Market Roundup
- Gold off 2-month low on U.S. stimulus hopes
- Oil set for a weekly fall on COVID-19 resurgence concerns
Economic Data Ahead
- (0400 ET/0800 GMT) EZ Private Loans (YoY)(Aug)
- (0400 ET/0800 GMT) EZ M3 Money Supply (3m)(Aug)
- (0400 ET/0800 GMT) EZ M3 Money Supply (YoY)(Aug)
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index held firm after easing from a 2-month peak scaled in the prior session, as renewed hopes of fresh U.S. stimulus eased investors’ concerns about its economic recovery. The greenback against a basket of currencies traded 0.05 percent up at 94.35, having touched a high of 94.59 on Thursday, its highest since July 24.
EUR/USD: The euro steadied near a 2-month trough amid speculations that the European Central Bank will roll out more stimulus as worries grew over the economic impact of a second wave of COVID-19 infections. Market expectations of long term eurozone inflation was at its lowest level in nearly two months at 1.1544 percent, well below the ECB's target of just below 2 percent. The European currency traded flat at 1.1663, having touched a low of 1.1626 on Thursday, its lowest since July 24. Investors’ attention will remain on a series of data from the Eurozone economies, EZ private loans and M3 money supply, ahead of the U.S. durable goods and Fed William's speech. Immediate resistance is located at 1.1695, a break above targets 1.1725. On the downside, support is seen at 1.1626, a break below could drag it below 1.1595.
USD/JPY: The dollar surged to a 1-1/2 week peak, as a Wall Street Journal report that House of Representatives Democrats were preparing a $2.4 trillion stimulus package added to hopes after Federal Reserve Chair Jerome Powell and Treasury Secretary Steven Mnuchin said hundreds of billions of dollars in unused coronavirus aid funds could be reallocated to help U.S. households and businesses. The major was trading 0.05 percent up at 105.40, having hit a high of 105.54 earlier, its highest since September 15. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. durable goods and Fed William's speech. Immediate resistance is located at 105.65 (21-DMA), a break above targets 105.97. On the downside, support is seen at 105.18 (10-DMA), a break below could take it near at 104.97 (5-DMA).
GBP/USD: Sterling rose, extending previous session gains, after Britain’s government launched scaled-back job support for workers hit by a resurgent COVID-19 pandemic. British finance Minister Rishi Sunak announced a new jobs support scheme that would help firms employ people on shorter hours. Britain’s existing furlough scheme, which supported around 9 million jobs at its peak in May, is due to stop at the end of next month. The major traded 0.2 percent up at 1.2758, having hit a low of 1.2675 on Wednesday, it’s lowest since July 23. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2793, a break above could take it near 1.2815. On the downside, support is seen at 1.2710, a break below targets 1.2673. Against the euro, the pound was trading flat at 91.46 pence, having hit a high of 91.13 on Thursday, it’s highest since September 17.
AUD/USD: The Australian dollar rose, halting a 5-day losing streak, as the U.S. dollar eased on downbeat initial jobless claims and ongoing concerns about a lack of additional fiscal stimulus. On Thursday, the major plunged to a near 2-month low on expectations for additional monetary easing by the RBA. The Aussie trades 0.3 percent up at 0.7064, having hit a low of 0.7016 the day before, it’s lowest since July 21. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7095 (23.6% retracement of 0.7345 and 0.7016), a break above could take it near 0.7143 (38.2% retracement). On the downside, support is seen at 0.7011, a break below targets 0.6984.
NZD/USD: The New Zealand dollar rebounded from a near 1-month trough as the greenback weakened across the board. The number of Americans filing new claims for unemployment benefits unexpectedly increased last week in a sign the economic recovery was running out of steam. The Kiwi traded 0.3 percent higher at 0.6557, having touched a low of 0.6511 on Thursday, its lowest level since August 20. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6580 (23.6% retracement of 0.6797 and 0.6511), a break above could take it near 0.6621. On the downside, support is seen at 0.6509, a break below could drag it below 0.6488.
Equities Recap
Asian shares surged after robust U.S. housing data supported a late tech-driven rally on Wall Street.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6 percent.
Tokyo's Nikkei rose 0.6 percent to 23,219.54 points, Australia's S&P/ASX 200 index gained 1.3 percent to 5,950.50 points. South Korea's KOSPI rallied 0.6 percent to 2,285.82 points.
Shanghai composite index fell 0.3 percent to 3,213.52 points, while CSI 300 index traded 0.1 percent down at 4,562.67 points.
Hong Kong’s Hang Seng traded 0.2 percent lower at 23,267.19 points. Taiwan shares added 0.2 percent to 12,237.79 points.
Commodities Recap
Crude oil prices surged but were on track for a weekly fall on concerns that a global resurgence of COVID-19 infections will constrain fuel demand. International benchmark Brent crude was trading 0.9 percent up at $42.14 per barrel by 0431 GMT, having hit a high of $43.77 last week, its highest since September 4. U.S. West Texas Intermediate was trading 0.9 percent higher at $40.52 a barrel, after rising as high as $41.46 last week, its highest since September 4.
Gold prices nudged higher on renewed hopes of more U.S. stimulus measures, although it was on track for its biggest weekly decline in more than a month pressured by a stronger dollar. Spot gold was trading 0.2 percent higher at $1,871.47 per ounce by 0436 GMT, having hit a low of $1848.84 on Thursday, its lowest since July 22. But the metal was set for a weekly loss of 4.1 percent so far. U.S. gold futures were down 0.1 percent to $1,874.45.
Treasuries Recap
The U.S. Treasury yields were little changed, with the benchmark 10-year note yield trading at 0.674 percent.
