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Asia Roundup: Antipodeans gain on renewed coronavirus vaccine hopes, greenback plunges as investors await Fed meeting, Asian shares surge - Monday September 14th, 2020

Market Roundup

  • Gold gains on weaker dollar
     
  • Oil gains as storm threatens U.S. gulf production
     

Economic Data Ahead

  • (0500 ET/0900 GMT) EZ Industrial Production w.d.a. (YoY)(Jul)   
     
  • (0500 ET/0900 GMT) EZ Industrial Production s.a. (MoM)(Jul)
     

Key Events Ahead

  • No Significant Events Scheduled

FX Beat

DXY: The dollar declined amid growing expectations of further monetary easing by the Federal Reserve at its two-day policy meeting. The greenback against a basket of currencies traded 0.1 percent down at 93.18, having touched a low of 92.70 on Thursday, its lowest since September 4.

EUR/USD: The euro rose, extending gains for the fourth straight session as investors continued to digest European Central Bank President Christine Lagarde's comments, citing Eurozone governments must keep spending heavily to aid the bloc’s recovery from its historic pandemic-induced recession. Investors pushed the euro higher after the ECB showed no sign of stemming the single currency’s appreciation. The European currency traded 0.05 percent higher at 1.1845, having touched a high of 1.1917 on Thursday, its highest since September 2. Investors’ attention will remain on a series of data from the Eurozone economies and EZ industrial production, amid a lack of economic data from the U.S. docket. Immediate resistance is located at 1.1870, a break above targets 1.1902. On the downside, support is seen at 1.1809 (5-DMA), a break below could drag it below 1.1765.

USD/JPY: The Japanese yen surged as investors awaited Japan’s ruling party to choose a successor to Prime Minister Shinzo Abe. Japanese Chief Cabinet Secretary Yoshihide Suga is poised to become head of Japan’s ruling party and prime minister on Wednesday. The U.S. Federal Reserve and the Bank of Japan will announce their policy decisions on Wednesday and Thursday, respectively. The major was trading 0.1 percent lower at 106.03, having hit a low of 105.78 Wednesday, its lowest since September 1. Investors’ will continue to track the broad-based market sentiment, amid a lack of significant economic data out of the U.S. calendar. Immediate resistance is located at 106.40, a break above targets 106.70. On the downside, support is seen at 105.87, a break below could take it near at 105.60.

GBP/USD: Sterling steadied after tumbling to a 1-1/2 month low in the prior session on fears that Britain will end its post-Brexit transition period without agreeing any trading arrangements. Last week, London explicitly acknowledged that it could break international law by ignoring some parts of its European Union divorce treaty. The major traded 0.2 percent up at 1.2819, having hit a low of 1.2762 on Friday, it’s lowest since July 24.  Immediate resistance is located at 1.2880, a break above could take it near 1.2930. On the downside, support is seen at 1.2741, a break below targets 1.2700. Against the euro, the pound was trading 0.2 percent up at 92.29 pence, having hit a low of 92.91 on Friday, it’s lowest since March 24.

AUD/USD: The Australian dollar rose, extending previous session gains, as risk sentiment improved on renewed hopes for a coronavirus vaccine after AstraZeneca resumed its phase-3 trial. AstraZeneca said on the weekend it has resumed British clinical trials of its COVID-19 vaccine after getting the approval from safety watchdogs. The Aussie trades 0.05 percent up at 0.7280, having hit a high of 0.7280 on Thursday, it’s highest since September 3. Immediate resistance is located at 0.7310, a break above could take it near 0.7327. On the downside, support is seen at 0.7230, a break below targets 0.7215.

NZD/USD: The New Zealand dollar surged as investors focus on whether the country's central bank stimulus will in fact flow into the real economy, boosting inflation and employment in line with its monetary policy mandate. The Kiwi trades 0.5 percent higher at 0.6695, having touched a low of 0.6601 on Wednesday, its lowest level since August 27. Immediate resistance is located at 0.6722, a break above could take it near 0.6742. On the downside, support is seen at 0.6637 (21-DMA), a break below could drag it below 0.6612.

Equities Recap

Asian shares jumped, extending gains for the second straight session on renewed hopes for a coronavirus vaccine after AstraZeneca resumed its phase-3 trial.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.7 percent.

Tokyo's Nikkei surged 0.6 percent to 23,548.73 points, Australia's S&P/ASX 200 index rallied 0.6 percent to 5,891.50 points. South Korea's KOSPI advanced 1.2 percent to 2,425.10 points.

Shanghai composite index rose 0.4 percent to 3,272.96 points, while CSI 300 index traded 0.4 percent up at 4,643.55 points.

Hong Kong’s Hang Seng traded 0.6 percent higher at 24,658.34 points. Taiwan shares added 0.9 percent to 12,787.82 points.

Commodities Recap

Crude oil prices surged as a tropical storm in the Gulf of Mexico forced rigs to shut down, although wider concerns about excess supply and falling demand for fuels limited the upside. International benchmark Brent crude was trading 0.4 percent up at $39.93 per barrel by 0459 GMT, having hit a low of $39.29 on Tuesday, its lowest since June 16. U.S. West Texas Intermediate was trading 0.6 percent higher at $37.53 a barrel, after falling as low as $36.15 on Tuesday, its lowest since June 15.

Gold prices rallied, reversing most of its previous session losses, supported by a weaker dollar and expectations that the U.S. Federal Reserve will adopt a dovish stance at its two-day monetary policy meeting later this week. Spot gold was trading 0.3 percent up at $1,945.94 per ounce by 0504 GMT, having hit a high of $1966.57 on Thursday, its highest since September 2. U.S. gold futures climbed 0.6 percent to $1,958.60.

Treasuries Recap

The U.S. Treasury yields declined, with the benchmark 10-year note yield trading at 0.667 percent.

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