|   Market Roundups


  |   Market Roundups


Asia Roundup: Aussie gains on upbeat economic data, dollar eases on recovery worries, Asian shares consolidate - Wednesday, August 5th, 2020

Market Roundup

  • Oil gains as crude inventories fall
  • Gold at record high on softer dollar, stimulus bets

Economic Data Ahead

  • (0400 ET/0800 GMT) EZ Markit Services PMI(Jul)           
  • (0400 ET/0800 GMT) EZ Markit PMI Composite(Jul)        
  • (0430 ET/0830 GMT) UK Markit Services PMI(Jul)    
  • (0500 ET/0900 GMT) EZ Retail Sales (YoY)(Jun)   
  • (0500 ET/0900 GMT) EZ Retail Sales (MoM)(Jun)

Key Events Ahead

  • No Significant Events Scheduled

FX Beat

DXY: The dollar index eased, weighed down by speculation that stalemate over fiscal policy in Washington could leave the Federal Reserve with more to do. The greenback against a basket of currencies traded 0.2 percent down at 93.10, having touched a low of 92.55 on Friday, its lowest since May 2018.

EUR/USD: The euro nudged higher, extending previous session gains, as investors continued to digest yesterday's upbeat data showing Eurozone producer prices rose in June on a monthly basis slightly more than expected, ending their falling trend started in February. The European currency traded 0.1 percent higher at 1.1810, having touched a high of 1.1909 on Friday, its highest since May 2018. Investors’ attention will remain on a series of data from Eurozone economies, EZ Markit services and retail sales, ahead of the U.S. ADP employment change, trade balance, service PMI from both Markit and ISM. Immediate resistance is located at 1.1848, a break above targets 1.1910. On the downside, support is seen at 1.1726 (10-DMA), a break below could drag it below 1.1698.

USD/JPY: The dollar declined as the latest coronavirus relief package stalled in Congress and U.S. yields fell on the prospect that further monetary easing might be needed to support the economy. White House negotiators vowed to work with congressional Democrats to try to reach a deal on coronavirus relief by the end of this week. The major was trading 0.05 percent down at 105.66, having hit a high of 106.47 on Monday, its highest since July 24. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. ADP employment change, trade balance, service PMI from both Markit and ISM. Immediate resistance is located at 106.10, a break above targets 106.48 (21-DMA). On the downside, support is seen at 105.30, a break below could take it near at 104.95.

GBP/USD: Sterling consolidated within narrow ranges below the 1.3100 handle, amid concerns of a second wave of virus infections and a central bank policy meeting later in the week. Last week, British Prime Minister Boris Johnson said he would postpone the next stage of lockdown easing for at least two weeks due to a rise in COVID-19 infection rates. Investors await the Bank of England’s policy meeting on Thursday where money markets are already pricing in the prospects of negative interest rates by early next year. The major traded flat at 1.3074, having hit a high of 1.3170 on Thursday, it’s highest since March 9. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3138, a break above could take it near 1.3170. On the downside, support is seen at 1.3004, a break below targets 1.2944. Against the euro, the pound was trading 0.1 percent down at 90.33 pence, having hit a high of 89.80 on Friday, it’s highest since July 13.

AUD/USD: The Australian dollar surged on data showing country's new home loans in June rose 6.2 percent compared with May, with the housing finance sector adding $17.4 billion in value. Meanwhile, Investment Lending for Homes rose 8.7 percent in June, compared to a 15.6 percent drop in the prior month. The Aussie trades 0.4 percent higher at 0.7186, having hit a low of 0.7076 on Monday, it’s lowest since July 24. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7197, a break above could take it near 0.7227. On the downside, support is seen at 0.7133, a break below targets 0.7105.

Equities Recap

Asian shares consolidated within ranges as investors remained concerned over the rising cost of the coronavirus pandemic.

MSCI's broadest index of Asia-Pacific shares outside Japan traded flat.

Tokyo's Nikkei fell 0.3 percent to 22,514.85 points, Australia's S&P/ASX 200 index declined 0.6 percent to 6,001.30 points. South Korea's KOSPI gained 1.4 percent to 2,311.86 points.

Shanghai composite index rose 0.2 percent to 3,378.23 points, while CSI 300 index traded 0.05 percent up at 4,777.42 points.

Hong Kong’s Hang Seng traded 0.4 percent higher at 25,036.19 points. Taiwan shares added 0.7 percent to 12,802.30 points.

Commodities Recap

Crude oil prices rose, extending gains for the fourth straight session, after data showed crude inventories were down by 8.6 million barrels in the week to Aug. 1 to 520 million barrels, compared with analysts’ expectations for a drop of 3 million barrels. International benchmark Brent crude was trading 0.2 percent up at $44.41 per barrel by 0551 GMT, having hit a high of $44.79 on Tuesday, its highest since July 21. U.S. West Texas Intermediate was trading 0.4 percent higher at $41.64 a barrel, after rising as high as $42.06 on Tuesday, its highest since July 23.

Gold prices surged to an all-time peak above the $2,000 mark on a weaker dollar and bets for more stimulus measures to revive a pandemic-ravaged economy. Spot gold was trading 0.1 percent higher at $2,021.53 per ounce by 0559 GMT, having hit a record high of $2,031.13 in early Asian trade. U.S. gold futures rose 0.9 percent to $2,039.40.

Treasuries Recap

The U.S. Treasury yields edged higher, with the benchmark 10-year note yield trading at 0.521 percent.

  • Market Data

Welcome to EconoTimes

Sign up for daily updates for the most important
stories unfolding in the global economy.