Market Roundup
- Oil prices slip after OPEC+ agree to ease oil supply curbs
- Gold holds steady on virus concerns
Economic Data Ahead
- (0500 ET/0900 GMT) EZ Trade Balance n.s.a.(May)
- (0500 ET/0900 GMT) EZ Trade Balance s.a.(May)
Key Events Ahead
- (0745 ET/1145 GMT) ECB Interest Rate Decision
- (0745 ET/1145 GMT) ECB Deposit Rate Decision
FX Beat
DXY: The dollar index rebounded from a 1-month low as surging U.S. virus cases, simmering Sino-U.S. tensions and weak Chinese consumption data dented investor optimism over global economic recovery from the coronavirus crisis. The greenback against a basket of currencies traded 0.1 percent higher at 96.14, having touched a low of 95.78 on Wednesday, its lowest since June 10.
EUR/USD: The euro rallied to a 4-month peak as investors await the European Central Bank decision, followed by ECB President Christine Lagarde’s press conference. The ECB is all but certain to keep policy on hold today, which would keep pressure on political leaders to agree on a recovery plan at a Friday-Saturday conference in Brussels. The European currency traded 0.1 percent down at 1.1396, having touched a high of 1.1452 on Wednesday, its highest since March 10. Investors’ attention will remain on a series of data from Eurozone economies and EZ trade balance and ECB policy decision, ahead of the U.S. retail sales, unemployment claims, business inventories, housing market index and Philadelphia Fed manufacturing survey. Immediate resistance is located at 1.1460, a break above targets 1.1501. On the downside, support is seen at 1.1347 (5-DMA), a break below could drag it below 1.1313 (10-DMA).
USD/JPY: The dollar steadied, halting a 2-day losing streak, after data showed China’s economy grew 3.2 percent in the second quarter from a year earlier, recovering from a record contraction as lockdown measures ended and policymakers stepped up stimulus to combat the impact from the coronavirus crisis. The major was trading 0.05 percent up at 106.94, having hit a high of 107.43 on Tuesday, its highest since July 8. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. retail sales, unemployment claims, business inventories, housing market index and Philadelphia Fed manufacturing survey. Immediate resistance is located at 107.56, a break above targets 107.90. On the downside, support is seen at 106.63, a break below could take it near at 106.48.
GBP/USD: Sterling declined as investors question whether the already announced fiscal stimulus measures will be enough to boost the economy, expecting the Bank of England to increase its quantitative easing program and lower interest rates further. The major traded 0.3 percent lower at 1.2543, having hit a low of 1.2479 on Tuesday, it’s lowest since July 7. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2623, a break above could take it near 1.2670. On the downside, support is seen at 1.2508, a break below targets 1.2483 (21-DMA). Against the euro, the pound was trading 0.3 percent down at 90.90 pence, having hit a low of 91.12 on Tuesday, it’s lowest since June 30.
AUD/USD: The Australian dollar eased from an over 1-month peak after Chinese data showed an unexpected drop in retail sales for a fifth straight month. China's retail sales fell 1.8 percent on-year, much worse than a predicted 0.3 percent growth, after a 2.8 percent drop in May. The major trades 0.2 percent down at 0.6993, having hit a high of 0.7037 on Wednesday, it’s highest since June 10. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7042, a break above could take it near 0.7064. On the downside, support is seen at 0.6959 (10-DMA) a break below targets 0.6918 (21-DMA).
Equities Recap
Asian shares plunged, weighed down by concern about deteriorating U.S.-China relations and the economic cost of a resurgence in coronavirus infections.
MSCI's broadest index of Asia-Pacific shares outside Japan slumped 0.9 percent.
Tokyo's Nikkei declined 0.7 percent to 22,770.36 points, Australia's S&P/ASX 200 index fell 0.7 percent to 6,010.90 points. South Korea's KOSPI dropped 0.8 percent to 2,183.76 points.
Shanghai composite index eased 4.5 percent to 3,210.10 points, while CSI 300 index traded 4.8 percent down at 4,516.25 points.
Hong Kong’s Hang Seng traded 1.9 percent lower at 25,010.21 points. Taiwan shares shed 0.4 percent to 12,157.74 points.
Commodities Recap
Crude oil prices declined after OPEC and allies such as Russia agreed to ease record supply curbs from August, although hopes for a swift U.S. demand pick-up after a bigger-than-expected drawdown from the U.S. crude stocks limited downside. International benchmark Brent crude was trading 0.4 percent up at $43.48 per barrel by 0553 GMT, having hit a high of $43.82 on Wednesday, its highest since June 23. U.S. West Texas Intermediate was trading 0.4 percent lower at $40.83 a barrel, after rising as high as $41.24 on Wednesday, its highest since June 23.
Gold prices eased but held firm near a 9-year peak, as concerns over rising coronavirus cases and simmering U.S.-China tensions offset upbeat Chinese economic data. Spot gold declined 0.1 percent lower at $1,808.81 per ounce by 0557 GMT, having hit a high of $1,818.09 last week, its highest since September 2011. U.S. gold futures were mostly unchanged at $1,814.20.
Treasuries Recap
Japanese government bond prices were steady to slightly firmer, with the benchmark 10-year JGB futures adding 0.22 point to 152.37, while the 10-year JGB yield fell 1 basis point to 0.010 percent. In the super-long zone, the 20-year JGB yield fell 1 basis point to 0.420 percent, while the 30-year JGB yield inched down half a basis point to 0.600 percent. The 40-year JGB yield stood unchanged at 0.645 percent. At the shorter end of the curve, the two-year JGB yield inched down half a basis point to minus 0.150 percent, while the five-year yield dropped 1.5 basis points to minus 0.125 percent.
