Market Roundup
- Oil extends gains on optimism for more US stimulus
- Gold eases amid upbeat risk sentiment
Economic Data Ahead
- (0330 ET/0730 GMT) EZ Construction PMI (SEP)
Key Events Ahead
- (0435ET/0835 GMT)ECB President Lagarde Speech
FX Beat
DXY: The dollar index steadied after tumbling to a 2-week trough earlier amid rising optimism that U.S. lawmakers could agree on new stimulus to blunt the economic impact of the coronavirus. The greenback against a basket of currencies traded 0.05 percent up at 93.45, having touched a low of 93.35 earlier, its lowest since September 21.
EUR/USD: The euro rallied to an over 1-week peak, amid growing expectations for more European Central Bank stimulus before year-end. The European currency traded 0.1 percent up at 1.1790, having touched a high of 1.1798 earlier, its highest since September 21. Investors’ attention will remain on series of economic data from the Eurozone economies, EZ construction PMI, and ECB President Lagarde Speech, ahead of the U.S. import and export figures, balance of trade, JOLTs Job Openings and Fed Chair Powell Speech. Immediate resistance is located at 1.1826, a break above targets 1.1852. On the downside, support is seen at 1.1755, a break below could drag it below 1.1740 (5-DMA).
USD/JPY: The dollar declined, retreating from a near 1-week peak hit in the prior session, as the renewed efforts in Congress to reach an agreement on relief funds for the pandemic-hit economy has been complicated by the spread of the coronavirus among key policymakers including Trump. The major was trading 0.1 percent down at 105.67, having hit a low of 104.94 on Friday, its lowest since September 23. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. import and export figures, balance of trade, JOLTs Job Openings and Fed Chair Powell Speech. Immediate resistance is located at 106.05, a break above targets 106.24. On the downside, support is seen at 105.51 (5-DMA), a break below could take it near at 105.31.
GBP/USD: Sterling rallied to a near 3-week peak as markets expect Britain and the European Union to meet the transition deadline and soon conclude a Brexit deal. British Prime Minister Boris Johnson and the head of the EU’s executive, Ursula von der Leyen, agreed in a phone call on Saturday to step up Brexit talks to close significant gaps barring a new trade partnership. The major traded up at 1.2983, having hit a high of 1.3001 earlier, it’s highest since September 16. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3035, a break above could take it near 1.3066. On the downside, support is seen at 1.2936, a break below targets 1.2899. Against the euro, the pound was trading 0.05 percent down at 90.77 pence, having hit a high of 90.25 last week, it’s highest since September 8.
AUD/USD: The Australian dollar declined after the country’s central bank left its cash rate at a record low but hinted further monetary easing remained under consideration to bolster the economy. The Reserve Bank of Australia kept the rate unchanged at 0.25 percent, as widely expected. The major rose to a 2-week peak earlier in the session after data showed domestic job advertisements climbed for the fifth straight month in September in a positive sign for the economy. The Australian government is due to release its federal budget later in the day, where it is expected to boost spending to support jobs and stimulate growth. The Aussie trades 0.06 percent up at 0.7174, having hit a high of 0.7209 earlier, it’s highest since September 22. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7222, a break above could take it near 0.7241. On the downside, support is seen at 0.7139, a break below targets 0.7110.
NZD/USD: The New Zealand dollar nudged higher on improving appetite for risk as traders increased bets that U.S. policymakers would reach a deal on another round of fiscal stimulus. Market sentiment also improved after U.S. President Donald Trump left the hospital and returned to the White House following treatment for COVID-19. The Kiwi traded 0.05 percent higher at 0.6648, having touched a high of 0.6658 earlier, its highest level since September 22. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6670, a break above could take it near 0.6690. On the downside, support is seen at 0.6615, a break below could drag it below 0.6593.
Equities Recap
Asian shares surged to a 2-week high after U.S. President Donald Trump was discharged from hospital following treatment for COVID-19 and on prospects for a fresh U.S. stimulus package.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.7 percent.
Tokyo's Nikkei gained 0.5 percent to 23,433.73 points, Australia's S&P/ASX 200 index rallied 0.35 percent to 5,962.10 points. South Korea's KOSPI surged 0.3 percent to 2,364.59 points.
Hong Kong’s Hang Seng traded 0.9 percent higher at 23,981.72 points. Taiwan shares added 1.2 percent to 12,704.23 points.
Commodities Recap
Crude oil prices rose, extending gains from the previous session on growing optimism for more U.S. fiscal stimulus to help lift the economy out of recession. International benchmark Brent crude was trading 0.05 percent up at $41.44 per barrel by 0513 GMT, having hit a low of $38.77 on Friday, its lowest since June 15. U.S. West Texas Intermediate was trading 0.05 percent higher at $39.36 a barrel, after falling as low as $36.66 on Friday, its lowest since September 9.
Gold prices declined, retreating from a near-2 week high hit in the previous session, as risk sentiment improved on Trump's health update and prospects of a U.S. stimulus package. Spot gold traded 0.1 percent down at $1,911.56 per ounce by 0522 GMT, having hit a high of $1918.69 on Monday, its highest since September 22. U.S. gold futures were little changed at $1,919.30.
Treasuries Recap
The U.S. Treasury yields dropped, with the benchmark 10-year note yield trading at 0.765 percent and the 30-year yield at 1.578 percent.
The Australian government bond futures declined, with the 10-year contract down three ticks to 99.0950, while the 3-year contract was steady at 99.775.
The yield on New Zealand 10-year government bonds rose two basis points to 0.558 percent.
