Market Roundup
- Oil rises as hurricane shuts U.S. output
- Gold off 2-week high as dollar steadies
Economic Data Ahead
- (0500 ET/0900 GMT) EZ Trade Balance n.s.a.(Jul)
- (0500 ET/0900 GMT) EZ Trade Balance s.a.(Jul)
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index traded within thin ranges as investors remained cautious ahead of a U.S. Federal Reserve policy decision due later in the day. The U.S. central bank is due to announce its decision at 1800 GMT, followed by a news conference from Chairman Jerome Powell half an hour later. The greenback against a basket of currencies traded flat at 93.08, having touched a low of 92.79 on Tuesday, its lowest since September 10.
EUR/USD: The euro consolidated within narrow ranges, as investors refrained from taking big positions ahead of a U.S. Federal Reserve policy decision. On Tuesday, the major rose to a near 1-week peak after the ZEW economic sentiment survey showed investor sentiment in Germany surged in September, but closed lower amid headwinds from Brexit and rising coronavirus infections. The European currency traded flat at 1.1848, having touched a high of 1.1900 the day before, its highest since September 10. Investors’ attention will remain on a series of data from the Eurozone economies and EZ trade balance, ahead of the U.S. retail sales, business inventories, NAHB Housing Market Index, FOMC Economic Projections, Fed interest rate decision and monetary policy statement and FOMC Press conference. Immediate resistance is located at 1.1874, a break above targets 1.1902. On the downside, support is seen at 1.1810, a break below could drag it below 1.1780.
USD/JPY: The dollar plunged to a near 3-week low on uncertainty regarding the Federal Reserve’s outlook on the economy. The Fed ends a two-day meeting later in the day and markets expect the U.S. central bank to affirm its current zero-interest-rate policy over the next three years. Investors also await the Bank of Japan policy decisions on Thursday, where it is expected to keep monetary policy steady but likely to offer a brighter view on the economy, output and exports than in July. The major was trading 0.2 percent lower at 105.27, having hit a low of 105.25 earlier, its lowest since August 28. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. retail sales, business inventories, NAHB Housing Market Index, FOMC Economic Projections, Fed interest rate decision and monetary policy statement and FOMC Press conference. Immediate resistance is located at 105.54, a break above targets 105.73. On the downside, support is seen at 105.00, a break below could take it near at 104.77.
GBP/USD: Sterling surged, extending gains for the third straight session, after a European Union draft document showed the EU is set to give London an 18-month lifeline to continue clearing euro derivatives after Britain’s unfettered access to the bloc ends in January. The major traded 0.1 percent up at 1.2898, having hit a low of 1.2762 on Friday, it’s lowest since July 24. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2980, a break above could take it near 1.3035. On the downside, support is seen at 1.2846, a break below targets 1.2814. Against the euro, the pound was trading 0.05 percent up at 91.86 pence, having hit a high of 91.72 earlier, it’s highest since September 10.
AUD/USD: The Australian dollar rallied, hovering towards a 2-week peak after the minutes from the central bank’s September monetary policy meeting stopped short of signalling a further cut to the cash rate. The minutes showed the Reserve Bank of Australia will maintain its highly accommodative settings as long as required, however, it did not indicate a policy action was imminent. The Aussie trades 0.3 percent up at 0.7318, having hit a high of 0.7342 on Tuesday, it’s highest since September 2. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7340, a break above could take it near 0.7366. On the downside, support is seen at 0.7262 (21-DMA), a break below targets 0.7246.
NZD/USD: The New Zealand dollar extended gains above the 0.6700 handle on news the government would lift coronavirus restrictions across the country on Sept. 21. Moreover, investors continued to digest China's better-than-expected economic data that reinforced investors' perception the Chinese economy is leading the global recovery from the COVID-19 pandemic. The Kiwi traded 0.2 percent higher at 0.6725, having touched a high of 0.6736 on Tuesday, its highest level since September 3. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6750, a break above could take it near 0.6779. On the downside, support is seen at 0.6682 (5-DMA), a break below could drag it below 0.6652 (21-DMA).
Equities Recap
Asian shares gained, supported by upbeat Chinese and U.S. economic data, while investors awaited the Federal Reserve’s view on the economy at its policy meeting.
MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.5 percent.
Tokyo's Nikkei surged 0.1 percent to 23,477.21 points, Australia's S&P/ASX 200 index rallied 0.9 percent to 5,949.30 points. South Korea's KOSPI eased 0.3 percent to 2,437.02 points.
Shanghai composite index declined 0.4 percent to 3,281.92 points, while CSI 300 index traded 0.7 percent down at 4,654.50 points.
Hong Kong’s Hang Seng traded 0.2 percent lower at 24,687.04 points. Taiwan shares added 1.01 percent to 12,976.76 points.
Commodities Recap
Crude oil prices rose to a 1-week peak as a hurricane disrupted U.S. offshore oil and gas production and an industry report showed a big decline in U.S. crude stockpiles. International benchmark Brent crude was trading 1.2 percent up at $41.11 per barrel by 0448 GMT, having hit a high of $41.22 earlier, its highest since September 9. U.S. West Texas Intermediate was trading 1.4 percent higher at $38.94 a barrel, after rising as high as $39.03 earlier, its highest since September 8.
Gold prices rose, hovering towards a near 2-week high hit in the previous session, as the dollar gained ahead of a U.S. Federal Reserve policy decision due later in the day. Spot gold was trading 0.3 percent up at $1,959.69 per ounce by 0452 GMT, having hit a high of $1972.22 on Tuesday, its highest since September 2. U.S. gold futures gained 0.1 percent to $1,967.90.
Treasuries Recap
The U.S. Treasury yields declined, with the benchmark 10-year note yield trading at 0.674 percent.
The Australian government bond futures were little changed, with the 3-year bond contract at 99.710 and the 10-year contract at 99.078.
The New Zealand government bonds were slightly weaker with yields up about 1 basis point at the long end of the curve.
