S. Treasury yields fell on Wednesday as U.S. stock markets dropped, reversing an earlier increase in risk appetite.

Benchmark 10-year note yields fell three basis points to 0.672%.The yields have traded in a range from 0.543% to 0.785% since the beginning of April.

Commodities Recap

 Gold fell on Wednesday to its lowest price in two weeks as the easing of coronavirus restrictions around the world fed optimism that the global economy could rebound.

Spot gold  eased 0.1% to $1,709.50 per ounce by 1:07 p.m. EDT (1707 GMT). The session low was 1,693.22, its lowest since May 12.

Oil prices fell on Wednesday on concerns over how quickly fuel demand will recover even as lockdowns ease in many countries with falling coronavirus cases, with U.S.-China tensions adding to pressure.

Brent crude futures fell 40 cents, or 0.7%, to $35.77 by 0009 GMT, after falling 1.8% on Tuesday. U.S. West Texas Intermediate (WTI) crude futures were down 49 cents, or 1.2%, at $33.95 a barrel, having risen 3.3% the previous session.