Market Roundup
- Oil prices declines on looser supply curbs
- Gold steadies near $1,800 on virus fears, U.S.-China tensions
Economic Data Ahead
- (0500 ET/0900 GMT) EZ Consumer Price Index (MoM)(Jun)
- (0500 ET/0900 GMT) EZ Consumer Price Index - Core (YoY)(Jun)
- (0500 ET/0900 GMT) EZ Consumer Price Index - Core (MoM)(Jun)
- (0500 ET/0900 GMT) EZ Construction Output w.d.a (YoY)(May)
- (0500 ET/0900 GMT) EZ Consumer Price Index (YoY)(Jun)
- (0500 ET/0900 GMT) EZ Construction Output s.a (MoM)(May)
Key Events Ahead
- (0430 ET/0830 GMT) ECB's Schnabel speech
- (0430 ET/0830 GMT) ECB's De Guindos speech
FX Beat
DXY: The dollar index slightly eased as a rise in coronavirus infections forced California and other U.S. states to at least partially shut down again, raising fears the economy and labour market will continue to struggle. The greenback against a basket of currencies traded 0.05 percent lower at 96.26, having touched a low of 95.78 on Wednesday, its lowest since June 10.
EUR/USD: The euro consolidated within narrow ranges as investors remained cautious ahead of European Union leaders meeting in Brussels as they seek to overcome their differences over a proposed stimulus package. The European currency traded flat at 1.1381, 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, EZ consumer price index, construction output and ECB officials' speeches, ahead of the U.S. building permits, housing starts and Michigan consumer sentiment index. Immediate resistance is located at 1.1420, a break above targets 1.1460. On the downside, support is seen at 1.1351, a break below could drag it below 1.1327 (10-DMA).
USD/JPY: The dollar steadied as domestic retail sales data for June came in better than expected, though the move was limited by jobless claims. U.S. retail sales in June increased for the second consecutive month, while a separate report showed 1.3 million people filed for state unemployment benefits during the week ending July 11, slightly down from 1.31 million in the prior period. The major was trading flat at 107.20, 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. building permits, housing starts and Michigan consumer sentiment index. Immediate resistance is located at 107.56, a break above targets 107.90. On the downside, support is seen at 106.95, a break below could take it near at 106.63.
GBP/USD: Sterling held firm within ranges amid expectations the Bank of England will increase its quantitative easing program and lower interest rates further in order to support the economy. The major traded flat at 1.2550, 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 1.2520, a break below targets 1.2483 (21-DMA). Against the euro, the pound was trading flat at 90.69 pence, having hit a low of 91.12 on Tuesday, it’s lowest since June 30.
AUD/USD: The Australian dollar surged, reversing previous session losses, as the United States ratcheted up the pressure on China in a wide-ranging dispute over civil liberties, access to technology, and territorial claims. The major trades 0.3 percent up at 0.6988, 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 0.7023, a break above could take it near 0.7064. On the downside, support is seen at 0.6945 a break below targets 0.6923.
Equities Recap
Asian shares nudged higher as hopes of more government spending around the world outweighed concerns about rising coronavirus infections and worsening tensions between Washington and Beijing.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.4 percent.
Tokyo's Nikkei declined 0.3 percent to 22,696.42 points, Australia's S&P/ASX 200 index rose 0.4 percent to 6,033.60 points. South Korea's KOSPI gained 0.8 percent to 2,201.19 points.
Shanghai composite index rose 0.1 percent to 3,214.13 points, while CSI 300 index traded 0.6 percent up at 4,544.70 points.
Hong Kong’s Hang Seng traded 0.6 percent lower at 25,130.70 points. Taiwan shares added 0.2 percent to 12,181.56 points.
Commodities Recap
Crude oil prices eased amid growing uncertainty about global recovery in fuel demand as new COVID-19 cases surge in several countries, while major producers eased production curbs. International benchmark Brent crude was trading 0.2 percent down at $43.19 per barrel by 0545 GMT, having hit a high of $43.82 on Wednesday, its highest since June 23. U.S. West Texas Intermediate was trading 0.2 percent lower at $40.63 a barrel, after rising as high as $41.24 on Wednesday, its highest since June 23.
Gold prices steadied near the $1,800 level after a sharp decline in the previous session, as worries over surging coronavirus cases and U.S.-China tensions boosted the metal's safe-haven appeal. Spot gold was trading 0.1 percent higher at $1,799.69 per ounce by 0551 GMT, having hit a high of $1,818.09 last week, its highest since September 2011. U.S. gold futures trade flat at $1,799.85.
Treasuries Recap
The yields on Japanese government bonds fell, with the benchmark 10-year JGB futures added 0.07 point to 152.42. In the cash bond market, the 10-year JGB yield stood flat at 0.010 percent. In the super-long zone, the 20-year JGB yield and the 40-year JGB yield dipped 1.5 basis points each to 0.405 percent and 0.620 percent, respectively. The 30-year JGB yield fell 1 basis point to 0.585 percent. Yields remained unchanged at the shorter end of the market, with the two-year JGB yield and the five-year yield flat at minus 0.150 percent and minus 0.125 percent, respectively.
