Market Roundup
- Oil prices surge over 10% amid signs of U.S. fuel demand recovery
- Euro eases as investor await ECB meeting
Economic Data Ahead
- (0500 ET/0900 GMT) EZ Consumer Price Index - Core (YoY)(Apr) PREL
- (0500 ET/0900 GMT) EZ Gross Domestic Product s.a. (QoQ)(Q1) PREL
- (0500 ET/0900 GMT) EZ Consumer Price Index (YoY)(Apr) PREL
- (0500 ET/0900 GMT) EZ Gross Domestic Product s.a. (YoY)(Q1) PREL
- (0500 ET/0900 GMT) EZ Unemployment Rate(Mar)
- (0600 ET/1000 GMT) Italy Gross Domestic Product (YoY)(Q1) PREL
- (0600 ET/1000 GMT) Italy Gross Domestic Product (QoQ)(Q1) PREL
Key Events Ahead
- (0745 ET/1145 GMT) ECB Interest Rate Decision
- (0745 ET/1145 GMT) ECB Deposit Rate Decision
FX Beat
DXY: The dollar index plunged to a 2-week low as Fed Chairman Jerome Powell offered no optimistic words about how fast the country might recover from the near-record low unemployment and slump in the economy as the pandemic hit the United States. The greenback against a basket of currencies traded 0.1 percent down at 99.43, having touched a low of 99.40 earlier, its lowest since Apr. 15.
EUR/USD: The euro declined as investors continued to digest a monthly European Commission survey released yesterday showing Eurozone economic sentiment suffered its steepest ever decline in April, plunging by more than expected as coronavirus lockdowns brought much economic activity to a halt. The European currency traded 0.1 percent down at 1.0863, having touched a low of 1.0727 on Friday, its lowest since Mar. 24. Investors’ attention will remain on a series of economic data from the Eurozone economies, EZ gross domestic product, consumer price index, unemployment rate and ECB interest rate decision, ahead of the U.S. personal consumption expenditures - price index, unemployment benefit claims, personal income and spending. Immediate resistance is located at 1.0897 a break above targets 1.0913. On the downside, support is seen at 1.0841, a break below could drag it below 1.0813.
USD/JPY: The dollar slumped, extending losses for the seventh straight session after the U.S. Federal Reserve left the door open to more monetary easing and dampened expectations for a quick economic recovery from the coronavirus pandemic. However, the downside appears limited as positive trial results for a drug to treat COVID-19 boosted the appetite for riskier assets. The major was trading 0.1 percent down at 106.50, having hit a low of 106.35 on Wednesday, its lowest since Mar. 17. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. personal consumption expenditures - price index, unemployment benefit claims, personal income and spending. Immediate resistance is located at 106.93, a break above targets 107.14 (5-DMA). On the downside, support is seen at 106.21, a break below could take it near at 105.94.
GBP/USD: Sterling eased, reversing some of its previous session gains, as Britain showed no signs of easing its lockdown, even as other European countries laid out plans to re-open their economies. The major traded 0.1 percent down at 1.2455, having hit a high of 1.2518 on Tuesday, it’s highest since April 17. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2502, a break above could take it near 1.2526. On the downside, support is seen at 1.2406 (21-DMA), a break below targets 1.2377. Against the euro, the pound was trading flat at 87.23 pence, having hit a high of 86.88 on Tuesday, it’s highest since April 17.
AUD/USD: The Australian dollar rallied to an over 7-week peak, boosted by sign of improving risk sentiment among investors and on the country’s success in containing coronavirus infections. The Aussie trades 0.1 percent up at 0.6559, having hit a high of 0.6569 earlier, it’s highest since Mar. 10. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6589, a break above could take it near 0.6612. On the downside, support is seen at 0.6492, a break below targets 0.6454 (5-DMA).
Equities Recap
Asian shares surged to a 7-week high, boosted by encouraging early results from a COVID-19 treatment trial, while investors awaited a European Central Bank meeting later in the day.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 5.0 percent.
Tokyo's Nikkei rallied 2.1 percent to 20,193.69 points, Australia's S&P/ASX 200 index rose 2.4 percent to 5,522.40 points.
Shanghai composite index rose 1.3 percent to 2,860.08 points, while CSI 300 index traded 1.2 percent up at 3,912.58 points. Taiwan shares added 2.05 percent to 10,992.14 points.
Commodities Recap
Crude oil prices surged, extending previous session gains on signs the U.S. crude glut is not growing as quickly as expected and that gasoline demand started to pick up. International benchmark Brent crude was trading 17.32 percent higher at $26.23 per barrel by 0555 GMT, having hit a low of $15.91 last week, its lowest since June 1999. U.S. West Texas Intermediate was trading 12.65 percent up at $17.30 a barrel, after recording a historic decline last week.
Gold prices steadied as the U.S. Federal Reserve’s decision to keep interest rates near zero kept bullion above the $1,700 per ounce level. Spot gold rose 0.1 percent to $1,716.16 per ounce by 0557 GMT, having touched a high of $1,738.87 last week, its highest since Apr. 14. U.S. gold futures rose 0.8% to $1,726.80 per ounce.
Treasuries Recap
The Japanese government bond prices edged lower, as investors remained cautious of the pandemic’s economic impact. The benchmark 10-year JGB futures fell 0.02 point to 152.82. In the cash bond market, the 10-year JGB yield rose 0.5 basis point to minus 0.045 percent. At the shorter end of the market, the two-year JGB yield fell 0.5 basis point to minus 0.185 percent, while the five-year yield rose 1 basis point to minus 0.160 percent. The 20-year JGB yield rose 1 basis point to 0.300 percent, and the 30-year JGB yield rose 0.5 basis point to 0.420 percent.
