Market Roundup
- Oil prices rebound as storage fills less rapidly than feared
- Gold gains on weaker dollar
Economic Data Ahead
- (0400 ET/0800 GMT) Italy Producer Price Index (YoY)(Mar)
- (0400 ET/0800 GMT) Italy Producer Price Index (MoM)(Mar)
- (0500 ET/0900 GMT) EZ Services Sentiment(Apr)
- (0500 ET/0900 GMT) EZ Consumer Confidence(Apr)
- (0500 ET/0900 GMT) EZ Private Loans (YoY)(Mar)
- (0500 ET/0900 GMT) EZ M3 Money Supply (3m)(Mar)
- (0500 ET/0900 GMT) EZ Industrial Confidence(Apr)
- (0500 ET/0900 GMT) EZ M3 Money Supply (YoY)(Mar)
- (0500 ET/0900 GMT) EZ Business Climate(Apr)
- (0500 ET/0900 GMT) EZ Economic Sentiment Indicator(Apr)
- (0500 ET/0900 GMT) Switzerland ZEW Survey - Expectations(Apr)
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index declined, hovering towards a near 2-week low as the slowing spread of the coronavirus and moves to re-open economies supported investor sentiment, ahead of major central bank meetings. The Federal Reserve is due to issue a statement at 1800 GMT, followed by a press conference with Chairman Jerome Powell at 1830 GMT. The greenback against a basket of currencies traded 0.3 percent down at 99.72, having touched a low of 99.45 on Tuesday, its lowest since Apr. 15.
EUR/USD: The euro surged after the European Central Bank stated that the eurozone banks expect emergency credit demand to surge again in the second quarter and they are likely to meet this with easier credit standards as government guarantees and liquidity measures kick in. The European currency traded 0.2 percent up at 1.0841, 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 economic sentiment indicator and consumer confidence, ahead of the U.S. prelim gross domestic product, personal consumption expenditures prices, pending home sales, and Fed interest rate decision. Immediate resistance is located at 1.0864, a break above targets 1.0884. On the downside, support is seen at 1.0803, a break below could drag it below 1.0783.
USD/JPY: The dollar plunged to a 6-week low after data showed U.S. consumer confidence tumbled to near a six-year low in April as strict coronavirus restrictions disrupted economic activity and threw millions of Americans out of work. Investors now await the U.S. Federal Reserve meeting later in the day for clues on the central bank’s future policy path after it responded to the economic devastation of the COVID-19 pandemic by cutting rates, buying bonds and backstopping credit markets. The major was trading 0.3 percent down at 106.56, having hit a low of 106.50 earlier, its lowest since Mar. 17. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. prelim gross domestic product, personal consumption expenditures prices, pending home sales, and Fed interest rate decision. Immediate resistance is located at 107.13, a break above targets 107.36 (5-DMA). On the downside, support is seen at 106.27, a break below could take it near at 105.94.
GBP/USD: Sterling rose as investors turned their attention to U.S. Federal Reserve and European Central Bank meetings this week at which officials are expected to provide further stimulus to their economies to fight the coronavirus. The major traded 0.4 percent up at 1.2468, 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 1.2497, a break above could take it near 1.2526. On the downside, support is seen at 1.2374, a break below targets 1.2351. Against the euro, the pound was trading flat at 87.02 pence, having hit a high of 86.88 on Tuesday, it’s highest since April 17.
AUD/USD: The Australian dollar rallied to a 7-week peak as China, its major export market, began reopening its economy as the coronavirus epidemic subsided there, and recent move by Canada, France, Italy New Zealand and Spain boosted investor confidence. The Aussie trades 0.7 percent up at 0.6535, having hit a high of 0.6547 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 0.6565, a break above could take it near 0.6589. On the downside, support is seen at 0.6450, a break below targets 0.6407 (5-DMA).
Equities Recap
Asian shares advanced as investors risk appetite improved amid easing coronavirus lockdowns in some parts of the world while oil prices rose on hopes demand will pick up.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.9 percent.
Australia's S&P/ASX 200 index rallied 1.5 percent to 5,393.40 points and South Korea's KOSPI gained 0.7 percent to 1,948.14 points.
Shanghai composite index rose 0.2 percent to 2,816.44 points, while CSI 300 index traded 0.2 percent up at 3,855.62 points.
Hong Kong’s Hang Seng traded 0.1 percent higher at 24,598.70 points. Taiwan shares rallied 1.5 percent to 10,772.22 points.
Commodities Recap
Crude oil prices surged after U.S. stockpiles rose less than expected and on expectations demand will increase as some European countries and U.S. cities moved to ease coronavirus lockdowns. International benchmark Brent crude was trading 1.4 percent higher at $21.10 per barrel by 0544 GMT, having hit a low of $15.91 last week, its lowest since June 1999. U.S. West Texas Intermediate was trading 2.5 percent up at $13.62 a barrel, after recording a historic decline last week.
Gold prices nudged higher as the dollar weakened amid plans to ease major economies out of coronavirus lockdowns, while investors awaited any forward guidance from the U.S. Federal Reserve’s policy statement due later in the day. Spot gold rose 0.1 percent to $1,711.10 per ounce by 0556 GMT, having touched a high of $1,738.87 on Thursday, its highest since Apr. 14. U.S. gold futures climbed 0.2 percent to $1,725.50 per ounce.
Treasuries Recap
On Tuesday, the benchmark 10-year yield was last down 4.4 basis points at 0.6098 percent, while the two-year U.S. Treasury yield was last down 2.1 basis points at 0.2092 percent.
