Market Roundup
- Oil falls as China omits 2020 growth target
- Gold faces weekly decline on signs of growth picking up
Economic Data Ahead
- No Major Economic Releases
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index surged after a Chinese official stated that China is set to impose new national security legislation on Hong Kong after last year’s pro-democracy unrest. The greenback against a basket of currencies traded 0.2 percent up at 99.63, having touched a low of 99.00 on Wednesday, its lowest since May 4.
EUR/USD: The euro declined, extending previous session losses as data again showed the devastating impact of the coronavirus on the eurozone economy. Data released yesterday showed IHS Markit’s Flash Composite Purchasing Managers’ Index for EZ came in at 30.5 in May. The European currency traded 0.2 percent down at 1.0926, having touched a high of 1.1008 on Thursday, its highest since May 1. Immediate resistance is located at 1.0987, a break above targets 1.1020. On the downside, support is seen at 1.0902, a break below could drag it below 1.0880.
USD/JPY: The dollar eased as U.S.-China relations soured over a broad range of issues, including China’s treatment of the former British colony of Hong Kong and its response to the coronavirus pandemic, triggering risk aversion to spread. The major was trading 0.2 percent down at 107.44, having hit a high of 108.08 on Tuesday, its highest since Apr. 13. Immediate resistance is located at 107.87, a break above targets 108.10. On the downside, support is seen at 107.27 (10-DMA), a break below could take it near at 107.05 (21-DMA).
GBP/USD: Sterling tumbled, extending losses for the third straight session, as a combination of weak business activity data and the risk of sub-zero interest rates weighed on the British pound. The major traded 0.1 percent down at 1.2202, having hit a low of 1.2075 on Monday, it’s lowest since Mar. 26. Immediate resistance is located at 1.2266, a break above could take it near 1.2337 (21-DMA). On the downside, support is seen at 1.2165, a break below targets 1.2130. Against the euro, the pound was trading 0.1 percent up at 89.53 pence, having hit a low of 90.00 on Thursday, it’s lowest since March 27.
AUD/USD: The Australian dollar eased as China did not issue a growth target for 2020, the first time since it began publishing such goals in 1990, as the Chinese economy reels from the coronavirus. The Aussie trades 0.6 percent down at 0.6524, having hit a high of 0.6616 on Wednesday, it’s highest since March 9. Immediate resistance is located at 0.6584, a break above could take it near 0.6620. On the downside, support is seen at 0.6503 (10-DMA), a break below targets 0.6475 (21-DMA).
Equities Recap
Asian shares plunged after Beijing moved to impose a new security law on Hong Kong after last year’s pro-democracy unrest.
MSCI's broadest index of Asia-Pacific shares outside Japan dropped 1.2 percent.
Tokyo's Nikkei declined 0.8 percent to 20,388.16 points, Australia's S&P/ASX 200 index fell 0.9 percent to 5,497.00 points. South Korea's KOSPI fell 1.4 percent to 1,970.13 points.
Shanghai composite index eased 1.4 percent to 2,827.30 points, while CSI 300 index traded 1.8 percent down at 3,843.66 points.
Hong Kong’s Hang Seng traded 4.9 percent lower at 23,075.78 points. Taiwan shares shed 1.8 percent to 10,811.15 points.
Commodities Recap
Crude oil prices declined, hovering away from multi-week peaks after China failed to set an economic growth target for 2020. International benchmark Brent crude was trading 5.9 percent lower at $33.92 per barrel by 0526 GMT, having hit a high of $36.96 on Thursday, its highest since March 11. U.S. West Texas Intermediate was trading 7.1 percent down at $31.42 a barrel, after rising as high as $34.64 on Friday, its highest since March 11.
Gold prices steadied as an escalation in U.S.-China tensions underpinned the metal's safe-haven appeal, although positive economic data and easing lockdowns in some countries limited upside. Spot gold was trading 0.1 percent up at $1,729.28 per ounce by 0539 GMT, having touched a low of $1,717.56 on Thursday, its lowest since May 14. U.S. gold futures rose 0.3 percent to $1,726.50.
Treasuries Recap
The Japanese government bond prices were mixed amid growing risk-off sentiment. The benchmark 10-year JGB futures rose 0.08 point to 152.44, while the 10-year JGB yield edged down half a basis point to minus 0.010 percent. At the short-end of the market, the five-year yield fell 1 basis point to minus 0.145 percent while the two-year JGB yield ended flat at minus 0.180 percent. The superlong zone moved in a different direction, with the 30-year JGB yield gaining half a basis point to 0.445 percent, while the 20-year JGB yield and the 40-year JGB yield were unchanged at 0.315 percent and 0.460 percent, respectively.
