Market Roundup
- U.S. crude futures turn positive after a historic decline
- Gold drops on firm dollar
- RBA Governor: Australia's economy to shrink 10% in first half of 2020
- Australia loses 6% of jobs to coronavirus crisis
Economic Data Ahead
- (0500 ET/0900 GMT) EZ ZEW Survey - Economic Sentiment(Apr)
- (0500 ET/0900 GMT) Germany ZEW Survey - Current Situation(Apr)
- (0500 ET/0900 GMT) Germany ZEW Survey - Economic Sentiment(Apr)
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index surged as the U.S. Congress inched toward a $450 billion deal to help small businesses and hospitals hurt by the coronavirus as the Senate set a Tuesday session for a potential vote on it. The greenback against a basket of currencies traded 0.2 percent up at 100.12, having touched a high of 100.30 on Thursday, its highest since Apr. 8.
EUR/USD: The euro declined as members of the European Union struggled to reach consensus on how to financially support countries hardest hit but the virus, such as Italy and Spain. European Union officials will discuss on Thursday the bloc’s response to the economic damage caused by the virus crisis. Data due later in the day is expected to show German investor sentiment remained weak in April because of the coronavirus pandemic. The European currency traded 0.2 percent down at 1.0839, having touched a low of 1.0812 on Friday, its lowest since April 7. Investors’ attention will remain on a series of economic data from the Eurozone economies and EZ ZEW Survey, ahead of the U.S. existing home sales. Immediate resistance is located at 1.0891 (5-DMA), a break above targets 1.0905 (21-DMA). On the downside, support is seen at 1.0816, a break below could drag it below 1.0772.
USD/JPY: The dollar eased as coronavirus infections showed tentative signs of peaking in some places, while countries struggled to decide how to re-open their economies for business. However, concerns about the health of North Korean leader Kim Jong Un following media reports that he was receiving treatment after undergoing a cardiovascular procedure supported the dollar. The major was trading 0.1 percent down at 107.44, having hit a low of 106.92 on Wednesday, its lowest since Apr. 1. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. existing home sales figures. Immediate resistance is located at 108.13 (10-DMA), a break above targets 108.42. On the downside, support is seen at 107.21, a break below could take it near at 106.92.
GBP/USD: Sterling plunged to a near 2-week low as Britain’s death toll from the novel coronavirus increased and officials said it was too soon to talk about easing the lockdown. Britain reported 596 deaths from COVID-19 in hospitals in its daily update on Sunday, raising the country’s total to more than 16,000. The major traded 0.2 percent down at 1.2413, having hit a low of 1.2388 earlier, it’s lowest since April 9. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2461, a break above could take it near 1.2502. On the downside, support is seen at 1.2369, a break below targets 1.2331. Against the euro, the pound was trading 0.05 percent down at 87.35 pence, having hit a high of 86.81 last week, it’s highest since Mar. 10.
AUD/USD: The Australian dollar declined, extending previous session losses, after data showed that 6 percent of all jobs in the country were lost in a brief period over March 14 to April 4 due to the virus. Moreover, Reserve Bank of Australia Governor Philip Lowe comments, citing that Australia will suffer its biggest economic contraction since the 1930s in the first half of 2020 due to coronavirus-driven mobility restrictions further dented the bid tone around the major. The Aussie trades 0.2 percent down at 0.6325, having hit a low of 0.6263 on Thursday, it’s lowest since Apr. 9. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6365, a break above could take it near 0.6385. On the downside, support is seen at 0.6262, a break below targets 0.6235.
Equities Recap
Asian shares declined as a historic plunge below zero in U.S. crude prices rattled investors and on signs of a slow and difficult recovery from the COVID-19 pandemic.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 2.0 percent.
Tokyo's Nikkei eased 1.9 percent to 19,280.78 points, Australia's S&P/ASX 200 index declined 2.5 percent to 5,221.30 points and South Korea's KOSPI dropped 0.9 percent to 1,879.60 points.
Shanghai composite index fell 0.9 percent to 2,827.73 points, while CSI 300 index traded 1.1 percent down at 3,810.37 points.
Hong Kong’s Hang Seng traded 1.9 percent lower at 23,851.93 points. Taiwan shares shed 2.8 percent to 10,288.42 points.
Commodities Recap
International benchmark Brent declined as demand for crude slumps amid the coronavirus pandemic, while U.S. oil prices recovered to trade in positive territory after plunging below $0 for the first time ever. International benchmark Brent crude was trading 2.8 percent lower at $25.30 per barrel by 0545 GMT, having hit a low of $25.22 earlier, its lowest since April 1. U.S. West Texas Intermediate was trading up at $21.34 a barrel, after historic slide.
Gold prices declined, having risen as much as 1 percent in the previous session as the dollar firmed, although a fragile equities market limited losses. Spot gold eased 0.4 percent to $1,689.18 per ounce by 0551 GMT, having touched a low of $1,671.21 on Monday, its lowest since Apr. 9. U.S. gold futures fell 0.4 percent to $1,704.60.
Treasuries Recap
The super-long Japanese government bond prices gained, with the 30-year JGB yield falling 1.5 basis points to 0.465 percent. The 20-year JGB yield fell 1 bp to 0.345 percent. The 10-year JGB yield was flat at 0.010 percent, while benchmark 10-year JGB futures prices fell 0.08 point to 152.10. The two-year JGB yield was flat at minus 0.140 percent, while the five-year yield was flat at minus 0.100 percent.
