Market Roundup
- Oil prices rise on demand prospects
- Gold slips on easing lockdown measures
Economic Data Ahead
- (0500 ET/0900 GMT) EZ Producer Price Index (YoY)(Mar)
- (0500 ET/0900 GMT) EZ Producer Price Index (MoM)(Mar)
Key Events Ahead
- (0440 ET/0840 GMT) ECB's Mersch speech
FX Beat
DXY: The dollar index eased as traders weighed optimism about a coronavirus recovery in China against fears about rising Sino-U.S. tensions. The greenback against a basket of currencies traded 0.05 percent down at 99.45, having touched a low of 98.57 on Monday, its lowest since Mar. 30.
EUR/USD: The euro consolidated within narrow ranges, as investors worried that easing lockdowns would not mean a quick economic recovery. Data released on Monday showed investor morale in the eurozone improved marginally in May but the assessment of current conditions hit an all-time low as the bloc faced unprecedented challenges posed by the coronavirus crisis. The European currency traded flat at 1.0905, having touched a high of 1.1019 on Friday, its highest since April 1. Investors’ attention will remain on a series of economic data from the Eurozone economies, EZ producer price index and ECB Mersch speech, ahead of the U.S. trade balance, service PMI from both Markit and ISM. Immediate resistance is located at 1.0952, a break above targets 1.1020. On the downside, support is seen at 1.0875 (21-DMA), a break below could drag it below 1.0863 (10-DMA).
USD/JPY: The dollar declined as investor risk sentiment weakened after U.S. President Donald Trump stepped up verbal attacks on China ahead of a Nov. 3 election where both he and Democratic contender Joe Biden are jostling to project a tough stance against the United States’ main strategic rival. The major was trading 0.1 percent down at 106.60, having hit a low of 106.35 on Wednesday, its lowest since Mar. 17. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. trade balance, service PMI from both Markit and ISM. Immediate resistance is located at 107.08, a break above targets 107.28. On the downside, support is seen at 106.35, a break below could take it near at 105.96.
GBP/USD: Sterling rose, halting a 2-day losing streak, as the greenback eased after rising nearly 1-percent in the prior session. The major traded 0.1 percent up at 1.2455, having hit a high of 1.2643 on Thursday, it’s highest since April 14. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2488, a break above could take it near 1.2518. On the downside, support is seen at 1.2416 (10-DMA), a break below targets 1.2389. Against the euro, the pound was trading 0.1 percent up at 87.52 pence, having hit a low of 88.14 on Monday, it’s lowest since April 22.
AUD/USD: The Australian dollar surged after the Reserve Bank of Australia left its targets for the cash rate and 3-year government bond yields unchanged at 0.25 percent, but forecast the economy would suffer its largest-ever contraction in the first half of the year. RBA Governor Philip Lowe stated a delay or reimposition of restrictions to contain the pandemic could make economic outcomes more challenging. The Aussie trades 0.4 percent up at 0.6448, having hit a low of 0.6372 on Monday, it’s lowest since Apr. 24. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6478 (5-DMA), a break above could take it near 0.6512. On the downside, support is seen at 0.6377, a break below targets 0.6359 (21-DMA).
Equities Recap
Asian shares surged, tracking a late Wall Street rally as governments eased coronavirus lockdowns.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.8 percent.
Australia's S&P/ASX 200 index rallied 1.6 percent to 5,407.10 points. Hong Kong’s Hang Seng traded 0.9 percent higher at 23,847.98 points. Taiwan shares added 0.5 percent to 10,774.61 points.
Commodities Recap
Crude oil prices surged, extending previous session gains on expectations that fuel demand will begin to pick up as some U.S. states and nations in Europe and Asia start to ease coronavirus lockdown measures. International benchmark Brent crude was trading 1.9 percent higher at $28.44 per barrel by 0547 GMT, having hit a high of $28.55 earlier, its highest since April 17. U.S. West Texas Intermediate was trading 2.8 percent up at $24.17 a barrel, after rising as high as $24.23 earlier in the session, its highest since April 14.
Gold prices declined as risk sentiment was lifted by easing coronavirus restrictions, while rising tensions between the United States and China over the outbreak limited downside. Spot gold eased 0.1 percent to $1,701.05 per ounce by 0556 GMT, having touched a low of $1,670.90 on Friday, its lowest since Apr. 21. U.S. gold futures were down 0.5 percent to $1,705.50 per ounce.
Treasuries Recap
On Monday, the benchmark 10-year note yields were last 0.64 percent, unchanged from Friday.
