Market Roundup
- Oil prices slip on demand fears
- Gold eases on U.S. data and vaccine hopes
Economic Data Ahead
- (0500 ET/0900 GMT) EZ Producer Price Index (YoY)(May)
- (0500 ET/0900 GMT) EZ Producer Price Index (MoM)(May)
- (0500 ET/0900 GMT) EZ Unemployment Rate(May)
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index declined to a 1-week low, amid the resurgence of COVID-19 cases and the potential for renewed lockdowns in U.S. states deemed hot spots. The greenback against a basket of currencies traded 0.1 percent lower at 97.04, having touched a low of 97.01 earlier, its lowest since June 24.
EUR/USD: The euro rose, extending previous session gains, as transmission rates of the coronavirus fell in much of Europe, while IHS Markit’s final eurozone Manufacturing Purchasing Managers’ Index moved closer to the 50-mark separating growth from contraction in June. The European currency traded 0.2 percent up at 1.1269, having touched a high of 1.1348 last week, its highest since June 16. Investors’ attention will remain on a series of data from Eurozone economies, and EZ producer price index, ahead of U.S. non-farm payroll, trade balance, unemployment benefit claims, factory orders and unemployment rate. Immediate resistance is located at 1.1293, a break above targets 1.1332. On the downside, support is seen at 1.1231 (5-DMA), a break below could drag it below 1.1207.
USD/JPY: The dollar declined, drifting further away from a 3-week peak hit in the previous session, as concerns grew about whether the U.S. economy can sustain its recovery as coronavirus infections surged and some states reimposed limits on business and personal activity. The major was trading 0.05 percent down at 107.45, having hit a high of 108.16 on Wednesday, its highest since June 9. Investors’ will continue to track the broad-based market sentiment, ahead of U.S. non-farm payroll, trade balance, unemployment benefit claims, factory orders and unemployment rate. Immediate resistance is located at 107.94, a break above targets 108.20. On the downside, support is seen at 107.16 (10-DMA), a break below could take it near at 106.73.
GBP/USD: Sterling rallied to a 1-week peak as British manufacturing survey data pointed to a small increase in output after the historic collapse caused by the coronavirus. However, concerns that Britain will fail to secure a trade agreement with the European Union at end-2020 continued to weigh on the British pound. The major traded 0.2 percent up at 1.2502, having hit a low of 1.2251 on Monday, it’s lowest since May 28. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2542, a break above could take it near 1.2588. On the downside, support is seen at 1.2409 (10-DMA), a break below targets 1.2359. Against the euro, the pound was trading 0.05 percent up at 90.12 pence, having hit a high of 90.10 earlier, it’s highest since June 25.
AUDUS: The Australia dollar surged, extending gains for the fourth straight session, as analysts upgraded forecasts for the Aussie in the latest Reuters poll, as investors wagered heavily on global economic reopening. The major trades 0.2 percent up at 0.6926, having hit a high of 0.6914 on Wednesday, it’s highest since June 24. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6960, a break above could take it near 0.7004. On the downside, support is seen at 0.6881 (10-DMA) a break below targets 0.6840.
Equities Recap
Asian shares rallied to a near 4-month high on hopes of a vaccine for COVID-19, which has killed more than half a million people globally and shut down the world economy.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.5 percent.
Tokyo's Nikkei surged 0.1 percent to 22,145.96 points, Australia's S&P/ASX 200 index gained 1.7 percent to 6,032.70 points. South Korea's KOSPI jumped 1.4 percent to 2,135.37 points.
Shanghai composite index rose 2.1 percent to 3,089.89 points, while CSI 300 index traded 2.1 percent up at 4,336.29 points.
Hong Kong’s Hang Seng traded 2.2 percent higher at 24,968.15 points. Taiwan shares added 0.9 percent to 11,805.14 points.
Commodities Recap
Crude oil prices declined after the United States recorded its biggest one-day spike in coronavirus cases, stoking worries a resurgence in COVID-19 cases will stall a recovery in fuel demand. International benchmark Brent crude was trading 0.3 percent up at $42.05 per barrel by 0532 GMT, having hit a high of $42.59 on Wednesday, its highest since June 24. U.S. West Texas Intermediate was trading 0.05 percent lower at $39.49 a barrel, after rising as high as $40.56 on Wednesday, its highest since June 23.
Gold prices tumbled, easing from a near 8-year peak hit in the previous session, as robust U.S. manufacturing data and promising results from a COVID-19 vaccine trial revived hopes for a quick economic recovery. Spot gold eased 0.2 percent to $1,766.18 per ounce by 0548 GMT, having touched a high of $1,789.26 on Wednesday, its highest since October 2012. U.S. gold futures fell 0.2 percent to $1,776.80.
Treasuries Recap
The U.S. Treasury yields edged down, with the benchmark 10-year note yield trading at 0.675 percent.
