Market Roundup
- Oil falls on storage fears
- Gold prices ease on firmer equities
Economic Data Ahead
- No major Economic Data Releases
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index declined after some analysts stated that the greenback is likely to fall in the long term because the Fed has eased monetary policy more aggressively than other central banks. The greenback against a basket of currencies traded 0.4 percent down at 99.94, having touched a high of 100.87 on Friday, its highest since Apr. 6.
EUR/USD: The euro surged, extending the previous session rebound as investors await European Central Bank's policy meeting on Thursday, where it is likely to extend its debt purchases to include junk bonds. On Friday, the major plunged to a 1-month low after EU policymakers failed to reach a consensus on the details of a 1 trillion euro emergency fund. The European currency traded 0.2 percent up at 1.0846, having touched a low of 1.0727 on Friday, its lowest since Mar. 24. Investors’ attention will remain on the Dallas Fed manufacturing business index, amid a lack of economic data from the Eurozone docket. Immediate resistance is located at 1.0875, a break above targets 1.0890 (21-DMA). On the downside, support is seen at 1.0803, a break below could drag it below 1.0783.
USD/JPY: The Japanese yen surged to an 11-day peak after the Bank of Japan removed limits on its government bond purchases and increased corporate debt buying to combat the economic fallout from the coronavirus epidemic. The major was trading 0.2 percent down at 107.18, having hit a low of 107.17 earlier, its lowest since Apr. 16. Investors’ will continue to track the broad-based market sentiment, ahead of the Dallas Fed manufacturing business index. Immediate resistance is located at 107.75, a break above targets 107.90 (21-DMA). On the downside, support is seen at 107.01, a break below could take it near at 106.92.
GBP/USD: Sterling rallied to a 1-week peak as British Prime Minister Boris Johnson will resume work today after recovering from COVID-19, the illness caused by the coronavirus. Johnson is expected to announce plans for easing a month-old coronavirus lockdown as early as this week, the Telegraph reported. The major traded 0.7 percent up at 1.2440, having hit a low of 1.2247 on Tuesday, it’s lowest since April 9. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2486, a break above could take it near 1.2526. On the downside, support is seen at 1.2327, a break below targets 1.2298. Against the euro, the pound was trading 0.3 percent up at 87.22 pence, having hit a low of 88.63 on Tuesday, it’s lowest since April 1.
AUD/USD: The Australian dollar surged to a 6-1/2 week peak as markets ignored China’s downbeat Industrial Profit figures and cheered on upbeat sentiment concerning the ease of lockdown in Australia. Data out of China showed Industrial Profits (YoY) slumped 34.9 percent versus +5.40 percent prior during the March month. The Aussie trades 1.0 percent up at 0.6457, having hit a high of 0.6468 earlier, it’s highest since Mar. 12. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6492, a break above could take it near 0.6532. On the downside, support is seen at 0.6353 (10-DMA), a break below targets 0.6320.
Equities Recap
Asian shares rebounded as the Bank of Japan announced more stimulus steps to help cushion the economic impact of the coronavirus.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.8 percent.
Tokyo's Nikkei surged 2.7 percent to 19,783.22 points, Australia's S&P/ASX 200 index rose 1.5 percent to 5,321.40 points and South Korea's KOSPI gained 1.8 percent to 1,922.77 points.
Shanghai composite index rallied 0.3 percent to 2,815.49 points, while CSI 300 index traded 0.7 percent up at 3,822.77 points.
Hong Kong’s Hang Seng traded 1.8 percent higher at 24,266.11 points. Taiwan shares added 2.1 percent to 10,567.27 points.
Commodities Recap
Crude oil prices declined on signs that worldwide oil storage is filling rapidly, raising concerns that production cuts will not be enough to offset the collapse in demand from the coronavirus pandemic. International benchmark Brent crude was trading 5.6 percent lower at $20.63 per barrel by 0535 GMT, having hit a low of $15.91 on Wednesday, its lowest since June 1999. U.S. West Texas Intermediate was trading 12.9 percent down at $15.06 a barrel, after recording a historic decline last week.
Gold prices declined as risk appetite improved on further stimulus from Japan's central bank and countries considering easing of coronavirus-led restrictions. Spot gold eased 0.5 percent to $1,721.63 per ounce by 0542 GMT, having touched a high of $1,738.87 on Thursday, its highest since Apr. 14. U.S. gold futures rose 0.4 percent to $1,742.60.
Treasuries Recap
The Japanese government bond prices erased early losses to gain on Monday after the Bank of Japan expanded its monetary stimulus. The benchmark 10-year JGB futures rose 0.10 point to 152.81. In the cash bond market, the 10-year JGB yield fell 1 basis point to minus 0.035 percent. The five-year yield fell 0.5 basis point to minus 0.160 percent. The two-year JGB yield fell 0.5 basis point to minus 0.175 percent. The 20-year JGB yield rose 0.5 basis point to 0.310 percent, while the 30-year JGB yield rose 1 basis point to 0.425 percent. The 40-year JGB yield rose 0.5 basis point to 0.430 percent.
