Market Roundup
- Oil plunges after record 19 million-barrel U.S. crude build
- Gold eases on stronger dollar
- Japan business confidence slumps to a decade low
- Australia's unemployment rate ticked up to 5.2 percent from 5.1 percent in February
Economic Data Ahead
- (0500 ET/0900 GMT) EZ Industrial Production w.d.a. (YoY)(Feb)
- (0500 ET/0900 GMT) EZ Industrial Production s.a. (MoM)(Feb)
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index rallied to a 1-week peak after U.S. data underlined fears that damage to the global economy from the coronavirus outbreak will be long and protracted. The greenback against a basket of currencies traded 0.2 percent up at 99.78, having touched a high of 100.00 earlier, its highest since Apr. 9.
EUR/USD: The euro declined, extending previous session losses, as the greenback surged amid growing concerns that the damage to the global economy from the outbreak will be protracted. The European currency traded 0.2 percent down at 1.0891, having touched a high of 1.0990 on Wednesday, its highest since April 1. Investors’ attention will remain on a series of economic data from the Eurozone economies and EZ industrial production, ahead of the U.S. building permits, housing starts, and unemployment benefits claims. Immediate resistance is located at 1.0931 (5-DMA), a break above targets 1.0951. On the downside, support is seen at 1.0856, a break below could drag it below 1.0838.
USD/JPY: The Japanese yen eased after data showed Japan's business confidence plunged to fresh decade lows in April as firms reported widespread damage from the coronavirus pandemic. The survey showed both manufacturers and service-sector firms in Japan likely to see a further sharp deterioration in business sentiment in the three months ahead. The major was trading 0.3 percent up at 107.74, having hit a low of 106.92 on Wednesday, its lowest since Apr. 1. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. building permits, housing starts, and unemployment benefits claims. Immediate resistance is located at 108.21 (10-DMA), a break above targets 108.42. On the downside, support is seen at 107.21, a break below could take it near at 106.92.
GBP/USD: Sterling slumped below the 1.2500 handle as investors realized it was too early to be optimistic about a recovery from the coronavirus crisis. Moreover, data showing British retail spending slumped by more than a quarter during the first two weeks of lockdown measures further dented the bid tone around the British pound. The major traded 0.1 percent down at 1.2498, having hit a high of 1.2647 on Tuesday, it’s highest since March 12. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2565, a break above could take it near 1.2624. On the downside, support is seen at 1.2414 (10-DMA), a break below targets 1.2379. Against the euro, the pound was trading flat at 87.09 pence, having hit a high of 86.81 on Tuesday, it’s highest since Mar. 10.
AUD/USD: The Australian dollar plunged to a 1-week low despite better-than-expected employment data. The economy's unemployment rate inched up to 5.2 percent from 5.1 percent in February, confounding expectations for a jump to 5.5 percent, while 5,900 net new jobs were added in March against predictions for a drop of 40,000. The Aussie trades 0.2 percent down at 0.6303, having hit a high of 0.6444 on Tuesday, it’s highest since Mar. 12. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6365 (5-DMA), a break above could take it near 0.6409. On the downside, support is seen at 0.6260, a break below targets 0.6264 (10-DMA).
Equities Recap
Asian shares slumped on the back of a coronavirus-driven plunge in U.S. retail sales and factory production and increasing gloomy economic outlooks for Asia.
MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.6 percent.
Tokyo's Nikkei eased 1.3 percent to 19,290.20 points, Australia's S&P/ASX 200 index declined 0.9 percent to 5,416.30 points and South Korea's KOSPI fell 0.05 percent to 1,857.07 points.
Shanghai composite index rose 0.3 percent to 2,819.94 points, while CSI 300 index traded 0.1 percent up at 3,802.38 points.
Hong Kong’s Hang Seng traded 0.6 percent lower at 24,014.67 points. Taiwan shares shed 0.7 percent to 10,375.48 points.
Commodities Recap
Crude oil prices declined, extending previous session losses after the United States reported its biggest weekly inventory build on record, while global demand is expected to decline to quarter-century lows due to the coronavirus pandemic. International benchmark Brent crude was trading 0.4 percent lower at $27.80 per barrel by 0543 GMT, having hit a high of $36.37 last week, its highest since March 11. U.S. West Texas Intermediate was trading 1.1 percent down at $19.93 a barrel, after falling as low as $19.27 on Wednesday, its lowest since Feb. 2002.
Gold prices consolidated within narrow ranges as the dollar firmed and investors booked profits, although losses were capped as U.S. soft retail sales and manufacturing data heightened fears of a steep global recession due to the new coronavirus. Spot gold traded flat at $1,715.98 per ounce by 0548 GMT, having touched a high of $1,747.72 on Tuesday, its highest since Nov. 2012. U.S. gold futures rose 0.2 percent to $1,743.30 per ounce.
Treasuries Recap
The Japanese government bond prices mostly edged higher, with the benchmark 10-year JGB futures rising 0.22 points to 152.35. The key 10-year cash JGB yield fell 1.5 basis points to zero percent. At the shorter end of the market, the five-year debt yield dropped 1.5 basis points to minus 0.115 percent, while the two-year yield stood flat at minus 0.160 percent. In the super-long zone, the 20-year and the 40-year yields lost half a basis point each to 0.340 percent and 0.475 percent, respectively, while the 30-year debt yield added half a basis point to 0.465 percent.
