Market Roundup
- Gold eases on profit-taking
- Oil declines on concerns about demand recovery
Economic Data Ahead
- (0400 ET/0800 GMT) Italy Industrial Output s.a. (MoM)(Apr)
- (0400 ET/0800 GMT) Italy Industrial Output w.d.a (YoY)(Apr)
Key Events Ahead
- (0300 ET/0700 GMT) EU EcoFin Meeting
FX Beat
DXY: The dollar index steadied after tumbling to a 3-month low in the prior session on Fed policymakers' projections the U.S. economy to shrink 6.5 percent this year and the unemployment rate to be 9.3 percent at year’s end. The greenback against a basket of currencies traded 0.2 percent up at 96.30, having touched a low of 95.72 earlier, its lowest since March 10.
EUR/USD: The euro declined from a 3-month peak as the greenback rebounded from recent lows against a basket of currencies. The European currency traded 0.3 percent down at 1.1336, having touched a high of 1.1422 on Wednesday, its highest since March 10. Investors’ attention will remain on a series of data from Eurozone economies and EU EcoFin Meeting, ahead of U.S. producer price index, and unemployment benefit claims. Immediate resistance is located at 1.1415, a break above targets 1.1440. On the downside, support is seen at 1.1298, a break below could drag it below 1.1264.
USD/JPY: The dollar rebounded from a near 4-week low after the U.S. Federal Reserve made no policy changes in the first economic projections of the pandemic era. On Wednesday, the Fed signalled it plans years of extraordinary support for the U.S. economy facing a pandemic-induced recession. The major was trading 0.05 percent up at 107.15, having hit a low of 106.89 earlier, its lowest since May 15. Investors’ will continue to track the broad-based market sentiment, ahead of U.S. producer price index, and unemployment benefit claims. Immediate resistance is located at 107.36, a break above targets 107.76. On the downside, support is seen at 106.74, a break below could take it near at 106.40.
GBP/USD: Sterling declined, halting a 10-day losing streak, as Brexit uncertainty, the prospect of negative interest rates and Britain’s large coronavirus death toll weighed on the currency. The major traded 0.5 percent down at 1.2678, having hit a high of 1.2813 on Wednesday, it’s highest since March 12. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2820, a break above could take it near 1.2848. On the downside, support is seen at 1.2628, a break below targets 1.2573 (10-DMA). Against the euro, the pound was trading 0.4 percent down at 89.54 pence, having hit a high of 88.64 on Tuesday, it’s highest since June 2.
AUD/USD: The Australian dollar eased after rising to a near 1-year peak in the prior session, as investors took profit on a rally that has carried the Aussie 3.8 percent higher in June. The major trades 1.0 percent down at 0.6929, having hit a high of 0.7064 on Wednesday, it’s highest since July 19, 2019. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7030, a break above could take it near 0.7075. On the downside, support is seen at 0.6880, a break below targets 0.6842.
Equities Recap
Asian shares tumbled after a downbeat economic outlook from the U.S. Federal Reserve stoked speculation it would have to add to already historic levels of stimulus to safeguard recovery.
MSCI's broadest index of Asia-Pacific shares outside Japan tumbled 0.3 percent.
Tokyo's Nikkei fell 2.8 percent to 22,472.91 points, Australia's S&P/ASX 200 index declined 3.05 percent to 5,960.60 points. South Korea's KOSPI slumped 1.5 percent to 2,163.92 points.
Shanghai composite index eased 0.8 percent to 2,920.61 points, while CSI 300 index traded 1.1 percent down at 3,994.59 points.
Hong Kong’s Hang Seng traded 1.7 percent lower at 24,642.90 points. Taiwan shares shed 1.6 percent to 11,535.77 points.
Commodities Recap
Crude oil prices declined by more than 2 percent on worries about slow demand growth with coronavirus cases rising and U.S. crude stockpiles hitting an all-time high. International benchmark Brent crude was trading 2.05 percent lower at $40.36 per barrel by 0514 GMT, having hit a high of $43.29 on Monday, its highest since March 9. U.S. West Texas Intermediate was trading 2.3 percent down at $38.09 a barrel, after rising as high as $40.42 on Monday, its highest since March 9.
Gold prices plunged as investors booked profits after prices rose to a more than a 1-week high on bleak economic projections from the U.S. Federal Reserve. Spot gold was trading 0.5 percent down to $1,729.59 per ounce by 0519 GMT, having touched a high of $1,740.06 earlier, its highest since June 2. U.S. gold futures climbed 1.2 percent to $1,741.80.
Treasuries Recap
On Wednesday, the benchmark 10-year Treasury yields fell 9 basis points to 0.744 percent, while 2-year yields fell 3 basis points to 0.177 percent. The yield curve between 2-year and 10-year notes flattened to 57 basis points. The curve between 5-year notes and 30-year bonds was last at 118 basis points.
