Market Roundup
- Gold steady on economic worries
- Oil steady as U.S. producers, refiners avoid worst of storm
Economic Data Ahead
- (0500 ET/0900 GMT) EZ Services Sentiment(Aug)
- (0500 ET/0900 GMT) EZ Consumer Confidence(Aug)
- (0500 ET/0900 GMT) EZ Industrial Confidence(Aug)
- (0500 ET/0900 GMT) EZ Business Climate(Aug)
- (0500 ET/0900 GMT) EZ Economic Sentiment Indicator(Aug)
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index eased following the Federal Reserve’s aggressive new strategy to lift employment and an increased tolerance for higher inflation. Powell’s comments were widely expected, but some traders were disappointed that the Fed did not reveal more details about how the new framework will work or provide any clues to what it will do at its next policy meeting. The greenback against a basket of currencies traded percent down at 92.64, having touched a low of 92.42 on Thursday, its lowest since August 19.
EUR/USD: The euro rose, halting a 2-day losing streak, as data released yesterday showed Euro zone corporate lending hovering near 11-year peak. The euro bloc's lending growth to non-financial corporations expanded by 7.0 percent in July compared with a year earlier, down from the 7.1 percent recorded in June but still not far from an 11-year-high. The European currency traded 0.5 percent higher at 1.1876, having touched a low of 1.1762 on Thursday, its lowest since August 21. Investors’ attention will remain on a series of data from the Eurozone economies and EZ economic sentiment indicator, consumer confidence and business climate, ahead of the U.S. personal consumption expenditures price index, goods trade balance, personal spending, personal income, wholesale inventories, Chicago Purchasing Managers' Index and Michigan Consumer Sentiment Index. Immediate resistance is located at 1.1910, a break above targets 1.1910. On the downside, support is seen at 1.1781, a break below could drag it below 1.1754.
USD/JPY: The dollar plunged from a 2-week peak scaled earlier in the session, as the number of Americans filing new claims for unemployment benefits hovered around 1 million last week, suggesting the labour market recovery was stalling as the COVID-19 pandemic drags. On Thursday, U.S. House of Representatives Speaker Nancy Pelosi said after talks with White House Chief of Staff Mark Meadows that Democrats and Republicans remained far apart over how much to spend on the next coronavirus relief legislation. The major was trading 0.3 percent down at 106.24, having hit a high of 106.94 earlier, its highest since August 14. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. personal consumption expenditures price index, goods trade balance, personal spending, personal income, wholesale inventories, Chicago Purchasing Managers' Index and Michigan Consumer Sentiment Index. Immediate resistance is located at 107.05, a break above targets 107.28. On the downside, support is seen at 106.00 (21-DMA), a break below could take it near at 105.74.
GBP/USD: Sterling surged as Brexit concerns eased after German Chancellor Angela Merkel, who holds the rotating presidency of the EU council, removed the subject from the agenda of a meeting of EU ambassadors next week due to a lack of progress in negotiations. The major traded 0.5 percent higher at 1.3269, having hit a high of 1.3284 on Thursday, it’s highest since December 2019. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3300, a break above could take it near 1.3335. On the downside, support is seen at 1.3141 (5-DMA), a break below targets 1.3108 (21-DMA). Against the euro, the pound was trading 0.1 percent down at 89.50 pence, having hit a high of 89.29 on Thursday, it’s lowest since June 16.
AUD/USD: The Australian dollar rallied to a 1-1/2 year high after Victoria state said it has detected 113 new cases in the past 24 hours, unchanged from the previous day, and well below the one-day record of 725 cases reported in early August. The Aussie trades 0.4 percent up at 0.7289, having hit a high of 0.7294 earlier in the session, it’s highest since January 2019. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7300, a break above could take it near 0.7344. On the downside, support is seen at 0.7227, a break below targets 0.7200 (10-DMA).
Equities Recap
Asian shares traded in a volatile market after the U.S. Federal Reserve shifted its policy framework to place more emphasis on boosting economic growth and less on worries about letting inflation run too high.
Tokyo's Nikkei declined 1.4 percent to 22,896.58 points, Australia's S&P/ASX 200 index fell 0.9 percent to 6,073.90 points. South Korea's KOSPI rallied 0.5 percent to 2,355.75 points.
Shanghai composite index rose 0.6 percent to 3,371.56 points, while CSI 300 index traded 1.4 percent up at 4,796.88 points.
Hong Kong’s Hang Seng traded 1.09 percent lower at 25,556.67 points. Taiwan shares shed 0.5 percent to 12,728.85 points.
Commodities Recap
Crude oil prices surged, halting a 2-day losing streak as U.S. producers had shut 1.56 million barrels per day (bpd) of crude output, while nine refineries had shut around 2.9 million bpd of capacity, ahead of the storm. International benchmark Brent crude was trading 1.05 percent up at $45.59 per barrel by 0442 GMT, having hit a high of $46.07 on Wednesday, its highest since August 5. U.S. West Texas Intermediate was trading flat at $42.97 a barrel, after rising as high as $43.75 on Wednesday, its highest since March 6.
Gold prices steadied after tumbling form a 1-week peak in the prior session as worries over an economic slump caused by the COVID-19 pandemic countered pressure from a jump in U.S. Treasury yields on Federal Reserve Chair Jerome Powell’s offer for more inflation tolerance. Spot gold was trading 0.7 percent higher at $1,942.19 per ounce by 0452 GMT, having hit a high of $1977.18 on Thursday, its highest since August 19. U.S. gold futures rose 0.2 percent to $1,936.30.
Treasuries Recap
The U.S. Treasury yields rose, with the benchmark 10-year note yield trading at 0.774 percent.
