Market Roundup
- Oil eases as U.S. dollar firms on bets of split White House, Senate
- Gold firms as Biden edges closer to U.S. election win
Economic Data Ahead
- (0500 ET/1000 GMT) EZ Retail Sales (YoY)(Sep)
- (0500 ET/1000 GMT) EZ Retail Sales (MoM)(Sep)
Key Events Ahead
- (0200 ET/0700 GMT) BoE Interest Rate Decision
FX Beat
DXY: The dollar index steadied as investors were cautiously optimistic Democrat Joe Biden would edge past President Donald Trump in a tight race to the White House. However, chances of a policy deadlock in Washington amid a divided Congress raised concerns. The greenback against a basket of currencies traded 0.05 percent up at 93.40, having touched a high of 94.30 on Wednesday, its highest since September 28.
EUR/USD: The euro surged, extending previous session gains after data released yesterday showed Eurozone producer prices edged higher month-on-month in September, as expected, boosted by an increase in energy costs, but they were still lower than a year earlier. The European currency traded 0.2 percent higher at 1.1739, having touched a low of 1.1602 on Wednesday, its lowest since July 24. Investors’ attention will remain on a series of economic data from the Eurozone economies, German factory orders, EZ retail sales, European Commission's Economic Growth Forecasts, and ECB's De Guindos speech, ahead of the U.S. unemployment benefit claims, Fed Interest Rate Decision and FOMC Press Conference. Immediate resistance is located at 1.1771, a break above targets 1.1797. On the downside, support is seen at 1.1691, a break below could drag it below 1.1678 (5-DMA).
USD/JPY: The dollar declined after rising to a 2-week peak in the prior session, amid heightened uncertainty over the outcome of the U.S. election, as investors braced for a potentially drawn-out vote-counting process. Republicans look likely to retain control of the Senate, increasing chances of a policy deadlock in Washington. The major was trading 0.2 percent down at 104.31, having hit a high of 105.34 on Wednesday, its highest since October 21. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims, Fed Interest Rate Decision and FOMC Press Conference. Immediate resistance is located at 104.74, a break above targets 104.94. On the downside, support is seen at 104.02, a break below could take it near at 103.85
GBP/USD: Sterling slumped, as the greenback surged as investors waited for the outcome of the U.S. presidential election. The major traded 0.1 percent lower at 1.2967, having hit a high of 1.3140 on Wednesday, it’s highest since October 22. Investors’ attention will remain on the geopolitical developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3025, a break above could take it near 1.3078. On the downside, support is seen at 1.2905, a break below targets 1.2861. Against the euro, the pound was trading 0.3 percent down at 90.52 pence, having hit a high of 89.45 the day before, it’s highest since September 7.
AUD/USD: The Australian dollar eased as the U.S. election still remains very tight in key swing states. Democrat Joe Biden has managed to edge closer to the White House, prompting President Donald Trump to open a multi-pronged attack on vote counts in several states by pursuing lawsuits and a recount. The Aussie trades 0.1 percent down at 0.7166, having hit a high of 0.7222 on Wednesday, it’s highest since October 12. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.7234, a break above could take it near 0.7265. On the downside, support is seen at 0.7118, a break below targets 0.7104.
NZD/USD: The New Zealand dollar rallied, as Prime Minister Jacinda Ardern’s comments favored help for the domestic businesses. However, the upside in the major appears limited as the preliminary readings of the ANZ Business Confidence and Activity Outlook for November showed the former slipped below -15.5 forecast to -15.6, while the later ones’ eased from 4.7 percent prior to 4.6 percent. The Kiwi traded 0.1 percent higher at 0.6696, having touched a high of 0.6743 on Wednesday, its highest level since September 21. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6719, a break above could take it near 0.6742. On the downside, support is seen at 0.6660 (10-DMA), a break below could drag it below 0.6545 (5-DMA).
Equities Recap
Asian shares rallied as investors wagered the prospect of U.S. policy gridlock would greatly favour some industries.
MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 1.7 percent.
Tokyo's Nikkei surged 1.7 percent to 24,091.06 points, Australia's S&P/ASX 200 index rallied 1.3 percent to 6,139.60 points. South Korea's KOSPI gained 2.1 percent to 2,406.79 points.
Shanghai composite index rose 1.2 percent to 3,317.27 points, while CSI 300 index traded 1.3 percent up at 4,878.05 points.
Hong Kong’s Hang Seng traded 2.7 percent higher at 25,547.10 points. Taiwan shares added 0.4 percent to 12,918.80 points.
Commodities Recap
Crude oil prices declined as the dollar strengthened on growing expectations Democrat Joe Biden would win the U.S. presidential election but the Republicans would retain Senate control, holding back any huge COVID-19 relief package. International benchmark Brent crude was trading 1.9 percent down at $40.39 per barrel by 0516 GMT, having hit a high of $41.31 on Wednesday, its highest since October 27. U.S. West Texas Intermediate was trading 1.9 percent lower at $38.35 a barrel, after rising as high as $39.23 on Wednesday, its highest since October 27.
Gold prices surged as investors were cautiously optimistic Democrat Joe Biden would edge past President Donald Trump in a tight race to the White House, boosting hopes of more economic stimulus. Spot gold rose 0.2 percent to $1,907.35 per ounce by 0522 GMT, having hit a high of $1916.48 on Thursday, its highest since October 22. U.S. gold futures rose 0.7 percent to $1,909.00 per ounce.
Treasuries Recap
The U.S. Treasury yields plunged, with the benchmark 10-year note yield trading at 0.736 percent and the 30-year yield at 1.503 percent.
