Market Roundup
- Oil eases as COVID-19 second wave worries intensify
- Gold declines on caution over U.S. coronavirus aid
Economic Data Ahead
- (0400 ET/0800 GMT) EZ Current Account n.s.a(Aug)
- (0400 ET/0800 GMT) EZ Current Account s.a(Aug)
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index steadied as U.S. House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin continued to narrow their differences in a telephone conversation on Monday. The greenback against a basket of currencies traded 0.05 percent up at 93.48, having touched a high of 93.90 on Thursday, its highest since October 2.
EUR/USD: The euro rose, extending previous session gains, as the greenback eased ahead of a Tuesday deadline to reach agreement on a U.S. coronavirus aid package. The European currency traded 0.1 percent higher at 1.1778, having touched a high of 1.1793 on Monday, its highest since October 13. Investors’ attention will remain on series of economic data from the Eurozone economies and EZ current account, ahead of the U.S. Building Permits, Housing Starts and Fed's Quarles speech. Immediate resistance is located at 1.1797, a break above targets 1.1815. On the downside, support is seen at 1.1742, a break below could drag it below 1.1719.
USD/JPY: The dollar rose to a 1-week peak as investors await to see if the final debate between U.S. President Donald Trump and his Democratic challenger Joe Biden on Thursday shifts the trajectory of the election. However, the upside in the pair appears limited as investors grew cautious about prospects of a stimulus deal in Washington. The major was trading 0.1 percent up at 105.61, having hit a high of 105.61 earlier, its highest since October 13. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. Building Permits, Housing Starts and Fed's Quarles speech. Immediate resistance is located at 105.80, a break above targets 106.00. On the downside, support is seen at 105.23, a break below could take it near at 104.94.
GBP/USD: Sterling rose, extending gains for the third straight session, as hopes grew that British and European negotiators might be able to salvage post-Brexit trade talks. Michel Barnier and David Frost, the lead EU and British negotiators, were discussing continuing trade talks over the phone on Monday. The major traded 0.1 percent higher at 1.2935, having hit a low of 1.2861 on Friday, it’s lowest since October 7. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2978, a break above could take it near 1.3030. On the downside, support is seen at 1.2861, a break below targets 1.2844. Against the euro, the pound was trading up at 90.93 pence, having hit a high of 90.07 on Wednesday, it’s highest since September 8.
AUD/USD: The Australian dollar slumped to a 3-week low as the central bank looks set to enhance monetary easing. Minutes of the Reserve Bank of Australia’s last policy meeting confirmed the Board had discussed cutting rates and buying longer-dated debt as a means to support the economy and restrain the currency. The Aussie trades 0.5 percent down at 0.7035, having hit a low of 0.7031 earlier, it’s lowest since September 28. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7086, a break above could take it near 0.7110 (5-DMA). On the downside, support is seen at 0.7016, a break below targets 0.7005.
NZD/USD: The New Zealand dollar plunged to a near 2-week low, after the RBNZ stated that it is actively preparing a package of additional monetary policy tools to use if needed, reaffirming that a Funding for Lending Programme (FLP), a lower or negative OCR, purchases of foreign assets, and interest rate swaps remain under consideration. The Kiwi traded 0.6 percent lower at 0.6567, having touched a low of 0.6562 earlier, its lowest level since October 8. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6620, a break above could take it near 0.6654. On the downside, support is seen at 0.6542, a break below could drag it below 0.6511.
Equities Recap
Asian shares tumbled as investors turned cautious heading into the U.S. election, while a deadline for Washington to pass an economic stimulus bill approached.
MSCI’s broadest index of Asia-Pacific shares outside Japan slumped 0.1 percent.
Tokyo's Nikkei fell 0.5 percent to 23,567.04 points, Australia's S&P/ASX 200 index declined 0.7 percent to 6,184.60 points. South Korea's KOSPI rallied 0.5 percent to 2,358.41 points.
Shanghai composite index rose 0.5 percent to 3,328.10 points, while CSI 300 index traded 0.8 percent up at 4,793.47 points.
Hong Kong’s Hang Seng traded 0.05 percent higher at 24,554.31 points. Taiwan shares shed 0.4 percent to 12,862.37 points.
Commodities Recap
Crude oil prices declined for a fourth straight day on worries a resurgence of coronavirus cases globally is stifling a promising recovery in fuel demand, while growing output from Libya added to abundant supply. International benchmark Brent crude was trading 0.5 percent down at $42.23 per barrel by 0501 GMT, having hit a low of $41.34 last week, its lowest since October 6. U.S. West Texas Intermediate was trading 0.05 percent lower at $40.68 a barrel, after falling as low as $39.07 last week, its highest since October 5.
Gold prices fell as caution set in ahead of the deadline to reach an agreement on a new U.S. coronavirus stimulus package and the upcoming presidential election. Spot gold declined 0.1 percent to $1,902.61 per ounce by 0506 GMT, having hit a low of $1894.60 earlier, its lowest since October 15. U.S. gold futures were down 0.3 percent at $1,905.20.
Treasuries Recap
The U.S. Treasury yields eased, with the benchmark 10-year note yield trading at 0.767 percent and the 30-year yield at 1.555 percent.
