Market Roundup
- Oil rises on supply issues
- Gold steadies amid economic uncertainty
Economic Data Ahead
- (0400 ET/0800 GMT) Italy Retail Sales s.a. (MoM)(Aug)
- (0400 ET/0800 GMT) Itay Retail Sales n.s.a (YoY)(Aug)
Key Events Ahead
- (0810 ET/1210 GMT) ECB President Lagarde Speech
FX Beat
DXY: The dollar index declined after U.S. President Donald Trump cancelled talks on economic stimulus with Democrat lawmakers. Trump’s surprise decision to call off stimulus talks until after the November 3 presidential election heightened downside risks for the U.S. economy. The greenback against a basket of currencies traded 0.1 percent down at 93.70, having touched a low of 93.34 on Tuesday, its lowest since September 21.
EUR/USD: The euro steadied after tumbling from a 2-week peak in the previous session on dovish comments from the European Central Bank chief that raised expectations for further stimulus. ECB President Christine Lagarde said a second wave of the coronavirus pandemic risks are delaying the eurozone’s economic recovery, reinforcing expectations that more ECB stimulus is likely in the months ahead, especially given that euro zone inflation fell deeper into negative territory last month. The European currency traded 0.05 percent up at 1.1739, having touched a high of 1.1807 on Tuesday, its highest since September 21. Investors’ attention will remain on series of economic data from the Eurozone economies and ECB President Lagarde Speech, ahead of the FOMC minutes and Fed William's speech. Immediate resistance is located at 1.1760 (21-DMA), a break above targets 1.1797. On the downside, support is seen at 1.1705, a break below could drag it below 1.1684.
USD/JPY: The dollar rose, reversing most of its previous session losses, after Trump returned to the White House from hospital, where he received treatment for the coronavirus. Markets now await the minutes from the Fed’s most recent meeting and comments from several Fed speakers later in the day for further signs of how central bankers view the outlook. The major was trading 0.2 percent up at 105.74, having hit a low of 104.94 on Friday, its lowest since September 23. Investors’ will continue to track the broad-based market sentiment, ahead of the FOMC minutes and Fed William's speech. Immediate resistance is located at 106.05, a break above targets 106.24. On the downside, support is seen at 105.44 (21-DMA), a break below could take it near at 105.23.
GBP/USD: Sterling held firm after tumbling from a near 1-month peak in the prior session, amid optimism about Britain’s trade negotiations with the European Union, while investors pushed back expectations for when the Bank of England would cut interest rates below zero. The major traded up at 1.2897, having hit a high of 1.3007 on Tuesday, it’s highest since September 10. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2928, a break above could take it near 1.2978. On the downside, support is seen at 1.2836, a break below targets 1.2805. Against the euro, the pound was trading flat at 91.07 pence, having hit a high of 90.25 last week, it’s highest since September 8.
AUD/USD: The Australian dollar rose after slumping to a 1-week low earlier in the session on expectations that the Reserve Bank of Australia’s next move is to cut rates and buy more government debt. The Aussie trades 0.5 percent up at 0.7134, having hit a low of 0.7095 earlier, it’s lowest since September 29. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7156 (5-DMA), a break above could take it near 0.7192 (21-DMA). On the downside, support is seen at 0.7066, a break below targets 0.7028.
NZD/USD: The New Zealand dollar rebounded from a 1-week low, as the greenback eased after U.S. President Donald Trump abruptly broke off economic stimulus negotiations with lawmakers. The Kiwi traded 0.3 percent higher at 0.6599, having touched a high of 0.6658 on Tuesday, its highest level since September 22. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6622, a break above could take it near 0.6639 (21-DMA). On the downside, support is seen at 0.6552, a break below could drag it below 0.6535.
Equities Recap
Asian shares advanced after U.S. President Donald Trump cancelled talks with Democrats in a Tweet saying that negotiations will stop until after the election.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.2 percent.
Tokyo's Nikkei eased 0.05 percent to 23,422.82 points, Australia's S&P/ASX 200 index rallied 1.25 percent to 6,036.40 points. South Korea's KOSPI surged 0.9 percent to 2,386.94 points.
Hong Kong’s Hang Seng traded 0.8 percent higher at 24,182.96 points. Taiwan shares added 0.3 percent to 12,746.37 points.
Commodities Recap
Crude oil prices rose, supported by expected supply disruptions from a hurricane approaching the Gulf of Mexico and an oil worker strike in Norway, although dashed hopes for a fourth stimulus package to boost the coronavirus-hit economy by U.S. President Donald Trump limited gains. International benchmark Brent crude was trading 0.4 percent up at $42.04 per barrel by 0538 GMT, having hit a high of $42.81 on Tuesday, its highest since September 21. U.S. West Texas Intermediate was trading 0.6 percent higher at $40.01 a barrel, after rising as high as $40.83 on Tuesday, its highest since September 21.
Gold prices steadied, after hitting a 1-week low in the prior session, lifted by renewed fears over economic recovery after U.S. President Donald called off negotiations over the fourth stimulus package to boost the coronavirus-hit economy. Spot gold traded 0.4 percent up at $1,885.48 per ounce by 0544 GMT, having hit a high of $1921.27 on Tuesday, its highest since September 21. U.S. gold futures were down 1.05 percent at $1,889.00.
Treasuries Recap
The U.S. Treasury yields rose, with the benchmark 10-year note yield trading at 0.754 percent and the 30-year yield at 1.553 percent.
