Market Roundup
- Oil firms on U.S. stimulus hopes
- Gold slips as dollar rebounds
Economic Data Ahead
- (0500 ET/0900 GMT) EZ ZEW Survey – Economic Sentiment(Aug)
- (0500 ET/0900 GMT) Germany ZEW Survey – Current Situation(Aug)
- (0500 ET/0900 GMT) Germany ZEW Survey – Economic Sentiment(Aug)
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index held firm near a 1-week peak, as investors kept an eye on the rapidly deteriorating relationship between Washington and Beijing. China imposed sanctions on 11 U.S. citizens, including Republican lawmakers, following Washington’s sanctions on Hong Kong and Chinese officials. The greenback against a basket of currencies traded 0.05 percent up at 93.51, having touched a high of 93.72 earlier, its highest since August 4.
EUR/USD: The euro steadied after tumbling to a 1-week low earlier in the session, as investor morale in the euro zone rose for a fourth consecutive month in August but the low reading suggests that the coronavirus-hit economy is still in recession in the third quarter. The European currency traded 0.1 percent higher at 1.1751, having touched a high of 1.1916 on Thursday, its highest since May 2018. Investors’ attention will remain on a series of data from Eurozone economies and EZ Survey- Economic Sentiment, ahead of the U.S. producer price index. Immediate resistance is located at 1.1795 (10-DMA), a break above targets 1.1812. On the downside, support is seen at 1.1698, a break below could drag it below 1.1660.
USD/JPY: The dollar rallied to a 1-week peak as U.S. congressional leaders and Trump administration officials said they were ready to resume negotiations on a coronavirus aid deal. The major was trading 0.2 percent up at 106.12, having hit a high of 106.17 earlier, its highest since August 4. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. producer price index. Immediate resistance is located at 106.33, a break above targets 106.56. On the downside, support is seen at 105.75 (5-DMA), a break below could take it near at 105.52 (5-DMA).
GBP/USD: Sterling surged, extending previous session gains, ahead of UK unemployment later in the day. Britain’s finance minister Rishi Sunak said on Friday that extending a furlough scheme which is due to expire at the end of October would leave some workers trapped in the false hope that they could return to their jobs after the pandemic. The major traded 0.1 percent higher at 1.3080, having hit a high of 1.3185 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 1.3110, a break above could take it near 1.3147. On the downside, support is seen at 1.3004, a break below targets 1.2977. Against the euro, the pound was trading 0.1 percent lower at 89.84 pence, having hit a high of 89.69 earlier, it’s highest since July 13.
AUD/USD: The Australian dollar rose, halting a 2-day losing streak, as the U.S. dollar seemed stuck in a long-term downtrend. The Aussie trades 0.2 percent higher at 0.7164, having hit a high of 0.7243 on Friday, it’s highest since Feb. 6. 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 0.7241. On the downside, support is seen at 0.7123, a break below targets 0.7105 (21-DMA).
Equities Recap
Asian shares rallied on relief that the latest flare-up in tensions between U.S. and China appears not to have spilled over into trade.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose nearly 1 percent.
Tokyo's Nikkei declined 1.9 percent to 22,750.24 points, Australia's S&P/ASX 200 index rallied 0.5 percent to 6,138.70 points. South Korea's KOSPI gained 1.5 percent to 2,421.92 points.
Shanghai composite index eased 0.6 percent to 3,357.72 points, while CSI 300 index traded 0.5 percent down at 4,699.31 points.
Hong Kong’s Hang Seng traded 1.7 percent lower at 24,780.52 points. Taiwan shares shed 0.7 percent to 12,780.19 points.
Commodities Recap
Crude oil prices surged, extending previous session gains, underpinned by expectations of U.S. stimulus and a rebound in Asian demand as economies reopened. International benchmark Brent crude was trading 0.6 percent up at $44.33 per barrel by 0532 GMT, having hit a high of $46.21 on Wednesday, its highest since March 6. U.S. West Texas Intermediate was trading 0.7 percent higher at $42.24 a barrel, after rising as high as $43.50 on Wednesday, its highest since March 6.
Gold prices declined to a near 1-week earlier in the session as the dollar firmed after Beijing imposed sanctions on U.S. officials in the latest flare-up in tensions between Washington and Beijing, with investors also keeping a close watch on negotiations over a U.S. stimulus plan. Spot gold was trading 0.9 percent lower to $2,008.95 per ounce by 0542 GMT, drifting further away from a record high of $2,075.28 hit last week. U.S. gold futures fell 0.6 percent to $2,028.10.
Treasuries Recap
The U.S. Treasury yields edged lower, with the benchmark 10-year note yield trading at 0.580 percent.
