Market Roundup
- Oil rises on signs of firmer demand
- Gold gains on bleak economic outlook
Economic Data Ahead
- (0500 ET/0900 GMT) EZ Consumer Price Index (MoM)(Apr)
- (0500 ET/0900 GMT) EZ Consumer Price Index - Core (YoY)(Apr)
- (0500 ET/0900 GMT) EZ Consumer Price Index - Core (MoM)(Apr)
- (0500 ET/0900 GMT) EZ Consumer Price Index (YoY)(Apr)
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index declined after data showed U.S. homebuilding dropped by the most on record in April, lifting fears the pandemic would lead to the deepest economic contraction in the second quarter since the Great Depression. Investors now await the Federal Open Market Committee’s April 28-29 policy meeting minutes due at 1800 GMT. The greenback against a basket of currencies traded 0.2 percent down at 99.42, having touched a high of 100.56 on Thursday, its highest since April 24.
EUR/USD: The euro rose, hovering towards a near 3-week peak, on the aftermath of a Franco-German proposal for a common fund that could move Europe closer to fiscal union. The European currency traded 0.2 percent up at 1.0940, having touched a high of 1.0976 on Tuesday, its highest since May 1. Investors’ attention will remain on a series of data from Eurozone economies, EZ current account and consumer price index, ahead of the FOMC minutes. Immediate resistance is located at 1.0964, a break above targets 1.0987. On the downside, support is seen at 1.0902, a break below could drag it below 1.0871.
USD/JPY: The dollar rallied, drifting closer to an over 1-month peak after Federal Reserve Chair Jerome Powell in his testimony before the U.S. Senate Banking Committee stated that the Fed was looking at extending access to the credit facilities to additional borrowers, including states with smaller populations. The major was trading 0.1 percent up at 107.74, having hit a high of 108.08 on Tuesday, its highest since Apr. 13. Investors’ will continue to track the broad-based market sentiment, ahead of the FOMC minutes. Immediate resistance is located at 108.04, a break above targets 108.30. On the downside, support is seen at 107.26 (5-DMA), a break below could take it near at 107.07 (21-DMA).
GBP/USD: Sterling eased, halting a 2-day rally after data showed Britain’s inflation rate declined in April to its lowest since August 2016 as the coronavirus pandemic pushed down global oil prices and clothing retailers cut price. The economy's consumer price index dropped to an annual rate of 0.8 percent in April from 1.5 percent in March, while consumer prices fell by 0.2 percent in April alone. The major traded 0.1 percent down at 1.2232, having hit a low of 1.2075 on Monday, it’s lowest since Mar. 26. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2305, a break above could take it near 1.2345 (21-DMA). On the downside, support is seen at 1.2198 (5-DMA), a break below targets 1.2165. Against the euro, the pound was trading 0.4 percent down at 89.49 pence, having hit a low of 89.60 on Monday, it’s lowest since March 31.
AUD/USD: The Australian dollar surged, extending gains for the third straight session, amid progress on reopening the global economy and vaccine optimism. The Aussie trades 0.2 percent up at 0.6544, having hit a high of 0.6584 earlier, it’s lowest since March 10. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6690, a break above could take it near 0.6612. On the downside, support is seen at 0.6491, a break below targets 0.6477.
Equities Recap
Asian shares consolidated as a sceptical press report dented some hopes for a COVID-19 vaccine and increased concerns about the global recovery from the pandemic.
MSCI's broadest index of Asia-Pacific shares outside Japan was flat.
Tokyo's Nikkei rallied 0.8 percent to 20,595.15 points, Australia's S&P/ASX 200 index gained 0.2 percent to 5,573.00 points. South Korea's KOSPI surged 0.5 percent to 1,989.64 points.
Shanghai composite index eased 0.5 percent to 2,883.74 points, while CSI 300 index traded 0.5 percent down at 3,935.22 points.
Hong Kong’s Hang Seng traded 0.1 percent lower at 24,363.09 points. Taiwan shares added 0.4 percent to 10,907.80 points.
Commodities Recap
Crude oil prices surged amid signs of improving demand and a drawdown in U.S. crude inventories although worries over the economic fallout from the coronavirus pandemic limited upside. International benchmark Brent crude was trading 1.05 percent higher at $34.84 per barrel by 0553 GMT, having hit a high of $35.73 on Tuesday, its highest since April 9. U.S. West Texas Intermediate was trading 0.5 percent up at $32.00 a barrel, after rising as high as $33.06 on Monday, its highest since March 16.
Gold prices gained as bleak data from major economies reflected the fallout from the coronavirus crisis, while optimism over a potential COVID-19 vaccine faded and boosted safe-haven demand. Spot gold was trading 0.2 percent up at $1,748.10 per ounce by 0558 GMT, having touched a high of $1,765.25 on Monday, its highest since Oct. 12, 2012. U.S. gold futures rose 0.4 percent to $1,753.30.
Treasuries Recap
The benchmark 10-year JGB futures barely moved at 152.27 and the 10-year JGB yield was flat at minus 0.005 percent. The 20-year JGB yield fell 1.5 basis points to 0.330 percent. The 30-year JGB yield was down 2 basis points to 0.455 percent. At the short end of the market, the two-year JGB yield and the five-year yield stood flat at minus 0.165 percent and minus 0.125 percent, respectively.
