Market Roundup
- Oil climbs as U.S. stockpiles shrink
- Gold dips on dollar bounce as U.S. election race tighten
Economic Data Ahead
- (0400 ET/0900 GMT) EZ Markit Services PMI(Oct)
- (0400 ET/0900 GMT) EZ Markit PMI Composite(Oct)
- (0430 ET/0930 GMT) UK Markit Services PMI(Oct)
- (0500 ET/1000 GMT) EZ Producer Price Index (YoY)(Sep)
- (0500 ET/1000 GMT) EZ Producer Price Index (MoM)(Sep)
- N/A European Commission releases Economic Growth Forecasts
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index rallied as uncertainty crept into the market amid growing suspense over the result of the U.S. presidential election. The greenback against a basket of currencies traded 0.6 percent up at 93.93, having touched a high of 94.30 earlier, its highest since September 28.
EUR/USD: The euro slumped to an over 3-month low as Eurozone finance ministers pledged to coordinate actions for economic recovery and keep fiscal policies loose next year as the second wave of the coronavirus pandemic is about to wreak fresh havoc on their economies. The European currency traded 0.4 percent lower at 1.1663, having touched a low of 1.1602 earlier, its lowest since Juy 24. Investors’ attention will remain on a series of economic data from the Eurozone economies, EZ service PMI, Producer Price Index and European Commission's Economic Growth Forecasts, ahead of the U.S. ADP Employment Change, Trade Balance, and service PMI by both Markit and ISM. Immediate resistance is located at 1.1797, a break above targets 1.1815. On the downside, support is seen at 1.1581, a break below could drag it below 1.1540.
USD/JPY: The dollar rallied to a 2-week peak after preliminary results suggested President Donald Trump has a slight edge over Democratic challenger Joe Biden in Florida. Investors were braced for the possibility that the election results may not become clear on Wednesday. The major was trading 0.4 percent up at 104.87, having hit a high of 105.34 earlier, its highest since October 21. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. ADP Employment Change, Trade Balance, and service PMI by both Markit and ISM. Immediate resistance is located at 105.50, a break above targets 105.74. On the downside, support is seen at 104.11, a break below could take it near at 103.92
GBP/USD: Sterling declined from near 2-week peaks as the European Union and Britain so far failed to reach an agreement on three persistent sticking points in Brexit talks. The major traded 0.5 percent lower at 1.2987, having hit a high of 1.2987 earlier, it’s highest since October 22. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3152, a break above could take it near 1.3174. On the downside, support is seen at 1.2905, a break below targets 1.2861. Against the euro, the pound was trading 0.1 percent down at 89.76 pence, having hit a high of 89.45 earlier, it’s highest since September 7.
AUD/USD: The Australian dollar slumped from a 3-week peak following a mostly dovish RBA. On Tuesday, the central bank cut rates to a record low of 0.1 percent as widely anticipated and said that they plan to buy A$100 B of 5y-10y bonds over the next 6 months. The Aussie trades 0.7 percent down at 0.7105, having hit a high of 0.7222 earlier, it’s highest since October 12. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7234, a break above could take it near 0.7265. On the downside, support is seen at 0.7028, a break below targets 0.7004.
NZD/USD: The New Zealand dollar plunged amid resurgent U.S. dollar demand. The incoming US election results indicated that the race is tighter than expected. Moreover, the announced delay in results from key states Wisconsin, Michigan and Pennsylvania fueled uncertainty about the actual outcome. The Kiwi traded 0.3 percent lower at 0.6652, having touched a high of 0.6743 earlier, its highest level since September 21. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6760, a break above could take it near 0.6780. On the downside, support is seen at 0.6601, a break below could drag it below 0.6573.
Equities Recap
Asian shares nudged higher as results from the U.S. presidential election proved far closer than polls had predicted, leaving the outcome utterly in doubt.
Tokyo's Nikkei surged 1.7 percent to 23,695.23 points, Australia's S&P/ASX 200 index eased 0.1 percent to 6,062.10 points. South Korea's KOSPI gained 0.6 percent to 2,357.71 points.
Shanghai composite index rose 0.2 percent to 3,276.26 points, while CSI 300 index traded 0.7 percent up at 4,812.08 points.
Hong Kong’s Hang Seng traded 0.4 percent higher at 25,028.17 points. Taiwan shares added 1.04 percent to 12,867.90 points.
Commodities Recap
Crude oil prices surged after industry data showed crude inventories in the United States dropped sharply, although growing suspense over the result of the U.S. presidential election limited upside. International benchmark Brent crude was trading 1.2 percent up at $40.57 per barrel by 0522 GMT, having hit a high of $40.67 earlier, its highest since October 28. U.S. West Texas Intermediate was trading 1.1 percent higher at $38.55 a barrel, after rising as high as $38.86 earlier, its highest since October 28.
Gold prices declined as the dollar strengthened as the incoming US election results indicated that the race is tighter than expected. Spot gold eased 0.5 percent to $1,900.42 per ounce by 0527 GMT, having hit a high of $1916.48 earlier, its highest since October 22. U.S. gold futures fell 0.7 percent to $1,897.10.
Treasuries Recap
The U.S. Treasury yields plunged, with the benchmark 10-year note yield trading at 0.808 percent and the 30-year yield at 1.593 percent.
