Market Roundup
- Gold surges to seven-year peak
- Oil bounces as investors hunt bargains
Economic Data Ahead
- (0245 ET/0745 GMT) France Business Climate (Feb)
- (0600 ET/1100 GMT) UK CBI Distributive Trades Survey - Realized (MoM) (Feb)
Key Events Ahead
- N/A UK 10-y Bond Auction
FX Beat
DXY: The dollar index traded near a 1-week low as money markets priced in a Federal Reserve interest rate cut of 25 basis points in June. The greenback against a basket of currencies traded flat at 99.30, having touched a high of 99.91 on Thursday, its highest since April 21, 2017.
EUR/USD: The euro consolidated near a 1-1/2 week peak as the rapid spread of the coronavirus outside China drove fears of a pandemic and sent investors to the safety of safe-haven assets. The European currency traded flat at 1.0851, having touched a low of 1.0777 on Thursday, its lowest since May 2017. Investors’ attention will remain on German gross domestic product data, ahead of the U.S. Richmond Fed Manufacturing Index, consumer confidence and Fed Clarida's speech. Immediate resistance is located at 1.0888, a break above targets 1.0928 (21-DMA). On the downside, support is seen at 1.0800, a break below could drag it below 1.0783.
USD/JPY: The dollar steadied near a 1-week low as coronavirus cases rose in Italy and several Middle Eastern countries dealing with their first infections. The major was trading at 110.85, having hit a high of 112.22 on Thursday, its highest since April 25 2019. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. Richmond Fed Manufacturing Index, consumer confidence and Fed Clarida's speech. Immediate resistance is located at 111.12, a break above targets 111.59. On the downside, support is seen at 110.49 (10-DMA), a break below could take it near at 110.09.
GBP/USD: Sterling traded within narrow ranges as rising fears about the economic impact from the spreading coronavirus encouraged investors to seek safety in safe-haven assets. The major traded 0.1 percent up at 1.2941, having hit a low of 1.2848 on Thursday, it’s lowest since Nov. 27. Investors’ attention will remain on the trade negotiations, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2967 (10-DMA), a break above could take it near 1.2991 (21-DMA). On the downside, support is seen at 1.2907, a break below targets 1.2848. Against the euro, the pound was trading flat at 83.87 pence, having hit a low of 84.15 on Thursday, it’s lowest since Feb.12.
AUD/USD: The Australian dollar held firm above the 0.6600 handle as investors sharply raised bets that the growing fallout from the coronavirus outbreak would prompt U.S. interest rate cuts. The Aussie trades 0.2 percent up at 0.6618, having hit a low of 0.6584 on Monday, it’s lowest since March 2009. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6623 (23.6% retracement of 0.6750 and 0.6584), a break above could take it near 0.6647 (38.2% retracement). On the downside, support is seen at 0.6585, a break below targets 0.6568.
NZD/USD: The New Zealand dollar steadied after tumbling to a 4-month low in the prior session amid growing U.S. rate cut expectations. The Kiwi trades flat at 0.6341, having touched a low of 0.6303 on Monday, its lowest level since Oct. 17. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6374 (38.2% retracement of 0.6487 and 0.6303), a break above could take it near 0.6395 (50% retracement). On the downside, support is seen at 0.6282, a break below could drag it below 0.6255.
Equities Recap
Asian shares consolidate as some dealers cited a Wall Street Journal report on a possible vaccine, supporting sentiment.
MSCI's broadest index of Asia-Pacific shares outside Japan traded flat.
Tokyo's Nikkei fell 3.3 percent to 22,605.41 points, Australia's S&P/ASX 200 index slumped 1.6 percent to 6,866.60 points and South Korea's KOSPI rose 1.2 percent to 2,103.61 points.
Shanghai composite index eased 0.6 percent to 3,013.05 points, while CSI 300 index traded 0.2 percent down at 4,123.85 points.
Hong Kong’s Hang Seng traded 0.2 percent higher at 26,880.92 points. Taiwan shares added 0.05 percent to 11,540.23 points
Commodities Recap
Crude oil surged, halting a 3-day losing streak amid fears that the spreading coronavirus could wreak far greater economic damage than initially thought. International benchmark Brent crude was trading 0.6 percent higher at $56.50 per barrel by 0519 GMT, having hit a low of $55.12 on Monday, its lowest since Feb. 13. U.S. West Texas Intermediate was trading 0.7 percent up at $51.64 a barrel, after falling as low as $50.46 on Monday, its lowest since Feb. 12.
Gold prices eased after rising to its highest level in seven years as investors worried about global economic growth in the face of sharply rising coronavirus cases outside China. Spot gold was trading 0.2 percent down at $1,654.87 per ounce by 0524 GMT, having touched a high of $1689.38 on Monday, its highest since January 2013. U.S. gold futures jumped 1.7 percent to $1,676.80 an ounce.
Treasuries Recap
The benchmark 10-year Treasury yield fell to its lowest since July 2016.
The Australian bonds remained tad higher tracking a similar movement in the United States’ Treasuries amid a silent trading session that witnessed data of little economic significance. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, declined nearly 1 basis point to 0.919 percent, the yield on the long-term 30-year bond remained tad 1/2 basis point down at 1.506 percent and the yield on short-term 2-year too dipped 1/2 basis point to 0.655 percent.
