Market Roundup
- Oil gains after OPEC flags crackdown on non-compliant member states
- Gold firms on economic worries
Economic Data Ahead
- (0400 ET/0800 GMT) EZ Current Account n.s.a(Jul)
- (0400 ET/0800 GMT) EZ Current Account s.a(Jul)
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar slumped as a batch of weak U.S. data and overall uncertainty about the economic outlook, backed the Federal Reserve’s concern about the pace of recovery. The number of Americans filing new claims for unemployment benefits fell less than expected last week, suggesting the labour market recovery losing steam amid fading fiscal stimulus. The greenback against a basket of currencies traded 0.1 percent down at 92.85, having touched a high of 93.59 on Thursday, its highest since September 9.
EUR/USD: The euro consolidated within narrow ranges, as investors digested yesterday’s data showing Eurozone consumer prices fell in August, pulled down by a decline in energy prices, while core inflation that excludes such volatile elements decelerated sharply too. Inflation in the 19 countries sharing the euro fell 0.4 percent month-on-month in August for a -0.2 percent year-on-year decline. The European currency traded flat at 1.1851, having touched a low of 1.1737 on Thursday, its lowest since August 12. Investors’ attention will remain on a series of data from the Eurozone economies and EZ current account, ahead of Michigan consumer sentiment index. Immediate resistance is located at 1.1829 (21-DMA), a break above targets 1.1863. On the downside, support is seen at 1.1710, a break below could drag it below 1.1680.
USD/JPY: The dollar steadied after tumbling to a 1-1/2 month low in the prior session on downbeat U.S. economic data that cast a shadow over the economic outlook. U.S. jobless claims remained elevated at 860,000, while both housing starts and the Philadelphia Fed business index declined. The yen surged overnight after the Bank of Japan signalled readiness to ramp up stimulus. The major was trading 0.05 percent up at 104.78, having hit a low of 104.54 on Thursday, its lowest since July 31. Investors’ will continue to track the broad-based market sentiment, ahead of Michigan consumer sentiment index. Immediate resistance is located at 105.12, a break above targets 105.29. On the downside, support is seen at 104.35, a break below could take it near at 104.09.
GBP/USD: Sterling held firm below the 1.3000 handle after the Bank of England said it was considering negative interest rates amid rising COVID-19 cases, higher unemployment and a possible new Brexit shock. On Thursday, the BoE kept its main stimulus programmes on hold, as expected, and said that Britain’s economy had performed better than expected. The major traded flat at 1.2968, having hit a high of 1.3007 on Wednesday, it’s highest since September 10. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3035, a break above could take it near 1.3064. On the downside, support is seen at 1.2893 (5-DMA), a break below targets 1.2860. Against the euro, the pound was trading 0.1 percent down at 91.39 pence, having hit a high of 90.82 on Thursday, it’s highest since September 10.
AUD/USD: The Australian dollar advanced, extending gains for the sixth straight session, as the greenback weakened on overnight data showing recovery in the U.S. labour market stalling. Moreover, recent data indicating Chinese economy is recovering from the COVID-19 pandemic supported the bid tone around the major. The Aussie trades 0.05 percent up at 0.7313, having hit a high of 0.7345 on Wednesday, it’s highest since September 2. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7345, a break above could take it near 0.7370. On the downside, support is seen at 0.7279 (10-DMA), a break below targets 0.7258.
NZD/USD: The New Zealand rallied to an over 1-year high amid growing expectations the Reserve Bank of New Zealand will keep rates steady on 23 September ahead of the NZ election (October 17). New Zealand's Finance Minister Grant Robertson reiterated that the central bank is committing to keep the cash rate at 0.25 percent until March 2021. Although there is a chance the RBNZ might indicate a move lower for the OCR earlier (February). The Kiwi traded 0.9 percent higher at 0.6793, having touched a high of 0.6794 earlier, its highest level since April 2019. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6820, a break above could take it near 0.6847. On the downside, support is seen at 0.6712 (5-DMA), a break below could drag it below 0.6692 (10-DMA).
Equities Recap
Asian shares nudged higher, but struggled to extend gains as worries about a faltering economic recovery kept investors to the sidelines.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.2 percent.
Tokyo's Nikkei rallied 0.2 percent to 23,360.30 points, Australia's S&P/ASX 200 index dropped 0.3 percent to 5,864.50 points. South Korea's KOSPI gained 0.3 percent to 2,412.27 points.
Shanghai composite index surged 1.9 percent to 3,334.50 points, while CSI 300 index traded 2.1 percent up at 4,731.44 points.
Hong Kong’s Hang Seng traded 0.6 percent higher at 24,472.17 points. Taiwan shares added 0.02 percent to 12,875.62 points.
Commodities Recap
Crude oil price surged, extending gains for the fourth straight session, as OPEC+’s key panel on Thursday pressed for better compliance with oil output cuts against the backdrop of falling crude prices. International benchmark Brent crude was trading 0.6 percent up at $43.52 per barrel by 0543 GMT, having hit a high of $43.64 earlier, its highest since September 4. U.S. West Texas Intermediate was trading 0.6 percent higher at $42.20 a barrel, after rising as high as $41.28 earlier, its highest since September 4.
Gold prices rose, reversing some of its previous session losses as downbeat U.S. jobs data cast a shadow over the economic outlook, and major central banks pledged to roll out further stimulus if required to revive their coronavirus-battered economies. Spot gold climbed 0.5 percent to $1,953.88 per ounce by 0545 GMT, having hit a high of $1973.78 on Wednesday, its highest since September 2. U.S. gold futures were 0.5 percent higher at $1,959.
Treasuries Recap
The U.S. Treasury yields declined, with the benchmark 10-year note yield trading at 0.687 percent.
